The Immigrant Investor Meets Realities, Part I

immigrant-investor
The Immigrant Investor visa program presents opportunities for foreign investors to obtain a green card through investing in a qualified business

 

 

 The Immigrant Investor program can be a gateway to opportunity and a green card, but it is not for the faint of heart.  Success requires  planning, patience, attention to detail, and assembling a trustworthy team of professionals. 

In the series of articles to come, we will discuss the EB-5 immigrant investor visa program, but, for now, let us discuss what it is not:

1. It is not a Quick Path to Permanent Residency

Obtaining a green card under the EB-5 immigrant investor program is a long term project. Just to obtain conditional residency and admission to the U.S. can take two years. Then, there is the equally lengthy process of changing status from conditional residency to permanent residency. All told, the process can take over four years, and this may be impacted by visa availability.

2. It is not an Inexpensive Process

Depending on the project, the minimum requisite investment in a business venture under the EB-5 program is either $500,000 or $1 million, but there are costs and expenses associated with participating as an investor in an EB-5 project that can require the commitment of additional funds, oftentimes in the range of $50,000.00 to over $125,000.00, and sometimes more.

Professionals, like lawyers, accountants and economists, bring to the table critical expertise, but they charge fees and these fees are likely to fall outside the scope of the principal EB-5 investment. Administrative fees and some types of managements fees may also not count as investment capital.  

3.  It is not a Riskless Process

 EB-5 regulations require investors to put their investment funds “at risk”.  This means that the investor has to be prepared to lose the whole investment. Redemption provisions contained in investment documents designed to mitigate this risk are prohibited.

EB-5 projects sponsored by investment vehicles called Regional Centers are not generally vetted by the U.S. government so it is still incumbent upon the EB-5 investor to engage in a period of due diligence to find out about the bonafides of a project.

If the EB-5 investor, himself or herself, wants to initiate a project, it will be important to develop a detailed business plan that shows how the project will be viable and meet program requirements.

4.  It is not a process that can be managed by a single lawyer or accountant

No one professional  is going to be able to cover all the issues relating to investment strategy, evaluation, and project implementation. Indeed, investors interested in investing more passively in EB-5 projects should at the outset be speaking to a certified investment advisor–not even an immigration attorney.

So the prudent way of thinking about developing an investment strategy is to consider developing a strong team of professionals that will act in the investor’s interest. A professional team can  include  an investment advisor, an immigration attorney, a corporate law attorney, an accountant,  an economist, maybe a business plan writer,  an escrow company familiar with holding and tracking EB-5 investments, etc.

Next page: #5 and Key Points to Remember

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