What is a Safe EB-5 Project? How to Pick the Right EB-5 Regional Center?

When the EB-5 Immigrant Investor program first started gaining popularity, it was quickly explored on a very superficial level. Projects initially thought that EB-5 money was easy to come by and that they would be able to fully fund large scale projects through EB-5. As EB-5 regional centers began popping up and project solicitation initiated, it soon became very clear that funding a project entirely through EB-5 would take a lot more specialization and hard work.

The first thing that projects must consider when attempting to raise funds through EB-5 is that the EB-5 Immigrant Investor program is a USCIS, and therefore, government, program. As such, the program is inherently slower in releasing funds than traditional funding sources. It is just as much the responsibility of the project to understand this as it is the EB-5 regional center’s to remind projects of this ‘delay’.

Another consideration before choosing an EB-5 regional center is their experience. How long have they been designated for operation by the USCIS? During that time, while factoring in the unavoidable lag time, what has the EB-5 regional center accomplished? Are they on their way to starting or completing EB-5 projects or have they been sitting idle?

A third question to ask about an EB-5 regional center is whether or not they have overseas contacts that can help them recruit investors. If they do not have the contacts, then how do they fund their EB-5 projects? Recruiting international investors is a challenging endeavor and EB-5 regional centers must be able to generate the funds—domestically or internationally—required for their projects.

Several EB-5 regional centers are currently experiencing challenges with their projects. Some are facing law suits while others are defaulting in their projects due to a lack of funds. These problems affect all parties involved. Projects, investors, regional centers, and communities suffer when an EB-5 project fails to follow through on its promises.

So, what can the involved parties do to protect themselves? Research.Do your own due diligence on the project, EB-5 regional center, and amount of community support. Is the project structured to meet the EB-5 requirements? How long has theEB-5 regional center been operating and how do they find their investors? Is the local community supportive of the project or will the project and EB-5 regional center face challenges as they start to get the project off the ground?

Remember, EB-5 is not easy money and the entire funding process takes a considerable amount of time. One should fully understand the EB-5 program before committing to it so as to avoid ending up in the place of one of the EB-5 regional centers currently experiencing difficulties. There are roughly 200 EB-5 regional centers designated throughout the United States. Choose wisely.