How to mitigate risk when evaluating EB-5 investments?

How to mitigate risk when evaluating EB-5 investments?

2023/11/04 11:20am

How to mitigate risk when evaluating EB-5 investments?

By Marko Issever

Despite the EB-5 program’s popularity, many investors are concerned about the safety of their investments, especially in light of recent bank failures. Let’s examine the safety of EB-5 investments and explore ways investors can mitigate their risks.

EB-5 investors must be careful not to be lured away with promises of high yield and high returns while forgetting their most important criteria in project selection: job creation and return of capital.

With the passage of the RIA of 2022, there are two additional points worth considering when evaluating projects:

a) Adjudication of applications in the I-526 / I-526E and I-829 stages is historically the lowest it has been, creating unprecedented backlogs in processing. Therefore, investors should consider where they apply for the EB-5 project they select. If, at the time of filing, the investor is on US soil with a nonimmigrant visa, the RIA of 2022 also allows for the concurrent filing of I-526E (EB-5 petition) and I-485 (Application to Register Permanent Residence or Adjust Status), I-131, Application for Travel Document (Advance Parole/Travel Authorization) and I-765, Application for Employment Authorization (Employment Authorization Document - EAD). I-765 and I-131 get adjudicated much faster than the I-526E granting the investor most of the benefits of a green card in a fraction of the duration.

b) Investors born in retrogressed countries such as mainland China, India, and Vietnam should also consider selecting projects from one of the set-aside categories, such as Rural, TEA, or infrastructure, for eligibility of priority processing and retrogression considerations avoidance.

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