June 16, 2017, Washington, DC, Adhikari Law PLLC. The Immigrant Investor Program, also known as the EB-5 program, allows certain foreign investors who can demonstrate that their investments are creating jobs in the United States to obtain lawful permanent residency. Business owners apply to United States Citizenship and Immigration Services (USCIS) to be designated as “regional centers” for the EB-5 program, offering opportunities that a foreign investor can invest in to apply for conditional lawful permanent residency. Toward the end of the two-year period of conditional residency, the foreign investor can show that the job creation requirements have been met to have the conditions on their lawful permanent residency removed. The EB-5 program is not, however, guaranteed to result in a visa or lawful permanent residency in the United States. It only allows one to apply.
It is important to note that just because a business is designated as a regional center by USCIS, does not mean that any government agency has approved or verified the quality of the investments offered by the business. Some regional centers have been caught defrauding foreign investors, putting not only money at risk, but also the investors’ chances of obtaining lawful permanent residency.
As with any investment, investors in an EB-5 program should thoroughly research the program before investing. Possible avenues of research include:
- Confirming that USCIS has, in fact, designated the target investment as a regional center;
- Obtaining copies of documents provided to USCIS, such as application forms and yearly informational supplements;
- Requesting investment information in writing, so the investment can be examined carefully;
- Asking if supposedly unaffiliated promoters (such as consultants, lawyers, and other agencies that recommend the investment) what benefits they expect to receive for recommending the investment;
- Seeking independent verification of investment claims, such as checking county records to see whether local permits and tax assessments correspond with regional centers’ claims; and
- Examining financial documents, such as loan documents.
Investors should also look for other warning signs of fraud, such as:
- Principals and developers who are not investing their own money in the EB-5 project;
- Promises of a visa, guaranteed investment returns, or promises of no investment risk;
- Overly consistent high investment returns, especially if they continue regardless of market conditions;
- Investments that are not registered with the SEC or any state regulator;
- Investment professionals who are not licensed as required by Federal and state securities laws; and
- Investments structured through layers of different companies that are managed by the same individuals. Investors should, at least, confirm that conflicts of interest have been fully disclosed and are minimized.
Permits, licenses, and registrations are not part of the regional center approval process, but must be completed in addition. Thus, foreign investors must be careful when investing in an EB-5 program. If an investor’s investment through EB-5 turns out to be in a fraudulent securities offering, the investor may lose both his money and his path to lawful permanent residency in the United States.
For assistance in vetting an EB-5 offering before investing your money and your hope of becoming a lawful permanent resident of the United States in a project, please contact our firm at (+1) 888 820 4430 (toll free), or email us at email@example.com
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