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The EB-5 program was first established by the United States Congress in 1990 with the goal of stimulating the U.S. economy through job creation and capital investment by foreigners. Over the past three decades of its existence, and especially since the Great Recession of 2008, the program has been vital in boosting the U.S. economy at no cost to U.S. taxpayers. With over 59,000 EB-5 petitions approved from financial year 2013 to 2022, the EB-5 program has been successful in allowing foreign investors to realize their U.S. immigration goals.

Foreign investors may obtain U.S. permanent residency and Green Cards for themselves, their spouse, and children under the age of 21 through an investment of $800,000 in a government pre-approved project. These projects are hosted by organizations called regional centers, which are economic units designated by the U.S. government with the goal of promoting economic growth. Regional centers pool foreign investors’ funds to finance projects in the United States. The investment amount is eligible for return to the investor after expiration of the relevant investment cycle, which is approximately five years. 

The success of an EB-5 petition greatly hinges on the choice of regional center and project as well as the submission of required documents to the U.S. Citizenship and Immigration Services (USCIS), the federal agency that administers the EB-5 program.

Choice of regional center and project

While the rules of the EB-5 program require that the $800,000 capital investment must be “at risk,” there are certain steps that a prospective investor may take to mitigate their risk, including choosing a reputable regional center and project for their investment. A suitable regional center is one that has a stellar track record and vast experience in the EB-5 industry. Prospective EB-5 applicants must ask the right questions when it comes to investing in a regional center, such as the number of projects hosted by the regional center, the percentage of successful projects, and the return of investor funds. 

In addition to choosing a suitable regional center, the project choice is also essential. Investors must look into the project developer’s track record, including its history of repayment of investor funds, whether the developer has a history of foreclosures, and the number of successful project completions by the developer. Additionally, the project must create or maintain at least ten full-time jobs for U.S. persons to qualify for the EB-5 program. Therefore, prospective investors must assess a project’s business plan to ensure that the job creation requirement will be satisfied. Another consideration is the capital stack of the project, which refers to the composition of the project financing. A good capital stack is one that includes all three forms of financing – sponsor equity, construction loan, and EB-5 investors’ capital. If a project is only being financed through EB-5 capital, this should be a red flag to investors. A further consideration is transparency. Positive signs of transparency include a site camera allowing the investor to monitor the construction progress, regular construction reports provided by the regional center, and access to the regional center team for any questions that an investor may have regarding both the regional center and project.

For a more in depth analysis of the various factors that an investor must consider prior to choosing a suitable regional center and project for their EB-5 investment, you may read our blog here.

Source of funds documentation

The EB-5 program has stringent requirements when it comes to the source of funds used for the capital investment in the United States. A successful EB-5 petitioner must be able to show that the “capital” used for investment in the U.S. is from lawful sources and can be legally traced. Pursuant to the Immigration and Nationality Act (INA or the Act) section 203(b)(5) and Title 8 of the Code of Federal Regulations (8 CFR) section 204.6(e), “capital” is defined as “cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. All capital shall be valued at fair market value in United States dollars. Assets acquired, directly or indirectly, by unlawful means (such as criminal activities) shall not be considered capital for the purposes of section 203(b)(5) of the Act.”

To show the lawfulness of the capital investment, investors must provide thorough financial information and documentation to USCIS, which varies on a case-by-case basis depending on the source of funds, but generally includes:

          1. five year personal bank statements,

          2. documentation concerning the actual source (gift, inheritance, bank loan, etc.),

          3. proof of ownership in any businesses and business licenses (if applicable),

          4. audited financial statements (if applicable),

          5. tax returns (if any), and

          6. salary certificates / bonus letters (if applicable).

You can read more about the source of funds requirements on our blog here. 

Role of The American Legal Center

Collaborating with experienced EB-5 advisors can streamline your EB-5 application process and enhance the likelihood of a successful outcome. We are U.S. licensed lawyers and professionals with over a decade of experience in the EB-5 industry and we are laser-focused on this specific government immigration program. We have assisted numerous individuals and families in achieving their U.S. immigration goals through the EB-5 program. We will serve as your active guides throughout your EB-5 process, from asking the right questions in choosing a regional center and project for your investment to collecting the necessary source of funds documentation for your application. If you are ready to commence your migration journey, contact us today for more information. We offer an initial complimentary consultation in our offices in Downtown Dubai.