Undoubtedly, the US EB-5 Visa Program is currently one of the most popular and highly sought after type of investment immigration program in India and rest of the world. Through this program, interested applicants are given the opportunity to acquire permanent residency in the United States by investing as little as $500,000.
However, this opportunity doesn’t come without any risks. If not handled properly, these risks can affect a person’s entire application process. Not only that, their decision to invest under the EB-5 visa program may cost them a lot financially and mentally – therefore, turning their dream into a nightmare.
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Risk of Fraud
There’s what we call as the ‘Risk of Fraud’. In simple terms, this means investing in a scam or any fraudulent venture. EB-5 frauds can be complicated to tackle and harder to identify. Investing your hard-earned money in this kind of endeavor can result in the twin blows of bankruptcy and denial of the green card application.
This is due to the life-cycle of the EB-5 visa program which is spread over a period of 5-7 years. Depending on the stage of your application process, the nature of the risk of fraud may vary.
Do keep in mind that government regulatory agencies such as USCIS, FINRA and SEC are doing their best to protect all the applicants though not entirely. Therefore, it is the applicant’s full responsibility to stay vigilant and discerning. Obviously, it’s much better to prevent the EB-5 frauds from happening than to undergo the whole process of finding solutions on how to recover your money after your EB-5 visa application has been denied.
b. The Inherent Risk of Investment
One risk of the EB-5 visa program is called the ‘Inherent Risk’. This means failing to fulfill the requirements for the minimum jobs created during the mandated period. Unfortunately, if the applicant’s chosen EB-5 project failed to generate or even sustain 10 jobs for American citizens all throughout the five years’ time period, then the applicant’s green card petition will be rejected.
This kind of risk is inherent in any type of commercial investment. As the applicant, you can avoid this by asking the help of a reliable professional who will handle the whole application process smoothly. If you are serious about venturing into any kind of business endeavor, having a good business plan along with well-defined goals and objectives can help you to achieve all the requirements needed including the generation of jobs.
c. Government-Approved vs. Government-Regulated
Like all legal government transactions, the immigration agencies are trying their best to provide the applicants with business projects which are profitable and stable. The most common option for EB-5 visa program applicants is the investment opportunities provided in Regional Centers. It’s easy to think that every kind of project offered under this option would be subject to a regulatory framework which was established and governed by the U.S Citizenship and Immigration Services.
Unfortunately, applicants must know that investing in a Regional Center with a USCIS approval does not guarantee the safety of their investment. In this case, government approval doesn’t necessarily mean in any further government regulation or oversight.
Also, applicants must not assume that the Regional Center is in complete compliance with all the government regulations or has a good track record of success merely because it has a USCIS approval and is among the other 919 Regional Centers.
Knowing this information is important in avoiding the revocation of the applicant’s green card. This happens when there is a failure of the Regional Center within the next two years after the applicant has been issued with his or her conditional green card under the EB-5 visa program.
Moreover, the government maintains the right to withdraw the approval or revoke the certification granted to the Regional Center. When this happens, the applicant must work together with his or her chosen Regional Center to fulfill all the required rules and regulations all throughout the entire process of their EB-5 visa application.
Vetting the Regional Centers or Direct Investments
Applicants should know that vetting a Regional Center, its owners, administrators along with the entire management team, is completely under their own discretion. In order to avoid making any wrong decisions, working with a professional immigration expert is a must. Just make sure this person has broad knowledge and experience when it comes to choosing the right Regional Center and investment project. Coupled with the applicant’s due diligence, they can work together to find a credible, honest and the viable Regional Center and investment venture.
Firstly, make sure your agent or the lawyer appointed to represent you does not have any conflict of interest with the regional center. An example of a conflict of interest is when a firm representing the applicant has a commercial relationship with the very Regional Center it is supposed to vet and monitor.
Secondly, focus on knowing the beneficial owners of the Regional Center. Applicants must learn to investigate the person behind who is serving as the public face of the investment project. Also, check the individual reputation, credibility, as well as the background of each beneficial owner of the center. This information is vital in assessing and vetting a center.
In addition, there are also some cases where these centers would claim to have support or backing from prominent personalities which includes Governors and even previous Presidents, only to discover that no such endorsements have ever been given.
Another is where a Regional Center would claim to have all the necessary permits and documents to build a real estate project all because it has a permit to set up tent on a piece of land. This center will also mention about asking for funds from different EB-5 applicants.
Furthermore, there are cases where these centers would exaggerate information related to previous projects they’ve handled, including the size, scope and extent of success to make the applicants believe they are credible and outstanding. The only way to prevent becoming a victim of EB-5 frauds is to do your own investigation. Check out the solvency along with other information about past criminal proceedings. Plus, don’t forget to look at the previous track record of those who finalized and managed such projects.
As you can see, conducting intensive background checks on these Regional Centers is highly crucial in choosing what kind of investment project you’ll choose –whether it’s in real estate or a property development project to satisfy the investment and job-creation requirements under the EB-5 visa program.
Thirdly, verify all the credentials provided by these major individuals who are involved in the project. This includes background checks on their personal history.
Here are some things to consider when doing your own investigation:
- Look for any previous or current bankruptcies.
- Check for complaints regarding false claims.
- Are there any confirmation of claims regarding specialized expertise which is related to the industry?
- Verify the authenticity of the facts presented in the public domain.
Solution: Due Diligence
Instead of relying completely on the government or immigration authorities, applicants must have due diligence and take up the responsibility of making sure their investment is safe and stable.
Here is a list of things that applicants can do to help protect their green card dream:
- Make sure the investment has clearly-defined goals and methods on how to achieve them.
- Thoroughly check the project investment, including its viability and commercial as well as non-commercial objectives.
- Diligently examine the personal and professional background of all the principals involved in the investment project.
- Continuously monitor the process using modern investigative and auditing tools and applications. Also get sound advice from professionals.
Lastly, applicants must understand that due diligence is not a one-time thing. You, as the serious applicant, must commit to conducting continuous background checks and monitoring. Doing this will keep the applicant updated about the progress of the investment project as well as to any new development or even potential risk that may occur. Furthermore, it will also keep the applicants updated with the important people involved in this project.
An EB-5 visa application is made up of immigration petition and a significant amount of risk in investment. Remember that even the smallest problem in the application process can adversely impact your personal and financial goals. Therefore, you must learn to stay vigilant and practice due diligence. In addition, it’s best to work with trustworthy intermediaries and agents.
For more information, please contact EB5 BRICS.
