As an investor looking to obtain a green card through the EB-5 program, it is crucial to carefully evaluate potential projects before investing. With the EB-5 program being redesigned and strict regulations in place, investors need to ensure the project they choose has strong fundamentals and a high probability of creating jobs. When deciding where to invest for EB-5, key factors to consider include the project’s location, business plan viability, developer experience, and projected job creation.
Target employment areas provide more flexibility
The EB-5 program now distinguishes between standard projects which require a $1.05 million investment and projects in rural or high unemployment areas that qualify for a lower $800,000 investment threshold. Targeted employment areas (TEAs) provide more flexibility for investors and enable the project to leverage the lower investment amount to create jobs. Quality TEA projects in opportunity zones or infrastructure developments can be attractive options.
Evaluate the credibility of the regional center
Most EB-5 investors invest through an approved regional center rather than directly into a new commercial enterprise. Perform due diligence to validate the regional center is in good standing and has a track record of past successful projects. Factors like the regional center’s history, management expertise, relationships and internal controls should be reviewed.
Ensure the business plan is realistic
The feasibility of the project’s business plan needs to be thoroughly evaluated before investing. Assess factors like the local market demand for the project, competition, cash flow projections, and breakeven analysis to determine if the project can realistically create the required jobs within the designated timeframe.
Select projects from experienced developers
The capability of the project developer is key – they are responsible for deploying the capital and executing on the business plan to create jobs. Projects sponsored by established developers with relevant industry experience, strong financials and a history of successful EB-5 funded projects substantially reduce risk.
Performing thorough due diligence before selecting an EB-5 project is essential for investors seeking to obtain US residency. Scrutinizing the project’s location, business merits, job creation plan, and team credentials can help identify quality investment opportunities with a higher probability of success.