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Every EB-5 investor’s situation is unique. If you could choose between an EB-5 project that fit your specific case and a one-size-fits-all option, which would you choose?

You would choose the project that fits your situation.

For a long time, the EB-5 market has been dominated by one-size-fits-all projects. That has begun to change, and EB5AN believes that every investor should have a range of options.

If you are considering an EB-5 investment, we want to help you find a project that fits your individual investment goals. You deserve more than a one-size-fits-all approach that fails to treat you as unique.

Generally, EB-5 investors are interested in two primary goals:
1. living and working in the United States
2. getting their invested money back in a reasonable, predictable timeframe

Beyond these two core objectives, EB-5 investors have a variety of investment goals. Some EB-5 investors are interested in living and working in the United States as quickly as possible. Others may be more interested in a strong rate of return.

With the recent changes to the EB-5 program brought about by the EB-5 Reform and Integrity Act of 2022 (RIA), a larger variety of EB-5 investment features is possible. Now, you can and should consider what you want out of an EB-5 investment and look for the project that best fits your goals. If you take the time to do this, you are far more likely to achieve a positive outcome.

In this article, we start by providing some context for the EB-5 program and the RIA. We then describe the key changes that the RIA made to the EB-5 program and the implications of these changes. Next, we provide a framework for making strategic EB-5 investment decisions. Finally, we apply this framework to EB5AN’s current projects and offer example cases.

How EB-5 Investment Worked Before the RIA

The RIA was passed in March 2022. Prior to that, one type of project dominated the market: mezzanine debt for large real estate developments. These projects were typically in urban targeted employment areas (TEAs) that had high rates of unemployment.

Good projects were fully capitalized and had significant job creation. The best projects were being developed by companies with extensive track records of completing projects and repaying debts.

At that time, while many bad options were available, the good EB-5 investment choices were all very similar. The most attractive EB-5 projects were large real estate developments in urban TEAs being built by major developers.

But the calculation changed when Congress passed the RIA.

Key Changes to the EB-5 Program through the RIA

The RIA made a number of changes to the EB-5 program. The changes that had the greatest impact on investment choice are as follows:

Reserved Visa Categories

The RIA created new EB-5 visa categories that are distinct from the standard EB-5 visa category. These set-aside EB-5 visas are for certain types of investments. The largest reserved category makes up 20% of all EB-5 visas and is reserved for investments in rural TEA projects. The next category makes up 10% of all EB-5 visas and is reserved for investments in high unemployment urban TEA projects. Finally, investments in certain infrastructure projects qualify for the smallest EB-5 visa category, which makes up 2% of all EB-5 visas.

These reserved visas are particularly important for investors from countries with historically high demand for EB-5 visas. When demand for EB-5 visas in a particular country is greater than the number of available visas, EB-5 investors from that country face a visa backlog, also known as retrogression. When a country has this type of backlog, EB-5 investors from that country face significant delays. But no country currently has a backlog in any of the reserved EB-5 visa categories.

Right now, on the other hand, EB-5 investors from China and India who invested prior to the RIA face long delays due to visa backlogs. By investing in a post-RIA set-aside visa category—rural or urban TEA or infrastructure projects—investors can avoid these backlogs.

Concurrent Adjustment of Status

Some EB-5 investors are already in the United States on another valid visa. The RIA allows such investors to concurrently file Form I-485 applications to adjust their immigration status alongside their Form I-526E immigrant petitions. By adjusting their status concurrently with their immigrant petitions, EB-5 investors can remain in the United States as immigrant investors while waiting for USCIS to approve their Form I-526E applications.

These EB-5 investors can also apply for employment authorization documents (EAD) and travel permits. USCIS has recently approved EAD and travel permits in as little as 60 days for EB-5 investors who concurrently file.

Rural TEA Priority Processing

In most cases, USCIS takes several years to process an EB-5 investor’s Form I-526E. But EB-5 investors in rural TEA projects are given priority processing for these applications. This means that USCIS will give preference to these investors and process their immigrant applications ahead of those from other investors. With priority processing, EB-5 investors may receive approved I-526E applications in less than a year.

Policy Clarification of the Two-Year Investment Period

The RIA states that an EB-5 investment must remain invested for at least two years. USCIS recently released a policy update that interprets this period as beginning when an investor’s EB-5 funds have been invested in the job-creating entity. This means that an investor can, in most cases, be repaid much sooner than before while remaining eligible for a permanent Green Card.

How to Find an EB-5 Project That Fits Your Individual Case

Due to how the RIA has changed the EB-5 program, investors now have many factors to consider when choosing an EB-5 project. With reserved visas, concurrent filing, priority processing, and potentially shorter investment durations, the project selection process involves more nuance.

Project Location: Urban versus Rural TEAs

One of the first considerations for choosing an EB-5 project is whether the project is in an urban or rural TEA. The main concern here is whether or not the investor is already in the United States. If an investor is already in the United States on a different visa and can concurrently file, either an urban or a rural TEA project would be a fine choice.

But for investors living outside the United States, rural TEA projects are often the better choice. Rural TEA projects offer EB-5 investors priority processing of Form I-526E, meaning they can be approved for Green Cards more quickly. This makes rural TEA investments the fastest way for EB-5 investors living outside the United States to immigrate.

For EB-5 investors from a country with a visa backlog, a rural project may be the best choice. While all TEA projects qualify investors for reserved visas, rural EB-5 projects are likely to remain current the longest. Recently published USCIS data revealed that urban TEA projects attracted more EB-5 investment in the first 12 months of the RIA than rural TEA projects. But urban TEAs have only half the amount of reserved visas. This consideration is particularly important for EB-5 investors from China and India, where EB-5 visa availability is subject to retrogression.

Project Structure: Loan versus Equity

One of the next factors to consider when choosing an EB-5 project is whether the project is structured as a loan or as equity. This structure will impact two key project factors: financial return and financial security.

Both loan and equity projects can offer EB-5 investors low risk and high quality. But these structures have different features, which are outlined below:

EB-5 Loans

EB-5 loan projects are those that lend EB-5 funds to a borrower. EB-5 loans tend to have more predictable repayment timelines. The loan has a specified term, meaning it matures by a certain date. Even if the loan can be extended, such extensions are typically limited to one or two years.

Also, good EB-5 loan projects tend to have additional safety features, like mortgages or third-party repayment guaranties. These features can provide a higher degree of financial safety to EB-5 investors since the EB-5 loan is secured by some kind of collateral. If the borrower fails to repay the loan, the EB-5 lender can enforce their rights, which helps ensure EB-5 investors get repaid.

But just because an EB-5 project has some kind of loan security does not necessarily mean it is lower risk. If a project has a mortgage but the value of the property is less than the loan principal, the mortgage does not increase the project’s safety. In the same way, if a project has a loan repayment guaranty but the company providing the guaranty does not have the finances to repay the loan, the guaranty does not increase the project’s safety.

The best EB-5 loan offerings, however, will have mortgages or repayment guaranties. These projects will be happy to show EB-5 investors the strength of their loan security through financial documents.

With loan offerings, EB-5 investors tend to earn a lower annual return rate. For some EB-5 investors, the amount they earn on their investment is less important. What they want is a more predictable repayment timeline and additional financial security. For those who want higher returns, EB-5 equity may be the better option.

EB-5 Equity

EB-5 equity investments tend to offer EB-5 investors stronger rates of return. In some cases, this higher return rate can result in significant earnings over the investment period.

While the best EB-5 equity projects are low risk, the timing of repayment is more flexible. Unlike an EB-5 loan, the length of an equity investment is not tied to a maturity date. Equity is repaid when the developer sells or refinances the project. Experienced developers can offer estimates of when EB-5 investors can be repaid, but these estimates are subject to change based on project performance.

A developer’s track record is key. If a project’s developer does not have a record of completing many projects and successfully repaying all of its investors, the risk to EB-5 investors is high.

Project Duration: Short versus Standard

With the new USCIS policy allowing for a shorter investment period, EB-5 investors also have more choice when it comes to project duration. Historically, the length of EB-5 investments has been five or more years, but shorter durations of three to four years are now possible.

Shorter duration projects may be structured as a loan or as equity, but they are more likely to be in urban than rural TEAs.

It is important, however, to note that the USCIS policy that allows for shorter investment periods is new and subject to change. USCIS can change the policy at will, or it could be challenged in court or changed by Congress. Investments structured around this policy should include mechanisms that allow it to adapt to any future changes or refinements.

All other facts being the same, a shorter duration investment is better than a longer one. Shorter investment periods mean the money is at risk for less time. And a shorter length investment means having that money back to use for other purposes more quickly. But EB-5 investors should carefully weigh the value of a shorter project and its other benefits against a standard-length project and its benefits.

EB5AN’s Approach: Best-in-Class Projects to Fit Every Investor

EB5AN has worked to provide EB-5 investors with a range of high-quality, low-risk projects with diverse profiles. We offer both urban and rural TEA projects structured as loans and equity with standard and shorter durations. We recognize that every EB-5 investor is different, and features that appeal to one investor may not be as important to another.

We strive for transparency. We want investors to have all the information needed to make an informed choice. We want to help each EB-5 investor understand the pros and cons of each type of project and then choose the project that fits his or her financial and immigration goals.

Whether you are a Chinese businessman living in China, an Indian national in the United States on an H-1B visa, or a Canadian student on an F-1 visa, EB5AN has a project that will fit your goals. Below, we provide brief descriptions of our projects and example investment scenarios.

Rural Projects for EB-5 Investors Outside of the United States

EB5AN is currently offering three best-in-class rural EB-5 projects: Wohali Utah (Loan), Kindred Resort at Keystone (Loan), and Twin Lakes Georgia (Loan).

Fictional Example:

Mr. Zhang, a Chinese businessman, wants to move his family to the United States. The fastest way to get an EB-5 visa is to invest in a rural TEA project. He begins looking into projects and finds the Kindred Resort at Keystone, a rural TEA project. This project has low immigration risk since all EB-5 jobs have already been created. Financial risk is also low since it features a 100% equity pledge, future mortgage, and strong existing sales. Zhang likes this project because it is a luxury ski resort hotel and condominium, and he has always loved skiing. He makes his investment, and in 11 months he is approved for Green Cards for himself and his family.

Urban Projects for EB-5 Investors in the United States

EB5AN is currently offering two top-tier urban EB-5 projects that feature shorter investment durations: Boynton Beach (Equity) and Boynton Beach (Loan).

Fictional Example:

Ms. Patel from India is currently living and working in the United States on an H-1B visa. She wants to adjust her status and concurrently apply for work authorization and a travel permit. Ms. Patel has worked hard and is ready to make an EB-5 investment, but she wants to make sure her hard-earned money is as safe as possible and returned to her soon. Boynton Beach (Loan) appeals to her since it features an EB-5 loan repayment guaranty from a financially strong guarantor. The loan term is about four years, which means she will have her money much sooner than with other EB-5 loan projects. Ms. Patel invests her $800,000 and files her immigrant petition and her adjustment of status application. Six months later, she has work authorization and her travel permit.

Equity for EB-5 Investors Seeking Maximum Returns

EB5AN is currently offering one higher-yield equity project: Boynton Beach (Equity).

Fictional Example:

Mr. Horton is a Canadian in the United States on a student visa but is about to graduate. He wants to remain in the United States and would like to start his own business some day. He believes an EB-5 investment is his best choice for immigrating, but he wants to earn strong returns on his investment to help him start a business. After some investigation, Mr. Horton finds the Boynton Beach (Equity) project, which offers a 5.0% annual return and expected repayment after 3.75 years. He figures he could earn more than $100,000 in returns by the time he is repaid, giving him the money he needs to start his business while also helping him attain his Green Card.

Contact ALCA INTERNATIONAL for More Information

We believe every investor should be treated as an individual, and our record speaks for itself. While the above examples are illustrative, EB5AN has helped hundreds of real investors find projects that fit their individual goals. We would be honored to help you find the right project for your unique situation.

For more information on our EB-5 projects, schedule a one-on-one call today. We would be happy to help you find the project that best fits your financial and immigration goals.

Basics of EB-5 Investment Risk

The EB-5 program requires investment funds to be “at risk” for an investor to qualify for a Green Card. This means that EB-5 investors must face the financial risk of losing their investment.

No Project Is Risk Free

No EB-5 project will be 100% free of financial and immigration risk. The level of risk, however, can vary among EB-5 projects. Even if a project meets all EB-5 program requirements, it may be high risk. In fact, many EB-5 projects carry levels of risk far above that required to satisfy the at-risk requirement of the EB-5 program.

Hundreds of project sponsors and EB-5 regional centers offer projects to investors. Most of these projects meet the EB-5 program’s Green Card requirements as long as they follow their business plan. Project success, however, depends on a wide array of factors, including the project’s structure, the construction timeline, and the developer’s track record.

It’s important to note that USCIS, the U.S. government agency that oversees the EB-5 program, focuses on the at-risk and job creation requirements of the program. USCIS is not concerned about whether or when an EB-5 investor will receive his or her invested capital back.

As a result, EB-5 investors should take time to review multiple EB-5 projects. Since each project’s risks will be different, evaluating several projects helps an investor identify the project that is most likely to result in successful immigration and a return of his or her investment.

A recent Government Accountability Office report noted that less than 1% of EB-5 investments were lost due to fraud. This is a small number. The key word, however, is “fraud.”

The actual percentage of EB-5 investors who lose funds is much higher than 1%.

Not many EB-5 investors lose money due to fraud or illicit activity by a “bad actor.” Instead, they invest in high-risk EB-5 projects, often unknowingly. Then the project does not perform well and faces financial issues.

Often when a project is a financial failure, it also fails to create enough jobs for EB-5 investors to meet the EB-5 program’s job creation requirement. In this way, financial risk is tied directly to immigration risk for EB-5 investors.

Why Do Risky Projects Attract Investors?

Why would an EB-5 investor choose a project with more risk? Usually, these investors either do not know when the risk of a project is higher than what is required by the EB-5 program or they do not carefully compare different projects before investing.

To participate in the EB-5 program, investors must be foreign nationals born outside of the United States. Some EB-5 investors may already be in the United States on other visa types such as H-1B, F-1, E-2, etc. Most, however, are living outside the United States when they invest.

Many EB-5 investors have little experience with the United States. Even fewer understand U.S. real estate development projects or U.S. securities laws.

Additionally, while EB-5 investors hire immigration attorneys, these attorneys check whether a project meets EB-5 requirements. They do not generally provide advice on the financial feasibility or the investment risks of a project.

Many EB-5 investors invest large sums of money in a country and industry they don’t know well, and they have to deal with complex U.S. securities laws they are not familiar with. Most EB-5 investors simply are not equipped to make good EB-5 investment decisions. As a result, many development projects that are unable to obtain financing from public or private markets in the United States successfully raise EB-5 financing.

ALCA INTERNATIONAL’s Approach to Protecting EB-5 Investors

Our EB-5 investors have benefited from our conservative and transparent approach to EB-5 investment. Now, ten years later, we have built one of the largest EB-5 regional center platforms, with over 10 regional centers serving more than 30 states and U.S. territories.

Every regional center EB-5 project for which we act as a fiduciary for EB-5 funds has been successful.

• Each of these projects is either completed or on track.
• All EB-5 capital is either repaid or in good standing.
• All EB-5 job creation requirements are either met or on track.

We are one of the few—if not the only—large-scale regional center operators that have not lost any regional center investment funds, had USCIS project denials, faced bankruptcy, defaulted on a loan, been fined by the SEC, or been sued by EB-5 investors.

One of the reasons our approach has been successful is that it addresses the main concerns of EB-5 investors. The number one question I hear from EB-5 investors is, “How do I keep my investment safe and make sure my family gets Green Cards?” The answer is that investors need to become familiar with U.S. securities laws and real estate development investment. This may sound daunting, which is why we have created this resource—to help make this essential task easier.

In the following section, we will briefly cover U.S. securities laws as they relate to EB-5 investments. Understanding these laws is vital to understanding the risks that come with EB-5 investment, how these risks are disclosed, and how to avoid unnecessary risks.

Basics of U.S. Securities Laws

EB-5 Investments Have Lower Compliance and Regulatory Standards

U.S. securities laws were made to protect American investors. One goal of these laws is to ensure that investors are not exposed to high-risk investments. These laws are more relaxed for accredited investors who meet certain income and net worth requirements.

EB-5 investors are foreign nationals, not U.S. citizens. And almost all EB-5 projects require EB-5 investors to be accredited investors. Because EB-5 investors are accredited foreign investors, EB-5 projects are subject to less stringent standards.

Risks Can Be Extreme as Long as They Are Disclosed

EB-5 investments are mostly structured as private offerings. This means they are not marketed to the general public and do not need to register under U.S. securities laws. Private offerings are required only to accurately disclose to potential investors the key risks of the investment. This means that an EB-5 project can have an unlimited amount of risk as long as all the risks are disclosed in writing.

As mentioned earlier, EB-5 investor funds must be at risk of loss. That risk, however, does not need to be high to qualify an EB-5 investor under the program.

This point is crucial. Consider two real-life EB-5 projects available in the market today:

1. Home Project EB-5 Loan

This project is building single-family homes in a growing area. Construction activities have been ongoing for several years.

This project has been approved by two senior lenders for construction loans. It has already created more than one thousand EB-5 jobs. More than $200 million has already been spent on project development costs, and over 500 homes have already been sold. The project is already profitable.

EB-5 funds are being loaned to the developer. This loan is secured by a parent company guaranty from a diversified parent holding company with hundreds of millions of dollars in assets. Additionally, the developer has repaid billions of dollars in debt and has never failed to repay any loan. In more than 25 years of operation, the developer has never failed to complete a project.

2. Rental Project EB-5 Loan

This project plans to buy land to develop a hotel and apartment complex. The project does not have a funded senior loan in place and has not started construction. As a result, few, if any, EB-5-eligible jobs have been created.

The success of this project is tied to future rent payments. Rental rates are projected two to three years into the future, and those rates may not be feasible when units finally become available to rent.

The developer has no track record of repaying an EB-5 loan, which is not secured with any collateral. To repay the EB-5 loan, the developer will have to successfully refinance its construction loan. At that time, financing may not be available at an affordable interest rate or at all.

Also, all the parties involved in the transaction are related, which creates conflicts of interest that add risk to the investment.

Both projects meet the at-risk requirement of the EB-5 program. However, the rental project is far riskier. That project may eventually succeed, but the home project is showing success right now. The rental project offers no protection for investors, while the home project’s loan has a repayment guaranty. The rental project’s developer has no track record. The home project’s developer has a long record of success.

Checking Offering Documents for Risks Is Essential

Selecting a low-risk EB-5 project can be difficult. How can you know whether a project is high risk like the rental project from the example above?

To learn key project details, like the status of construction and what financing is currently in place, you will need to ask a lot of questions. Ultimately, the information you need to know should be found in the offering’s documents.

In many cases, what is missing in the offering documents is even more important than what is in them. Having a list of questions before you begin to review a project’s offering materials is critically important. With such a list, you can see what issues are not addressed in the offering documents that you need to ask the project’s sponsors about.

An EB-5 project salesperson will be quick to tell you every positive detail about a project. They may tell you verbally that a project has a senior loan in place and that the developer is financially strong.

Under U.S. securities laws, only the project details and disclosures written in the project’s offering documents really matter. If you are told something about a project but it is not written in the offering documents or provided to you in writing by the EB-5 project sponsor, then you should consider it unverified and untrue. When making investment decisions, do not rely on any information you receive that is not in writing.

Before making a decision, carefully review the full set of offering documents. Set aside time to read every disclosure. Even if you are not an investment expert, this will be time well spent.

Following are three example situations that we often see.

Example 1: Senior Loan Risk

A salesperson for an EB-5 project might tell you that a project has secured a senior loan. The offering documents, however, may reveal that one of the project’s risks is actually obtaining this loan.

The offering documents might say something like the following:

“Development Risk: The project has not yet obtained a commitment from a senior lender, and without such commitment, the project may not have sufficient funds to be successfully completed.”

In simple terms, this means the project does not have a senior loan yet. If the project fails to secure this loan, it likely will not be built. As a result, EB-5 investors in the project may not qualify for their permanent Green Cards because the project will not create enough jobs. EB-5 investors may also lose part or all of their investments.

Until recently, the United States has been in a low interest rate environment. Real estate developers have had easy access to bank loans. As interest rates go up and credit markets tighten, even experienced developers are struggling to secure construction loans. Refinancing loans after construction is complete has also become more challenging and more expensive. As a result, the risk profile of EB-5 deals has changed. The types of EB-5 projects that are most likely to achieve EB-5 investor goals has also changed.

If an EB-5 salesperson claims that the loan for a project has been signed and funded by a bank but will not show you a copy of the loan agreement and bank statements, beware. This is a big red flag.

The salesperson may say, “Sorry, we cannot share that with you.” This kind of response suggests that they are likely hiding something. The loan agreement and bank statements are key documents for investors and can be provided. These documents allow potential investors to evaluate the investment’s feasibility and credibility. You should be able to look at these documents before making a decision to invest or not.

Example 2: Repayment Risk

A project’s offering documents might state that the entity promising to repay EB-5 funds may not be able to do so under certain circumstances.

The disclosure in the offering documents will look something like the following:

“Exit Strategy: Successful repayment of the EB-5 loan is solely dependent on future cash flow from hotel and apartment operations and/or a successful liquidity event that yields sufficient net proceeds to repay the outstanding EB-5 loan balance. If the project is unable to realize sufficient cash flows or experience a liquidity event, EB-5 investors may face a loss of part or all of their investment capital.”

In simple terms, this means that the hotel or apartment project may not earn enough money once it is open. The project has to pay its operating costs, which include interest payments that will likely be higher than planned. In this scenario, the EB-5 loan is likely to go into default. If that happens, the EB-5 investors may lose part or all of their investment capital.

This risk is extremely common in hospitality or multifamily projects. These types of projects often do not have repayment guarantees from separate guarantor companies that are distinct from the project development company. You should be wary of such projects as they are much more financially risky.

Example 3: Developer Risk

A salesperson for an EB-5 project may tell you that the developer is financially strong. They might try to assure you that your investment funds are safe and you will surely be repaid. Knowing that you should not rely on unverified information, you ask to look at the financial statements of the project development company and any separate guarantor company.

The salesperson might decline to provide this information and provide all sorts of excuses for why it cannot be shared. Do not fall for this. These documents can be legally shared, and ALCA INTERNATIONAL makes them available to potential EB-5 investors. Without this information, you will not be able to gauge the financial strength of these companies. As a result, you will not be able to accurately assess the financial risk of investing in this project. You should avoid projects where the level of risk is completely unknown.

Alternatively, if the salesperson provides the financial statements you request, carefully review them. If they reveal that the project development company or guarantor is not as financially strong as suggested, you should avoid investing in this project.

EB-5 Investment Diligence Question List

Choosing an EB-5 project is a major investment decision. Finding the right project may seem daunting.

I developed the EB-5 investment diligence question list to help potential EB-5 investors like you filter out risky projects. You should be able to invest in a project with confidence that it will qualify you for a Green Card and that you will get your money back. This list of questions will help you do that.

This document provides a simple list of questions for you to send to a project’s sponsor. If answered candidly in writing by an EB-5 project with relevant supporting documents, the responses you receive will help you assess how much immigration and financial risk a project has.

But please don’t settle on the first project you look into. You won’t really know how risky a project is until you compare it with other projects. These questions will help you understand how EB-5 investments work and will allow you to compare projects to find the lowest risk option.

Keep in mind that some EB-5 project sponsors might be hesitant to answer all of the questions fully. This in itself can be a red flag. Honest, detailed responses in writing suggest that a project has nothing to hide.

The EB-5 investment diligence question list provides a good starting framework to help you understand which characteristics of an EB-5 project are important. But the list of questions is useless if you don’t know how to interpret the answers you receive. Take your time as you look through this section. Bookmark this page and come back to it as you examine different projects.

Under each category below you will find a series of questions and then some potential responses. The “best answer” means low risk in that category, while the “worst answer” means high risk. The answers you receive from a project will likely fall somewhere in between “best” and “worst.”

Questions about the Project Developer:

How many similar real estate development projects does the developer have experience completing, and over what time frame?

Has the developer ever failed to complete a project, including EB-5 projects?

How much financing has the developer obtained and from what sources? Has the developer ever failed to repay similar financing on prior projects?

How many of the developer’s EB-5 projects has USCIS approved?

How many of the developer’s prior real estate development projects have used EB-5 financing, and over what time frame? Were they successful at creating enough jobs for all EB-5 investors?

Questions about the EB-5 Investment:

Is the EB-5 projected located in a Targeted Employment Area (TEA)? If yes, is it in a rural or high-unemployment TEA?

What escrow policies are in place to protect EB-5 investors?

What is the duration of the EB-5 investment loan?

How will the EB-5 loan be repaid, and is repayment directly secured by collateral and/or a repayment guaranty from a well-capitalized and diversified guarantor company?

Questions about Project Feasibility:

What is the project’s current construction status, including any permits or approvals obtained?

Does the project target a financially strong demographic with high demand for the project’s asset class?

When is the project expected to be profitable?

How many EB-5 jobs have been created and how many must be created for all EB-5 investors to meet the EB-5 job creation requirement?

Can you provide financial statements for the project development company and any guarantor entity?

Is the project a new concept or in an area without direct comparables?

Questions about Project Financing:

Has the project secured senior financing, and is it already using a loan facility from an institutional lender, such as a national bank?

Can you provide a copy of the executed senior loan agreement?

Questions about Conflicts of Interest:

Are the developer and the EB-5 investment fund or “new commercial enterprise” controlled by the same person(s)? Does the EB-5 project development company qualify as an “affiliated job-creating entity”?

Are the regional center and the developer or project development company controlled by the same person(s)?

Maximize Your Immigration and Financial Safety with ALCA INTERNATIONAL

As an EB-5 investor, you should be careful when choosing a project to invest in. Every project has financial and immigration risks, but some projects are much riskier than others. I hope that with the context provided by this article and the downloadable question list, you will find a low-risk project that is right for you.

I would encourage you to look for projects being developed by experienced developers. They should be transparent and provide you with answers to all of your questions. They should have strong financials and proven economic feasibility. Their success should not depend solely on future projected revenue.

By using the information in this article and carefully looking at more than one project, you can invest with greater confidence. You can’t remove all risks, but you can take simple steps to improve your chances of successfully immigrating and getting your money back.

We’ve conducted numerous webinars with experts from across the EB-5 industry to give investors like you all the information you need to make informed choices.

At ALCA INTERNATIONAL, we structure EB-5 investment projects to meet our strict immigration and financial risk criteria. Our team consists of highly experienced real estate and finance professionals. We know how to carefully diligence real estate development projects to eliminate unnecessary risk. Our focus is on finding the highest quality EB-5 investments to help our EB-5 investors get their Green Cards and a timely return on their money.

For more information on how we can help you successfully get a Green Card through EB-5 investment, schedule a free consultation.

Investing in a rural EB-5 project is one of the fastest ways to get U.S. Green Cards for yourself and your family. Under the EB-5 program, investors who choose EB-5 projects in rural targeted employment areas (TEAs) gain exclusive benefits. These benefits include a reduced minimum investment amount and a faster immigration process.

By investing $800,000 in a rural EB-5 project, you could obtain work and travel authorization in just days. Your initial rural EB5 Green Card could be approved in a matter of months. For those facing roadblocks to U.S. immigration, such as Indian and Chinese nationals, the benefits of making a rural EB-5 capital investment are especially significant.

We invite you to consider how a high-quality, low-risk EB5 rural investment offers a faster, safer path for you and your family to live, work, and study in the United States.

What Is a Rural EB-5 Investment?

A rural EB-5 investment is a qualifying capital investment in a project that is in a rural TEA as defined by the EB-5 program. Rural TEAs are one of two types of TEAs. The other type is a high-unemployment, or urban, TEA. These two TEA categories were created to encourage EB-5 investment in U.S. locations that have a significant need for projects to stimulate economic growth.

EB-5 Rural TEA Requirements

EB-5 rural TEAs are based on population. An area must meet the following criteria to qualify as a rural TEA:

• Be located outside a metropolitan statistical area (MSA) as defined by the U.S. Office of Management and Budget (OMB).
• Not be located on “the outer boundary of any city or town having a population of 20,000 or more.”
• Have a population of no more than 20,000 according to the most recent decennial census.

EB5 Rural vs. Urban TEAs

While EB5 rural areas are based on population, urban TEA status depends on the national average unemployment rate. Investments in urban TEAs can help improve the labor force employment measure.

A location qualifies as an urban TEA if it meets the following criteria:

• Be located within an MSA as defined by the OMB.
• Have an unemployment rate that is at least 150% of the national unemployment average.

Beyond differences in how EB-5 rural versus urban TEA status is decided, these two types of TEA offer different benefits. Urban TEA projects tend to benefit from their location in major population centers. But rural projects offer EB-5 investors added benefits that are not available through urban TEA projects. Specifically, applications for investors in rural projects are processed more quickly. And each year, more rural EB-5 visas are available than urban EB-5 visas.

The rural EB5 investor benefits are described in more detail below.

Key Rural EB-5 Benefits

Foreign investors who choose EB-5 projects in rural TEAs qualify for the reduced EB-5 investment amount of $800,000 as well as other EB5 rural immigration benefits.

Lower Investment Amount

By investing in a rural targeted employment area project, you qualify for the EB5 rural minimum investment amount of $800,000. The standard minimum investment amount is $1,050,000.

Priority Rural Petition Processing

While the application process for rural EB-5 investors is the same as for urban investors, the way the application is handled is different. By investing in a rural EB-5 project, you qualify for priority processing of your Form I-526E, which is the initial immigrant application. Your Form I-526E may be adjudicated in a matter of months, not years. This means you could get your U.S. Green Cards months or years faster than otherwise.

We often see a faster rural EB-5 processing time for Form I-526E petitions. Many immigrant investors in rural EB-5 projects have received Form I-526E approval within 12 months—and sometimes significantly less time than that. An investor in ALCA INTERNATIONAL’s Twin Lakes project, for example, received Form I-526E approval in about 9.5 months.

After you and your family receive your initial U.S. Green Cards, you will be able to live, work, and study in the United States. You will have the freedom to travel within the country or internationally.

Rural Set-Aside Visa Category

Under the EB-5 Reform and Integrity Act of 2022 (RIA), new categories of EB-5 visas were created for investments in TEAs. The EB5 rural visa category makes up 20% of all EB-5 visas, while the EB-5 urban visa category makes up only 10% of all EB-5 visas. Unlike the standard EB-5 visa, these set-aside visas are current and not subject to any backlogs.

For investors from countries with EB-5 visa backlogs, set-aside EB-5 visas help them avoid long delays. Eventually, these set-aside visa categories could face backlogs, too. But with twice as many visas each year as the urban category, the EB-5 rural category is expected to stay current the longest.

As of June 2024, Chinese and Indian nationals face backlogs of pending visa applications for standard EB-5 visas. These backlogs mean that EB-5 investors from these countries often have to wait months or years longer to immigrate through the EB-5 program. With the set-aside EB-5 visa categories, however, no backlogs have been announced.

The urban set-aside category could become backlogged soon. China and India are likely to face backlogs first. Investors from these countries may face long delays before receiving their Green Cards unless they choose rural EB-5 projects.

For a more detailed explanation of why projects in EB-5 rural areas are the safest option for Chinese and Indian investors, please see ALCA INTERNATIONAL’s analysis of the set-aside categories.

(In addition to rural and urban TEAs, infrastructure projects also qualify for set-aside visas. However, there is still some confusion as to what kinds of developments can qualify as infrastructure projects. In addition, the infrastructure project category makes up only 2% of all EB-5 visas.)

Why Invest in EB-5 Rural Real Estate Through a Regional Center?

Most investors choose projects sponsored by EB-5 regional centers under the EB-5 Regional Center Program.

Regional centers are entities designated by United States Citizenship and Immigration Services (USCIS) to sponsor EB-5 projects. Regional centers manage the flow of EB-5 funds and ensure projects comply with all EB-5 program rules and USCIS requirements.

Regional center sponsorship benefits both EB-5 projects and investors.

For project developers, a benefit of regional center sponsorship is the ability to pool funds from multiple foreign investors. Under the EB-5 Reform and Integrity Act of 2022, pooling funds is allowed only for projects sponsored by regional centers. Since most rural real estate projects seek more than $800,000 in EB-5 funding, most are sponsored by regional centers.

For EB-5 investors, a key benefit of regional center sponsorship is that the project has more flexible job creation rules. Under the EB-5 program, each investor must create 10 qualifying jobs. Without a regional center, only jobs created directly by the project count. For regional center projects, though, indirect jobs from spending and revenue can be counted as well.

This method of calculating job creation makes regional center rural EB-5 projects safer for EB-5 investors. As a result, investing through a regional center can increase your chances of receiving timely USCIS approval and your U.S. Green Cards.

What Is a New Commercial Enterprise?

In regional center investments, the flow of EB-5 funds is overseen by an investment fund set up by the regional center. This investment fund is known as the new commercial enterprise.

First, an investor’s funds go into an escrow account set up by the new commercial enterprise.

The funds are then transferred from escrow into the operating account used by the new commercial enterprise. This step usually takes place once the investor receives an I-526E receipt notice from USCIS.

Finally, the funds move from the new commercial enterprise operating account to the EB-5 project (known as the job-creating entity).

The RIA has introduced strict reporting and accounting requirements for each new commercial enterprise in the EB-5 program. Each new commercial enterprise must issue regular reports to USCIS.

These measures ensure that each new commercial enterprise transfers the full investment amount to the job-creating entity.

ALCA INTERNATIONAL’s Rural EB-5 Projects: High-Quality, Low-Risk Rural EB-5 Investment Opportunities

ALCA INTERNATIONAL has sponsored over 15 successful projects under the EB-5 Regional Center Program. Our previous projects in the regional center program have a 100% USCIS project approval rate. All invested EB-5 funds are in good standing or have already been repaid.

Our EB5 rural projects offer the benefits listed above. Also, investors in these rural projects who are currently in the United States on other visas—including those from China and India—can apply for employment authorization documents (EADs) and advance parole (AP) travel documents concurrently with Form I-526E.

Following are some of our high-quality, low-risk rural EB5 investment opportunities.

Rural EB5 Projects 2024

Snake River Sporting Club EB-5 Rural Project (Loan)

RURAL EB-5 PROJECT NOW OPEN

Rural TEA Status
$800,000 Investment Required
Rural Set-Aside Visas
Priority Processing
Concurrent Filing for an EAD and AP

Project Information

Snake River Sporting Club is a master-planned luxury golf community development near Jackson, Wyoming. In addition to its award-winning golf course, this project features a host of other amenities, including a main lodge, 18 lodge cabins, 19 residential units, and four ranch estates. The project has already sold 10 of its 18 lodge cabins for an average sales price of ~$3.3 million

Immigration Safety

• Significant job creation is already in place, with 500+ jobs for EB-5 investors as of June 2024 and significantly more than 10 per investor upon project completion.
• The project is sponsored by an independent regional center with a 100% USCIS approval rate, including 10+ Form I-956F approvals.

Financial Safety

• 10 of 18 Lodge Cabins have been sold for an average of ~$3.3 million.
• A senior construction loan has been secured.
• The project has an exclusive partnership with Compass, the largest independent real estate brokerage in the United States.
• The EB-5 loan is secured by pledges of membership interests plus first and second mortgages.
• The project features a short four-year EB-5 loan term.
• The project offers a Form I-526E approval refund guaranty; investors’ funds can be returned if their petitions are denied.
• The project offers a construction completion guaranty; the developer will complete development of the project.

Twin Lakes Georgia EB-5 Rural Project (Loan)

RURAL EB-5 PROJECT NOW OPEN

Rural TEA Status
$800,000 Investment Required
Rural Set-Aside Visas
Priority Processing
Concurrent Filing for an EAD and AP

Project Information

Twin Lakes Georgia is a single-family home community outside Atlanta, Georgia, for active adults aged 55 and older. The Twin Lakes community is already thriving, with over 600 home sales and over 500 homes closed and delivered to buyers.

Immigration Safety

• Twin Lakes has created thousands of EB-5-eligible jobs.
• United States Citizenship and Immigration Services has issued Form I-956F approvals for multiple phases of the Twin Lakes project, showing that the project complies with USCIS policies, including its rural targeted employment area status.
• Investors benefit from a job creation guaranty—the developer pledges to spend enough funds to create at least 10 jobs per investor.

Financial Safety

• The Kolter Group is the developer for the Twin Lakes project. Since 1997, Kolter has invested in projects valued at over $29 billion and has never failed to repay a loan.
• Kolter has a strong presence in the single-family home market and has developed over 29,000 homes. Kolter has been recognized as one of the top 20 largest private home builders in the United States.
• Twin Lakes has secured a senior loan from Third Coast Bank, which holds over $3.8 billion in total assets.
• With over 600 homes sold and more than 500 closings, Twin Lakes is making steady progress toward completion. Hundreds of residents already live in the community and enjoy its high-end amenities.
• Each investor has a unique five-year loan term that starts on the release of the investor’s funds to the project.
• The project offers a Form I-562E approval refund guaranty; investors’ funds can be returned if their petitions are denied.

Get Your Rural Set-Aside Visa With ALCA INTERNATIONAL

With a 100% USCIS project approval rate, 15 top-tier real estate projects, and more than $2.9 billion in development, ALCA INTERNATIONAL is a leading regional center operator. ALCA INTERNATIONAL matches investors with best-in-class projects, which include high-quality, low-risk rural projects.

ALCA INTERNATIONAL provides you with the information you need to apply for your rural EB5 visa with confidence. We help you understand the requirements for a rural EB-5 visa so you can obtain U.S. Green Cards for yourself and your family.

To learn more about obtaining U.S. Green Cards through a rural EB-5 project, schedule a free consultation with ALCA INTERNATIONAL.

EB-5 concurrent filing will let investors live, work, and study in the United States sooner than before with an EB-5 investment.

On March 15, 2022, President Biden signed the long-anticipated EB-5 reform measures into law as part of an omnibus spending package. The EB-5 Reform and Integrity Act of 2022 (the “Reform Bill”) also reauthorized the EB-5 regional center program.

Changes to the regional center program took effect during May 2022—60 days after the Reform Bill’s enactment.

One of the most significant changes brought by the Reform Bill was the ability to file Form I-526E and Form I-485 at the same time (“EB-5 concurrent filing”). EB-5 concurrent filing allows investors living in the United States on non-immigrant visas to apply for adjustment of status when filing their I-526E petitions. Investors who filed their I-526E petitions before the Reform Bill was enacted can now also apply for adjustment of status prior to the adjudication of Form I-526E.

What Is Adjustment of Status?

Form I-485 allows foreign nationals temporarily living in the United States on an immigrant visa, to switch from one legal status to another. In the case of EB-5 concurrent filing, investors are expected to enjoy the benefits of lawful permanent resident status, as explained in more detail below.

Who Is Eligible for EB-5 Concurrent Filing?

Form I-485 is used to adjust the immigration status of eligible foreign nationals already temporarily living in the United States.[2] Only foreign nationals in the United States on a non immigrant visa may file Form I-526E and concurrently apply for adjustment of status. Typically, this provision applies to foreign nationals in the United States on H-1B, E-2, and F-1 visas.

EB-5 investors born in countries subject to visa retrogression are not eligible for EB-5 concurrent filing. Such individuals, however, are still eligible to file I-526E petitions.

Visa availability is published on the U.S. Department of State’s online Visa Bulletin.

Moreover, individuals from China and India (which are in visa retrogression) can avoid the processing backlog and qualify for concurrent filing by investing in a rural project.

Benefits of EB-5 Concurrent Filing

Before the Reform Bill was enacted, EB-5 investors had to wait for their I-526E petitions to be approved before filing for adjustment of status. To remain in the United States after filing their I-526E petitions, investors had to maintain their permanent residence status on some other visa until they could file to adjust their status. EB-5 concurrent filing allows investors greater flexibility.

EB-5 investors who adjust status from H-1B or E-2 can apply for work authorization that is not tied to a sponsoring employer or investment business. Such investors may work for any employer—or choose not to work at all—without jeopardizing their status.[3]

EB-5 investors in the United States on F-1 visas would be eligible, following adjustment of status, to pause certain restrictive requirements imposed on foreign nationals studying in the United States.

While waiting for Form I-485 to be adjudicated, the foreign national’s status would be “pending adjustment.” This pending status is a gray area in which investors are neither conditional permanent residents nor F-1 students.

Under U.S. employment-based visa programs that permit concurrent filing, petitioners are eligible to apply for work authorization and travel permits. These two applications would be approved in advance of the I-485 petition. Once petitioners’ work authorization and travel permits are approved, they may live, work, and attend school anywhere in the United States. Effectively, they would enjoy the benefits of a Green Card without actually having one.

Additionally, the EB-5 concurrent filing process is usually preferable to the consular visa process abroad, which is prone to experience lengthy delays and sometimes unpredictable adjudication.

A recent investor in our Twin Lakes rural project got work authorization and a travel permit in only 60 days.

Successful Sample Adjustment of Status Application

The EB-5 investor’s immigration attorney files an adjustment of status request and at the same time, also asks USCIS to issue work authorization and travel permits to the investor and his/her family members.

View a successful sample adjustment of status request here for an Indian-born EB-5 investor based in the US who joined ALCA INTERNATIONAL’s Higher Ground direct EB-5 project.

EB-5 Concurrent Filing Examples

Example #1:

Ramesh is an Indian national in the United States on an H-1B visa. He works as an IT service tech at a large company. Ramesh would prefer the freedom to work in a different position for another company, such as a start-up. His H-1B visa, however, limits him to a certain type of employment position and to companies willing to take on an H-1B worker. Start-ups seldom offer such immigration benefits.

EB-5 concurrent filing would, following receipt of work authorization, allow Ramesh the freedom to move to a smaller, growing company while waiting for his I-526E and I-485 petitions to be adjudicated.

Example #2:

Veronique is a French graduate student in the United States on an F-1 visa. She is studying business but would like to pause her studies. Her visa restricts her from taking a lengthy leave of absence from school. EB-5 concurrent filing would move Veronique into a pending adjustment status category and allow her to take a leave of absence without fear of violating her immigration position.

Example #3:

Paul is an E-2 investor from Canada who is no longer interested in owning and operating his restaurant. He wants to remain in the United States on a permanent basis but cannot under the E-2 visa. Through EB-5 concurrent filing, after becoming eligible, Paul could follow the EB-5 path to gain work authorization and related benefits, as well as United States Citizenship.

EB-5 Concurrent Filing: A Unique Benefit

EB-5 concurrent filing allows investors in the United States under other visa categories to apply for adjustment of status while filing Form I-526E. This new filing option, introduced in the Reform Bill, allows EB-5 investors to enjoy the benefits of lawful permanent resident status while waiting for their I-526E petitions to be adjudicated. For many foreign nationals, EB-5 concurrent filing offers a quick solution to living, working, and studying in the United States without the restrictions imposed by the H-1B, E-2, and F-1 visas.

If you are looking to register permanent residence or begin the EB-5 concurrent filing process, contact us to arrange a free consultation..

Authorship

This is a joint article written by Rohit Kapuria, Esq., one of the most well-respected EB-5 immigration attorneys in the industry, and Samuel B. Silverman, founder and Managing Partner of ALCA INTERNATIONAL.

[1] USCIS must issue new regulations and its interpretation of the Reform Bill within 60 days of the bill’s enactment. Therefore, certain assumptions described herein are subject to change. That said, while EB-5 Concurrent Filing is new to EB-5, it has its precedence in other employment-based visa categories. See https://www.uscis.gov/green-card/green-card-processes-and-procedures/concurrent-filing-of-form-i-485.

[2] Section 245(c) of the Immigration and Nationality Act lists several bars to Form I-485 eligibility. Readers should speak with their immigration attorneys on this matter.

[3] Investors should not rely on the terms described herein. The adjustment of the status process is nuanced, and readers should speak with their immigration attorneys about the process, timing, requirements, and risks of an a

Why EB-5? Primary Goals of Our Investors

Many of our EB-5 investors view the United States as a gateway to a better future for their families via the EB-5 Immigrant Investor Program. Our EB-5 investors are typically in pursuit of at least one of the following objectives:

• Access the U.S. public education system, ranging from elementary school all the way up through higher education at the same cost as U.S. citizens
• Increase the odds of their children’s admission to selective U.S. high schools, colleges, and universities
• Enable their children to gain unrestricted access to top U.S. employment opportunities following graduation, often by avoiding the need to win the annual H-1B visa lottery and/or meet unknown future visa eligibility requirements
• Enable foreign professionals currently on an L1 or H-1B visa to increase career mobility and future advancement
• Gain access to the most technologically advanced healthcare services only available in the U.S.
• Live, work, and retire anywhere in the U.S. and travel easily to other countries around the world
• Secure a back-up plan for safe haven in situations of political instability or economic volatility in their current country of residence
• Make a single passive investment that will qualify all immediate family members under the age of 21 for U.S. permanent residency (green cards)
• Use the EB-5 investment as a store of value to protect and preserve hard-earned investment funds while ensuring a successful immigration process through the EB-5 program

Relocating permanently to the United States with your family through the EB-5 Immigrant Investor Program (EB-5 Program) is not a decision that should be made lightly—and it doesn’t come without some risks.

An experienced EB-5 visa attorney is essential to a foreign investor’s successful EB-5 application. The process can take many years and often involves several complex requirements and a few important but sometimes confusing applications.

An EB-5 immigration attorney can help ensure the necessary requirements are met and the paperwork is submitted in a timely manner, helping to avoid potential missteps that may set your application back months or even years.

This article will cover the role of an EB-5 immigration attorney, how to find the right EB-5 attorney for you, and what you can expect from them. If you are immigrating to the United States or seeking permanent residence and your Green Card, this article will be very useful.

What Is the Role of an EB-5 Attorney?

An experienced EB-5 attorney is an expert in immigration law. They have a thorough knowledge of the intricacies of the EB-5 program. This includes the first step of filing Form I-526E, Immigration Petition by Regional Center Investor, to the last step of filing I-829, Petition by Investor to Remove Conditions on Permanent Resident Status.

Once a foreign investor has chosen a qualifying new commercial enterprise (NCE) to invest in, an experienced EB5 attorney will play a crucial role in obtaining permanent resident status for the investor and their family.

The EB-5 Immigrant Investor Program (EB-5 Program) was established by Congress in 1990 to promote economic growth in the United States through foreign investment that creates jobs for American workers. In return for their capital, the immigrant investor obtains permanent resident status for themselves and their dependents.

The EB-5 Program requires the immigrant investor to invest a minimum amount in an NCE. If the NCE is doing business in a rural or high unemployment targeted employment area (TEA), the minimum investment amount is $800,000. If located outside a TEA, the minimum is $1,050,000. The investment must create and sustain at least ten full-time positions for U.S. workers for a minimum of two years.

Most EB-5 investors choose NCEs sponsored by a regional center. Regional center sponsorship allows investors to use more flexible methods to calculate their job creation.

Key Point: What Is a Regional Center?

A Regional Center is an organization that has been approved by U.S. Citizenship and Immigration Services (USCIS) and is involved in promoting economic growth, job creation, and capital investment within a specific area.

The EB-5 process can be confusing, and it requires several applications/petitions to be filed. An experienced EB-5 attorney will act on an investor’s behalf by:

• Providing advice on all aspects of the EB-5 process.
• Ensuring that the investor’s petitions are correctly completed and filed, and that documentation complies with USCIS regulations.
• Coordinating submission of petitions to USCIS.
• Liaising with USCIS and relevant government agencies.
• Assisting with the preparation of a foreign investor’s source of funding documentation which is an integral part of the EB-5 visa approval process.
• Keeping abreast of the progress of the investor’s NCE and liaising with the regional center.
• Dealing with any issues that arise during the process.

EB-5 Investor Insight | Ram

Having worked with immigration attorneys who had filed EB-2s for my wife and friends, I realized that I needed to go with a smaller firm that could dedicate its time to me and guide me through the process.

Why Do You Need an Experienced EB-5 Immigration Attorney?

An immigrant’s decision to permanently relocate their family to the United States is a significant one. So successfully meeting all the requirements laid down by USCIS will give an immigrant the best chance of achieving permanent residency status and enjoying the freedoms and benefits that come with living in the United States.

The EB-5 process can be lengthy and complex; mistakes can cost time and money and even lead to the rejection of an application.

An experienced EB-5 immigration attorney will have an in-depth knowledge of immigration law and will be able to successfully guide prospective immigrants through the process. They will also be familiar with EB-5’s new commercial enterprise developers and help them to locate a reliable regional center sponsor.

How Do You Know If an Attorney Has Experience with the EB-5 Program?

There are many immigration attorneys available to help immigrants move to the United States temporarily or permanently in various ways. However, negotiating your way through the EB-5 application process requires experience and a proven record of success.

Immigrants should carefully vet prospective attorneys before hiring them. As an EB-5 investor, you need to carefully screen prospective attorneys to find the right one to help you immigrate successfully to the U.S. Here is a list of questions to help get you started:

How many I-526/ I-526E and I-829 petitions have you facilitated?

The I-526 petition, superseded by the I-526E petition, is the first form submitted in the EB-5 visa process. It is an application for conditional permanent residency in the United States. The petition is submitted once the investor has selected an investment in a project or business venture (Project) via an NCE and transferred their investment capital into the NCE’s account.

As part of the I-526E petition, EB-5 investment participants must provide, inter alia, documentation about the NCE and the Project; prove that they have made the minimum investment amount required; and provide personal information about themselves and eligible family members. They must also show that their investment capital has been lawfully sourced.

A successful I-526E application means that the investor and their family members can apply for Immigrant Visas giving them conditional permanent resident status (conditional Green Card). A conditional Green Card is valid for two years.

Three months before the expiry of the conditional Green Card, Form I-829 must be filed. The I-829 petition seeks to have the conditions on the investor’s Green Card removed while also securing an extension to their conditional Green Card while the I-829 petition is being processed.

An EB-5 attorney with a strong track record in the facilitation of I-526/ I-526E and I-829 petitions plays a vital role in guiding EB-5 investors through the complex immigration process and ensuring a successful outcome.

What are your approval rates for I-526E and I-829 petitions?

Although you may find an attorney that has facilitated a large number of I-526/ I-526E and I-829 petitions, you still need to look into their success rate.

There is no good reason for an attorney not to have this information available to share with you. A high number of petitions with a corresponding high approval rate is a very good sign.

Do you have a strategy for proving the source of funds on capital invested?

An investor must show that the funds they have invested in a Project via an NCE have been legally sourced. This is a key component of the EB-5 visa application process. Legal sources include salaries, dividends, gifts from family or friends, inheritances, and proceeds from the sale of real estate and stocks. The documentation must be complete and accurate. Mistakes or misrepresentations can result in a rejected application.

If funds are from the sale of property or an inheritance, the documentation will need to go back in history to show that the original purchase of the property, or the money behind the inheritance, has been lawfully sourced.

An experienced EB-5 attorney’s detailed plan for preparing the required documentation is a very important aspect of the EB-5 immigration process. It reflects the attorney’s competence, thoroughness, and ability to navigate the EB-5 program.

How prompt are you in responding to clients’ queries? And how easy will it be to contact you directly??

EB-5 visa applications can be complex so a good working relationship with your EB-5 immigration attorney is essential. The attorney must be readily available to provide guidance in the process of compiling the required documentation. When interviewing attorneys, ask questions and see if you get timely responses. Make sure that the attorney is available when you need them. You don’t want delays that extend what is already a lengthy process.

Have you worked with applicants from my country?

Every EB-5 application is different, and gathering sources of funds and tax documents can be formidable in the applicant’s home country. For example, the documentation required by USCIS may not be compatible in format with the documentation that can be accessed by the applicant. An EB-5 immigration attorney who has successfully processed applications specific to a particular country of origin can greatly simplify the process.

When vetting a potential immigration attorney, consider one who:

• Is familiar with your cultural background; and
• Has successfully processed applications from your specific country.

Your choice of immigration attorney can affect the process. A competent EB-5 attorney will know what to expect and help avoid the pitfalls that can arise.

Can you provide me with references from your clients?

A competent immigration attorney will have a list of clients who have used their services and would be happy to provide testimonials. Check the attorney’s website for online reviews, references, and testimonials. There may also be clients from your country who will speak with you about their experience.

What Are the Steps Needed to Hire an EB-5 Immigration Attorney?

Finding the right EB-5 attorney can prove difficult as there are now immigration attorneys without EB-5 experience who are taking on the work. Through its operation of 15 USCIS-authorized EB-5 regional centers sponsoring more than 2,000 EB-5 investors, ALCA INTERNATIONAL has worked with many EB-5 immigration attorneys.

Find the Right EB-5 Immigration Attorney for Your Unique Case

Given the complex and multi-year nature of the EB-5 application process, it is important to do your due diligence before selecting an EB-5 visa attorney to guide you through the process. Take the time to ask questions, listen to the responses, and clarify when and if an attorney’s response leaves you with doubts or further questions.

Talk to as many attorneys as you need to find the one with the knowledge and experience to ensure that your EB-5 application is successful. It will all be worth it when your EB-5 application is approved.

Your EB-5 attorney should:

• Have experience in submitting EB-5 applications, including, most importantly, source of funds documentation.
• Have an intimate knowledge of immigration services requirements, including job creation, and keep abreast of changes to them.
• Have a proven track record of successful EB-5 applications.
• Be responsive to your needs.

5 Things That Matter – EB-5 Project Investment Framework

After carrying out due diligence, researching all the options, and determining that the EB-5 program is the right path forward, an investor is ready to choose an EB-5 project. Selecting the right project—also known in the EB-5 program as a new commercial enterprise—through due diligence is crucial for obtaining a Green Card while safeguarding the investor’s capital. The guidance of an immigration attorney can also be of use in the due diligence process.

Investors should understand that under the EB-5 Reform and Integrity Act of 2022, new EB-5 investors who invest in rural EB-5 projects will receive significant benefits, including faster I-526E approval and access to new EB-5 visa set asides. This means that investors in rural projects will have their green card applications approved faster, and investors from China, India and Vietnam, can avoid multi-year delays waiting for a green card to become available.

We are pleased to share our EB-5 project due diligence report framework for investors considering pursuing an EB-5 visa investment.

Selecting and conducting EB5 diligence on EB-5 real estate projects can be a daunting task. Drawing on years of experience in reviewing hundreds of regional center projects, ALCA INTERNATIONAL has distilled the complex EB5 diligence process into a list of the five things that matter most for anyone conducting due diligence on an EB-5 project in a rural targeted employment area or in an urban targeted employment area. Each of these considerations identifies and explains a core issue related to the two key risk areas of any EB-5 regional center project: (i) immigration risk and (ii) financial risk.

1. USCIS I-956F Project Request Approval

Why it matters: When an investor files an I-526E petition to immigrate under the EB-5 program, United States Citizenship and Immigration Services (USCIS) must determine whether the project receiving the investment qualifies for EB-5 and is expected to create the requisite number of jobs. Projects must file Form I-956F to apply for USCIS approval before the investors can submit their I-526E petitions.

Even though investors can file their I-526E petitions before the project’s I-956F application is approved, investors in projects without I-956F approval face greater immigration risk—the project’s economic analysis could be rejected, the project could be improperly structured, or the project could otherwise be ineligible under the EB-5 program. On the other hand, projects with I-956F approval have already been reviewed and approved by USCIS.

I-956F approval and regional center designation, which is applied for through Form I-956, are not the same. Only I-956F project approval means that the project itself has passed USCIS scrutiny. At the same time, it is also important for investors to make sure that a project’s regional center has obtained official USCIS designation through Form I-956.

Investor benefit: Investors who select projects with I-956F approval know at the time of their investment that USCIS has already reviewed the project documentation and financial statements and determined that it is compliant with the EB-5 program and that the economic methodology used to calculate job creation is consistent with USCIS requirements.

The I-526E petition contains only two types of documentation: project documentation and investor documentation. USCIS will not need to re-review project documentation, which means investors do not bear the risk that the project might not be approved by USCIS. For projects with I-956F approval, USCIS will only review individual investor information and source of funds documentation when adjudicating investors’ I-526E petitions. I-956F approval may result in faster processing times for I-526E petitions because the information under review by USCIS is significantly reduced.

Due diligence questions to ask:

• Has the EB-5 project already filed and received approval for its I-956F application? A project sponsor should be direct and honest, answering either yes or no. If the sponsor claims the project has I-956F approval, follow up by requesting a copy of the official USCIS approval letter. Any reputable project sponsor can provide the letter and will be proud to do so.
• Has the EB-5 regional center sponsoring the project already filed and received approval for its I-956 application? A project sponsor should be direct and honest, answering either yes or no to both questions. If the Form I-956 has been approved, the project sponsor should be able to provide a copy of the USCIS Form I-956 approval letter.

2. Sufficient EB-5 Job Creation

Why it matters: After USCIS has approved a project under the EB-5 program and has accepted investors’ I-526E petitions, the project must create at least 10 jobs per EB-5 investor for each investor to receive his or her permanent Green Card. I-526E approval grants an investor a temporary Green Card, but for temporary residency to become permanent, the investor must file Form I-829 two years after I-526E approval. The I-829 petition must demonstrate that an investor’s investment has resulted in 10 jobs as required by the EB-5 program.

For real estate projects sponsored by a regional center, most of the EB-5-eligible jobs created are calculated based on construction expenditures and revenue generation—not on the number of individual W-2 employees. Regional economic multipliers are assigned for each $1 million of investment capital spent on construction costs or $1 million of new revenue creation. Therefore, most of the estimated EB-5 jobs created by the regional center project and assigned to EB-5 investors are calculated using the project’s construction budget and estimated revenues as set out in the business plan.

If a real estate project is in the early stages of development and has not created all of the required EB-5 jobs at the time of the EB-5 investment, the investor faces greater immigration risk because the project might lack sufficient capital, face delays in expending that capital, or fail to create revenue as expected—any of which might result in a failure to create the number of EB-5 jobs required to ensure all EB-5 investors receive their permanent Green Cards.

Note regarding bridge financing: Due to the long wait times associated with the EB-5 process, reputable and experienced project sponsors often use bridge financing for projects while raising EB-5 capital. Access to bridge financing is a positive indicator that the project sponsor has the financial means to fund the project without raising all or any of the EB-5 capital.

This approach benefits EB-5 investors because all jobs created by bridge financing count toward the EB-5 job requirement. Through bridge financing, some—or even all—of the required jobs can be created before any EB-5 investors make investments. In such cases, if the project has also received approval for its I-956F application, EB-5 investors can be assured that the project has already created all jobs and met all requirements for their permanent Green Cards even before making their investments.

Investor benefit: Projects that are under construction and have spent significant amounts of capital—including the use of bridge financing—have already created a pool of jobs for potential EB-5 investors. Such projects offer the security of advanced project completion and ensure that the required number of jobs will be created for EB-5 investors to receive their permanent Green Cards.

Due diligence questions to ask:

• Has the project started construction? Investors should be cautious about projects not yet under construction. Many developers use a business plan that is dependent on EB-5 capital and will not break ground before securing these investments. In such cases, if the project fails to raise the EB-5 capital, the project will fail.
• Have enough jobs been created for all EB-5 investors in the project? The safest projects will have not only started construction but will be far enough along in construction to create the required jobs for all the EB-5 investors. Such projects effectively have eliminated the immigration risk.
• How many jobs will come from construction alone, not revenue creation? The more a regional center project depends on construction spending alone for EB-5 job creation, the greater the certainty that enough EB-5 jobs will be created. If EB-5 job creation depends on future revenues, the immigration risk to EB-5 investors is higher because not only must the regional center project’s construction spending match its budget but the project’s revenues must also meet expectations. Revenues are projected years into the future and may not adequately account for changes to the market or other factors.
• If the project is already under construction, is sufficient capital available to complete the project and create the total number of projected jobs? Investors should be wary of regional centers projects that are delayed or have been “under construction” for long periods. Appropriate construction timelines vary based on asset type, size, and location.

3. Properly Structured Capital Stack

Why it matters: A regional centers project’s capital stack is the combined sources of its financing. For EB-5 real estate projects, the capital stack is usually divided into senior loan financing from a bank, EB-5 project financing—usually in the second position as mezzanine debt or preferred equity—and equity financing from the developer. Understanding how the capital stack is structured and how much of the funding is already committed offers insight into the economic risk of a project. The primary risks are as follows:

• No bank financing has been drawn. Certain projects may have only secured a commitment letter or may lack bank financing for other reasons. In such cases, the EB-5 investors bear the risk that the bank will not finance the project. Without bank financing, which is often most of the capital for the deal, the project will likely fail.
• No developer equity is committed. Certain project developers may not commit equity until the EB-5 capital is fully raised and committed. This may indicate that the developer is wary of the project risks and will only take chances with other people’s money or that the developer doesn’t have alternatives and can’t complete the project without EB-5 capital.
• Developer equity amount is too small. Working with project developers that contribute only a nominal amount of capital to a project—such as 5% of the total cost—may increase both immigration risk and financial risk to EB-5 investors. Such developers have not taken on enough risk to attempt to mitigate and reduce the project’s overall risk. We recommend seeking projects with a minimum of 10% committed developer equity.

Investor benefit: Investing in a properly structured project that is partially or fully financed by a reputable and well-capitalized developer will increase the likelihood that investors will receive their permanent Green Cards. It also increases the likelihood that investors’ capital will ultimately be repaid at the end of the loan or investment period. Exit opportunities are available for completed projects, but incomplete or stalled projects do not have favorable exits for EB-5 investors.

Due diligence questions to ask:

• What is the capital stack for the EB-5 project? The capital stack is typically reflected in both percentages and hard numbers. For example, for a project that costs $100 million, a typical capital stack may have 65% senior financing ($65 million), 15% EB-5 mezzanine financing ($15 million), and 20% developer equity ($20 million). In general, EB-5 investors should strongly avoid projects with more than 50% EB-5 financing in the capital stack and projects that do not use third-party bank financing.
• Has a senior loan been secured and, if so, how much has been drawn? Commitment letters and letters of intent are not binding. Investors should ensure that a senior loan agreement has been executed with a reputable financial institution. Depending on asset class, some developers may have strong relationships with lenders and only secure the loan later in the process if they have a sufficient balance sheet.
• Has developer equity been committed? Investors should request a copy of the equity commitment letter from the developer and other evidence that the developer has committed the stated equity to the project. If the land is purchased and construction has started prior to EB-5 investment, this is a strong signal equity is committed.
• Is the developer equity amount too small? Generally, developer equity amounts of less than 10% indicate that the developer has not incurred enough risk to mitigate project risk.

4. Feasible Exit Strategy

Why it matters: A project’s exit strategy is how the project will ultimately make money—specifically, enough money to pay back all EB-5 investment capital. Many EB-5 projects are structured as real estate projects because real estate projects have hard assets as collateral and a relatively easy-to-understand exit strategy in a well-known and mature market.

While emerging, venture capital, and speculative investments may qualify for the EB-5 program, they typically are not a good fit because of the greater financial risk associated with such investments. Gambling on speculative investments makes sense for those chasing a high return, but such investments do not make sense for EB-5 investors who want to ensure that they obtain Green Cards and safeguard the return of their capital in a defined time period.

Investor benefit: A clearly defined and feasible exit strategy is critical to the return of the EB-5 investor’s capital. A reputable developer with a track record of repayment and exits increases the likelihood that the EB-5 investment capital will ultimately be returned to the investor. A regional center’s track record should also indicate its commitment to repaying investors.

Due diligence questions to ask:

• What is the exit strategy for the EB-5 project and EB-5 investors? Real estate projects typically employ two primary types of exit strategies: selling the project or refinancing the asset after operations are stabilized. In the first case, investors need to determine the likelihood, timing, and price for the completed project to sell. For a refinance, investors need to determine the likelihood that the project will be well-operated and generate enough value.
• If the exit strategy is from unit sales, what is the third-party appraised sales value for the project upon completion? Reputable project sponsors obtain third-party appraisals for projects intended for sale upon completion.
• Additionally, what is the plan for redeploying the capital after the unit sales? The redeployment of investment funds is an important topic for EB5 diligence, and having a clear plan in place is critical to ensuring Green Card safety.
• If the exit strategy is from refinancing from operations, what are the projected revenues and costs? Reputable project developers have financial projections and pro formas regarding expected revenues and costs that are backed up by third-party appraisals and data.
• Has the developer or project sponsor previously sold or refinanced similar projects in the past, and have these past projects met their anticipated financial targets? Reputable project developers have successfully executed similar projects in the past with conservative financial assumptions that were either met or exceeded in terms of the sale price or exit strategy assumptions.

5. Guarantees and Protections

Why it matters: As part of the EB5 diligence process, investors should look for well-structured projects typically feature certain guarantees and protections for investors that limit immigration and financial risk. The following are some common guarantees and protections:

• An I-526E refund guarantee ensures that if an EB-5 investor’s I-526E petition is denied, their EB-5 investment will be refunded. Without this guarantee, a denial could mean that an investor’s capital remains invested for an extended period with no Green Card benefit and little or no return. An I-526E refund guarantee should be from a strong, well-capitalized entity, which helps ensure that an investor will be able to receive his or her capital back promptly in the case of an I-526E denial.
• A completion guarantee ensures that the developer will fund any project costs in excess of the budgeted amount. Developers securing senior bank financing should always have this type of guarantee. Without it, any costs over budget could result in a delayed or incomplete project.
• Repayment terms ensure repayment within a set timeframe. Projects typically have loan terms, but they may allow extensions for long periods, or even indefinitely. They may also have equity conversion options. In such cases, the project sponsor may be able to keep EB-5 capital invested even after investors have received permanent Green Cards. Well-structured projects usually require repayment within a certain period once an EB-5 investor has received his or her permanent Green Card or, even better, once each investor has filed his or her I-829 petition.

Investor benefit: Guarantees and protections are all for the investor’s benefit. Their absence may raise concerns or indicate high immigration or financial risk.

Due diligence questions to ask:

• Does the project fully refund EB-5 investor capital if an I-526E petition is denied? Strong EB-5 projects have a clear plan to repay investors in the case of an I-526E petition denial.
• Does the project have a completion guarantee? A completion guarantee reduces the job creation and financial risk since a fully constructed project is worth substantially more than a partially completed project and all construction jobs will be created if the project completes construction.
• What are the repayment terms? Strong EB-5 projects have a clearly defined term of investment with minimal flexibility for the project developer to extend or delay repayment of EB-5 investor capital.
• What is the loan term? The loan term should be clearly defined and meet USCIS requirements for keeping the EB5 investment capital at risk.
• Is there any option or ability for the loan to be converted to equity without EB-5 investor consent? Some projects have this type of a loan conversion option which can be highly misleading for potential EB-5 investors. Investors should be cautious and confirm if this type of conversion option is present.
• What other guarantees or protections does the project offer? Strong projects offer multiple guarantees and other similar protections for EB-5 investors to reduce both immigration and financial risk.

Note regarding principal repayment guarantees: Certain projects may guarantee the repayment of EB-5 investors’ investment principal. Such guarantees are likely to result in increased scrutiny from USCIS and even denials because such guarantees are in direct conflict with the “at-risk” requirement of the EB-5 program. Investors should carry out careful EB5 diligence to determine how such repayment guarantees are worded and whether they are likely to be accepted by USCIS. Generally, we do not recommend investing in projects with repayment guarantees.

Note regarding EB-5 capital repayment with a real estate asset: Certain projects may repay investors by giving them houses or condominium units. Once again, USCIS is generally against this type of repayment because it conflicts with the at-risk requirements of the program. While such projects might have been approved in the past through clever structuring that slipped past USCIS scrutiny, USCIS is now much more vigilant in striking down such Green-Card-for-real-estate schemes. We do not recommend investing in projects that promise a real estate asset as EB-5 capital repayment.

EB-5 investments can be risky. Foreign nationals invest in EB-5 projects hoping to receive permanent residency in the United States. Investors also want their money to be returned—sooner rather than later. If they can eliminate immigration risk entirely by selecting an under-construction EB-5 project that has already created 10 jobs for each EB-5 investor, even better.

For foreign nationals seeking to immigrate to the U.S. with an EB-5 visa and to protect their investments, avoiding financial and immigration risk is key to success. EB-5 investors can invest with confidence by following the simple project selection framework outlined in this article.

Background

The EB-5 immigration process is complex, but understanding the risks involved in making an EB-5 investment doesn’t have to be difficult.

EB-5 investors do not need to understand every detail of the EB-5 program to select a safe project. Instead, investors can make informed decisions by learning some basics about the current state of the EB-5 program, by understanding key risks, and by applying our guiding principles for selecting low-risk projects.

Recent Migration Trends

The COVID-19 pandemic began in 2020 and deeply affected all aspects of life for people across the world. Immigration to the United States became increasingly difficult. COVID-19 also served to accelerate population shifts in the nation. In some cases, people began to move away from cities and states that had more restrictive COVID-19 laws and policies.

The southeast United States, in particular, has seen tremendous population growth in the last two years.

A New Era: The EB-5 Reform and Integrity Act of 2022

For the past two years, the EB-5 program has undergone significant changes.

In June 2021, the EB-5 Regional Center Pilot Program lapsed. This program allows licensed entities known as regional centers to pool EB-5 funding from multiple EB-5 investors. Since the vast majority of EB-5 visa applicants invest in regional center-sponsored projects, the lapse of the regional center program dramatically reduced the number of EB-5 investments available to foreign investors.

Then, in March 2022, Congress passed the EB-5 Reform and Integrity Act of 2022 (the “RIA”). The RIA reauthorized and substantially modified the EB-5 Regional Center Program. While United States Citizenship and Immigration Services (“USCIS”) has yet to provide guidance on much of the RIA, the effects of the reform bill are already being felt across the industry.

The RIA tightened regional center compliance and reporting requirements. The treatment of targeted employment areas (“TEAs”) also changed. One of the most important changes is that rural TEAs now qualify EB-5 investors for faster application processing.

The Two Key Risks for EB-5 Investors

Despite the recent changes to the EB-5 program, the two key risks to EB-5 investors remain the same: immigration risk and financial risk.

Immigration risk reflects how likely an EB-5 investor is to receive his or her Green Card. Financial risk, on the other hand, reflects how likely an investor is to recover his or her investment capital.

Understanding these two key types of risk is vital for EB-5 investors wanting to invest in low-risk projects.

Low-Risk Projects Have Current Success, not Future Projections

The guiding principle for selecting low-risk EB-5 projects is simple: show, don’t tell.

Many EB-5 projects make promises about future performance, but proof is better than promises. EB-5 investors seeking low-risk projects should look at what is currently true of a project, not what the developer hopes will happen at some point in the future.

Has the project already received financing, or does it hope to obtain financing in the future? Is the project already under construction, or is it waiting for permits or other approvals? Are EB-5 jobs already created, or are they merely estimates? Is the project already enjoying financial success now, or does it hope for success eventually?

EB-5 investors can reduce their immigration and financial risk effectively to zero by selecting projects that are compliant with all EB-5 program requirements and are—and will remain—financially successful.

Below is a simple framework that applies the guiding principle given above to the selection process of EB-5 projects with low immigration and financial risk. If a project fails to meet the criteria of any tier in this framework, the project relies on projections and hopes for the future rather than demonstrating real success now. Any such project poses a higher risk and EB-5 investors may want to avoid it.

Framework Tier I: Geographic Considerations

When deciding whether to invest in a project, EB-5 investors should consider its location. Because projects in states or cities facing economic decline are riskier, investors should avoid such projects.

Population trends often directly correlate with economic trends. If a city or state’s population is decreasing, the regional economy tends to be less active. Many people are moving out of states with high costs of living, a poor business climate, and high rates of crime. In the past two years, for instance, residents of California, New York, and New Jersey have been moving to the South and Southeast.

This recent population shift has largely benefitted the South and Southeast. States like Florida and Texas are among those experiencing the most growth. Prior to recent trends, the Southeastern United States had long been a destination for retirees; however, the region’s sustained population growth is resulting in increased economic activity and a strong housing market for young Americans as well.

EB-5 projects in the South and Southeast benefit from a stable trend of population growth. As a result, such projects are currently favorable and present a lower risk to investors.

Key Question: Is the project in an area with a declining population? If so, avoid it.

Framework Tier II: Industry Considerations

EB-5 investors should seek projects from select industries that align well with the EB-5 program’s requirements.

Some types of projects—like hotel and multi-family rental apartment buildings—are often riskier for EB-5 investors. Any project in an industry that relies on forecasts and operational estimates carries more risk.

Investors cannot know whether a project is successful based solely on projections. For such projects, predicted success will not be proven right or wrong for years. Investors should avoid these types of projects.

Instead, EB-5 investors should choose projects that clearly demonstrate whether they are currently viable.

Two ideal industries for EB-5 projects are condominium and single-family home developments. With these types of projects, investors can easily identify whether demand exists based on actual sales data. As a result, they can see how successful the project is at any given moment, not just how successful the developer hopes it will be.

These kinds of projects are far less risky to investors.

Deciding on the Right Industry

Two of the lowest-risk project types on the market today are condominiums and single-family home developments. For EB-5 purposes, the main difference between these two types of projects is their location. Condominiums are found in urban locations, while single-family housing is often found in rural areas.

The location of a project is important to EB-5 investors for several reasons.

A project’s location will determine whether or not it is in a TEA—and, if so, what kind of TEA it is in. Projects in TEAs allow EB-5 investors to invest $800,000 instead of $1,050,000.

In addition, projects in both urban and rural TEAs qualify investors and their families for reserved visas. If an EB-5 investor’s country of birth is experiencing a backlog of EB-5 visa applications—as is currently the case with China and India—investors who qualify for reserved EB-5 visas through a TEA project can avoid extensive processing delays.

Rural TEAs also qualify investors for priority immigrant petition processing. For investors already in the United States, this faster processing is not needed. But for those out of the United States, faster processing means getting an EB-5 visa much more quickly than otherwise possible.

EB-5 investors not yet in the United States should strongly consider investing in rural TEA projects.

Key Question: Is the EB-5 investor already in the United States? If not, choose a rural TEA project.

Urban Condominium Development Projects

Condominium projects are ideally suited to EB-5 investment.

First, investors can quickly determine whether a condominium is being built to respond to the current demand in the housing market; sales show whether demand exists. If little demand exists, the project is likely being developed based on future projections.

Clear indications of demand make condominium projects safer for EB-5 investors because they can determine whether the project is already successful.

Second, condominiums are typically pre-sold. Even while under construction, condominium projects often have some cash flow in the form of deposits. These deposits provide developers with cash to help offset costs and become part of a project’s source of capital.

EB-5 investors can examine sales to better gauge the financial risk involved in a project.

Rural Single-Family Home Development Projects

Like condominium projects, single-family home projects are excellent candidates for EB-5 investment.

With single-family home projects, investors are able to assess demand in the current market. Home sales velocity reveals real demand, and investors can avoid projects that do not have strong sales. By relying on actual sales data rather than predictions, EB-5 investors can lower their financial risk.

Single-family home sales, like condominium sales, provide developers with cash that can be used to fund subsequent construction. Unlike condominium projects, though, single-family home projects can be split into individual home builds that require relatively small sums of capital to complete.

Unlike condominium projects, construction costs do not all need to be spent prior to construction completion. With less capital needed upfront for each house and revenues from sales funding future construction, single-family home projects are safer for EB-5 investors.

Avoiding Risky Industry Categories

Some types of projects have high upfront costs and earn no revenues for months—sometimes years. Hotel, manufacturing, and multi-family home projects all require tremendous long-term spending before they see any revenue stream.

EB-5 investors should avoid projects with high upfront costs and delayed earning potential.

Because of the development timeline for such projects, expected revenues are based on assumptions that may not prove to be true. Current demand is not necessarily an indicator of future demand. An economic downturn can quickly turn predicted gains into losses.

EB-5 investors should generally avoid projects that rely solely on predicted future revenues rather than actual present earnings.

Key Question: Is the project’s industry reliant on predictions rather than current sales data? If so, avoid this kind of project.

Framework Tier III: Project Considerations

Not every condominium or single-family home project in the Southeast is low risk. While the location and industry of a project impact its risk, each project has its own risk profile. EB-5 investors need to carefully consider the specific risks of a project before choosing to invest in it.

Strong Developer Track Record

EB-5 investors should seek projects by reputable developers with a track record of success. While success in the past does not guarantee it in the future, a pattern of success over time does lower risk.

Developers should have direct industry experience and proven market knowledge. Saying they are experts or industry leaders is not enough—their expertise should be demonstrated in their track record.

Finally, developers should also have a clean record of repaying all debts.

Key Question: Does the developer have a clear record of success? If not, look for another project.

Construction Underway

The safest projects for EB-5 investors are already under construction and have created enough jobs to meet the job-creation requirement for all their EB-5 investors at the time of investment.

EB-5 investors should avoid projects that are not yet being built. Delays in construction can happen at any time, for unexpected reasons, and may last longer than expected. Such delays can affect job creation, which may jeopardize an investor’s immigration efforts.

Key Question: Is the project under construction? If not, look for one that is already being built.

Sales Have Begun

Condominium or home sales show the project is actively meeting demand and is attractive enough to draw buyers. EB-5 projects with existing sales are far less risky than those that have not proven their market viability.

Key Question: Does the project have current sales? If not, look for one that does.

Financing Already in Place

As the U.S. economy once again enters what many economists fear is a recession, project financing is a major issue for EB-5 investors to consider when looking for a safe investment. EB-5 investors should seek projects with financing from major institutional lenders with fixed rates.

In addition, investors should be leery of any project that has not secured its senior financing. The safest projects for EB-5 investors do not rely on EB-5 funds but use EB-5 capital to replace more expensive forms of capital.

Key Questions: Is the project fully financed without EB-5? If not, avoid it. Does the project have fixed-rate financing in place? If not, look for one that does.

Independent, Reliable Regional Center Sponsor

Compliance with USCIS regulations is vital for success in the EB-5 visa program. An EB-5 project’s regional center sponsor is responsible for EB-5 compliance and reporting.

Having an EB-5 regional center sponsor with a clean record has always been important. Because of the RIA’s increased compliance and reporting standards, now, more than ever, EB-5 investors must carefully vet their regional center sponsors.

EB-5 investors should not simply accept a regional center’s claims but should look for a record of compliance. A good regional center has a clear compliance policy and follows it strictly.

EB-5 investors seeking low-risk projects should set a high standard for regional center sponsors. Regional centers should be highly transparent and provide regular updates. They should be experienced in EB-5 documentation and compliance. The regional center operators should know the industry and stay up to date on changes to the EB-5 program.

Moreover, a safe project will have an independent, third-party regional center that is not affiliated with the project’s developer. Independence reduces the likelihood of conflicts of interest, which in turn reduces the risk for EB-5 investors.

Key Question: Does the regional center have no compliance history or a history of project denials? If so, avoid this project, as immigration risk is high.

Examples of Low-Risk Projects

ALCA INTERNATIONAL is pleased to offer an array of high-quality, low-risk projects. ALCA INTERNATIONAL prides itself on providing the highest caliber of EB-5 compliance through independent, third-party regional center sponsorship. With a 100% project documentation approval rate with USCIS across more than a dozen projects, ALCA INTERNATIONAL offers investors the confidence and peace of mind that come only with proven reliability.

To help ensure successful outcomes for EB-5 investors, ALCA INTERNATIONAL sponsors projects only if they meet strict criteria. Three such projects are listed below:

Wohali Utah: Rural Master-Planned Golf Community Development Project

Wohali Utah is a 428-residence community and golf course under development just north of Park City, Utah. It offers some of the best features of any EB-5 project available today.

Wohali Utah is in a rural TEA, construction has begun, and significant job creation has already taken place. The developer has provided EB-5 investors with industry-best guarantees, and the EB-5 loan is secured by the developer entity. A unique loan structure minimizes the loan term for each EB-5 investor and reduces risk.

Saltaire St. Petersburg: Urban Condominium Development Project

Saltaire St. Petersburg Phase II is a 35-story luxury condominium development in downtown St. Petersburg, Florida. With a host of best-in-class features, Saltaire is one of the most compelling urban EB-5 projects available today.

Saltaire St. Petersburg is an urban TEA project already under construction. This development has already created more jobs than required for all EB-5 investors in the project to obtain Green Cards. All condominiums have already been sold.

Saltaire St. Petersburg is being developed by the Kolter Group (“Kolter”), an experienced condominium developer.

Twin Lakes Georgia: Rural Single-Family Home Development Project

Another project by Kolter, Twin Lakes Georgia is a 1,300 single-family home community being developed just outside of Atlanta, Georgia. It is one of the most compelling rural EB-5 projects available today at $800,000. Twin Lakes Georgia is an equity investment.

Twin Lakes Georgia is a rural TEA project under construction with all necessary EB-5 jobs already created. Kolter is also an experienced single-family home community developer that has built more than 20,000 homes.

For foreign nationals striving to secure their future in the U.S., the Green Card application process can be daunting and challenging. The process requires detailed documentation and interviews. This is where the EB-5 Immigrant Investor Program comes in, helping foreign nationals achieve Green Card status while positively contributing to the economy and local communities.

In this article, we’ll take a closer look at the EB-5 program and why you should consider investing in it to ensure residency in the U.S.

What Is The EB-5 Investor Program?

The EB-5 visa program was created in 1990 to allow foreign investors to become permanent residents of the U.S. These investors are required to invest an amount of money towards a qualifying new commercial enterprise (NCE) that will create at least 10 full-time jobs for American workers.

To be eligible for a permanent resident card, investors must meet specific requirements, including:

• Proving that their investment funds were obtained lawfully.
• Showing that their investments were successful in creating full-time jobs.

Becoming a U.S. Green Card holder can benefit investors and their families in many ways. From profitable business opportunities, to easier college admissions, to residing anywhere in the United States, an EB-5 visa can be a foreign national’s ticket to a brighter life.

8 Reasons To Invest In Permanent Residency

Now that you know a bit more about the EB-5 program, let’s take a closer look at the Green Card benefits you can have with permanent residency.

1. A U.S. Green Card holder can enjoy unlimited employment opportunities

A foreign national with lawful permanent resident status in the United States can work almost anywhere and for anyone in the country.

Green Card holders can seek employment at startups, small businesses, and other organizations unlikely to sponsor foreign nationals for a work visa. Lawful permanent residents may also switch jobs as freely as U.S. citizens and can take on additional work if needed—a benefit that is currently inaccessible to non-Green Card holders.

You can also use your Green Card as proof of employment if you need to apply for Social Security benefits and loans or when you file income tax returns.

If an EB-5 investor applies for U.S. permanent resident status for their children, they may also work freely in the United States if they are old enough to take on employment.

The employment advantages of a U.S. Green Card make the EB-5 visa program a particularly beneficial option for holders of an H-1B or L1 visa.

• An H-1B visa is a nonimmigrant visa for highly-educated foreign workers in specialty occupations to work for a single employer in the United States temporarily.
• An L1 visa is a nonimmigrant visa for foreign executives or managers who want to temporarily work in the United States branch of their same international company.

Individuals with these employment visas are restricted to a single employer and are forbidden from engaging in additional work activities, even freelance ones.

Foreign nationals may be restricted to a particular area and are only authorized for a temporary stay in the United States, meaning they must look for alternative ways to remain in the country.

Holders of an H-1B or L1 visa may invest in programs like EB-5 to help them expand their employment opportunities and extend their stay in the country. Investing may also make the Green Card application easier.

2. U.S. Green Card holders’ children may enroll in U.S. public schools

One of the key benefits of the EB-5 program is the opportunity for investors to apply for permanent residency for their spouses and qualifying children.

As long as an investor’s child is unmarried and below the age of 21, they qualify for an EB-5 visa.

If an investor’s children are young enough, they may take advantage of the high-quality U.S. public education system—which will prepare them for a life of success in the United States—at no extra cost.

Children who enroll in the U.S. public school system gain a high-quality education that helps them refine their strengths and succeed in various areas of life. The U.S. education system doesn’t just focus only on academic achievement—it also helps children foster their social skills and encourages participating in extracurricular activities. EB-5 investors can ensure their children are immersed in English and U.S. culture, setting them up to succeed in U.S. universities and beyond.

3. Green card holders have a higher likelihood of being admitted to U.S. universities

Around the world, international students complete the chance to study at a world-renowned U.S. university. Unfortunately, competition is fierce, and with most U.S. schools placing an unofficial cap on the number of international students they accept, those without citizenship or permanent resident status are at a disadvantage.

That’s why an EB-5 visa can be beneficial to students.

With U.S. permanent resident status, an applicant is more likely to be admitted, representing a major benefit for EB-5 investors and their children.

Additionally, U.S. Green Card holders may be eligible for government-sponsored financial aid, scholarships, and in-state tuition savings that are often unavailable to international applicants.

4. U.S. Green Card holders can access high-quality healthcare services

EB-5 investors can take advantage of the many state-of-the-art health facilities in the United States because they have the means to pay for health insurance and medical care.

Access to health insurance also gives foreign nationals the same benefits as U.S citizens when it comes to medical care.

The United States places a large focus on medical research and innovation, allowing most foreign investors to access high-quality healthcare that may be unavailable elsewhere.

5. Valid Green Card holders are free to live and travel anywhere in the country

The U.S. is a popular immigration destination because of its variety of natural and man-made attractions—perfect to suit any lifestyle.

With an EB-5 visa, foreign investors can freely choose where they want to live while retaining the right to travel around the country at will.

U.S. Green Card holders can also travel abroad easily without facing issues upon re-entering the country, such as deportation concerns.

Permanent residents are granted re-entry almost as easily as citizens. However, it’s recommended that they don’t spend too much time abroad, or they could risk having their resident status revoked by United States Citizenship and Immigration Services (USCIS).

The ability to travel to some countries visa-free is also a major benefit to EB-5 investors from countries with weak passports.

6. U.S. Green Card holders qualify for support after retirement

Just like U.S. citizens, EB-5 visa holders may receive pension support following retirement. They are eligible to receive the pension funds they worked toward in their country of origin and the United States.

U.S. permanent residents may also take advantage of Medicare and other social welfare programs in the country if necessary.

7. Green card holders can easily set up a life and future in the U.S. with their family

EB-5 investors only need to invest $1.05 million—or a minimum investment of $800,000 in a targeted employment area (TEA) commercial enterprise—to apply for visas for their families.

With the U.S. permanent resident status granted by the EB5 regional center program, investors can more easily secure a mortgage, health insurance, and life insurance in the country.

This makes it significantly easier to start a life for their families in the U.S. too.

8. Green card holders can enjoy the political and economic security of the United States

Across the world, people face government corruption, inflation, crumbling infrastructure, and a lack of access to healthcare and education.

Fortunately for U.S. Green Card holders, the United States is a safe haven, offering high-quality education and healthcare services alongside a democratic political system that ensures justice and fairness.

The U.S. also has one of the strongest economies in the world, offering security to EB-5 Green Card holders and their hard-earned money.

Frequently Asked Questions

What is the EB-5 Immigrant Investor Program?

The EB-5 Immigrant Investor Program is a lawful means of immigration into the U.S. for foreign nationals in exchange for one investment in an NCE in the country.

The program is administered by USCIS, an office of the U.S. Department of Homeland Security.

How do you apply for an EB-5 visa?

You can apply for an EB-5 visa through USCIS.

Before submitting an application to USCIS, foreign investors must first invest the required minimum investment in a qualifying NCE. This investment can be made directly or through an EB-5 regional center. When the investment is made, foreign investors fill out Form I-526 or I-526E to prove their eligibility for an EB-5 visa.

Once approved, investors and their eligible family members will be granted two-year conditional permanent residency in the United States. In the final three months of the two-year conditional residency, investors file Form I-829 to prove they have satisfied all of the EB-5 visa program requirements.

If this application is approved, foreign investors and other family members will be given Green Cards that grant them full permanent resident status in the United States.

What is the regional center program?

EB-5 regional centers are commercial businesses that act as agencies, pooling investor capital to fund larger projects at a lower risk.

Regional centers must be approved by USCIS to participate in the EB-5 visa program, with geographic coverage granted over specific U.S. states or areas.

Investing through an EB-5 regional center allows investors to include indirect jobs toward the job creation requirement. They may also direct employees of the NCE, making it much easier to meet the EB-5 visa program’s job creation requirement.

This is why nearly all foreign investors invest through the regional center program. In fact, according to a 2021 study, regional center investors accounted for 93% of all EB-5 visas awarded.

What is a qualifying EB-5 project?

An EB-5 project is the actual real estate development being managed by the investor’s chosen NCE or regional center.

For example, a foreign investor invests their EB-5 capital in a limited liability company (LLC)—known as the NCE—specializing in property development. The LLC then uses the investor’s funds to construct a new hotel, which will be known as the EB-5 project.

An NCE must be a legal, for-profit domestic business formed in the United States after November 29th, 1990. The NCE must also be able to clearly demonstrate through their own business plan and other supporting evidence that the foreign investor’s EB-5 capital will create or preserve 10 full-time U.S. jobs.

How can I get started?

Regardless of their goals for life in the United States, foreign investors and their families will likely benefit from an EB-5 visa.

With the most advanced healthcare in the world, the largest and safest economy, world-renowned education, and opportunities everywhere, permanent residence in the United States offers remarkable benefits.

Reach out to ALCA INTERNATIONAL today to learn more about the process and determine your best path forward.