The EB-5 Immigrant Investor Program provides a pathway for foreign investors to obtain a green card by investing in job-creating projects in the United States. One of the fundamental aspects of this program is the ‘at-risk’ requirement, which determines an investment’s eligibility.
USCIS requires that the investor’s capital be at at-risk throughout the investment period, which means the investor’s capital must be open to the potential for gain or loss based on the success or failure of the investment project. Thus, an investor cannot be guaranteed a return on his investment.
To fulfill the at-risk requirement, the investor will invest in a New Commercial Enterprise (NCE), which subsequently provides the funds to a Job Creating Enterprise (JCE) through either an investment or loan. The JCE is the entity that directly creates the required permanent jobs using the capital provided by the NCE and engages in business activities that will stimulate local economies. Nonetheless, there is a possibility of the investor losing their capital if the business fails.
If a business supported by an EB-5 investment fails, it does not automatically mean that the investor will lose their chance of obtaining a permanent green card. The initial green card issued is conditional and valid for two years upon approval of an I-526 or I-526E petition. To remove the conditions and obtain permanent residency, the investor must demonstrate that their investment has created at least ten full-time permanent jobs. Even if the business fails, investors may still be able to meet this job creation requirement if the jobs were created during the conditional green card period and continue to exist at the time of filing to remove conditions.
At-risk investments, however, do not equate to high risk. Foreign investors should carefully evaluate investment projects and conduct thorough due diligence before committing to an EB-5 investment. It is crucial to understand the potential risks and rewards associated with a project to make informed decisions about where to invest.
If you have any questions regarding the EB-5 process, please email us at rpatel@patellegal.com and jtrevino@patellegal.com.