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Investing in the U.S. for an EB-5 Visa
The EB5 investor program allows foreign investors the chance to live and work in the U.S. in exchange for a substantial contribution in America’s economy. Some of the rules involved require the amount invested to meet minimum investment amounts and, if invested into a new venture, to create at least 10 jobs for U.S. workers or, if invested into an existing venture, to expand the business by at least 40%.
Getting a Guaranteed Investment
Unfortunately, in order to qualify for an EB-5 visa, foreign investors are not allowed to accept any form of guarantee that an contribution will be profitable. In other words, the investment must be “at risk”, or unguaranteed, for the time that it is invested into a qualifying U.S. based venture. If the expense were guaranteed, then it would be more of a loan, not a true investment.
After an expense is made, the foreign investor can be issued a conditional EB-5 visa, however, if the expense fails to create the necessary amount of jobs or, in the case of an contribution into an existing venture, fails to expand the business by 40%, the visa can be revoked. In other words, an expense must be provably profitable in order for an EB-5 visa to stay in effect.
What if an Investment is Lost?
If an expense is lost, there is no legal recourse for the investor. A lost contribution is a lost investment, which is why investors must understand the risks involved with making an contribution into a foreign venture.
Even if the party receiving the contribution makes a promise to repay an contribution if it is lost, the law will generally not step in to make the investor whole in the event that the contribution is actually lost.
What Does This Mean for Investors?
Foreign investors interested in investing in the U.S. economy must make absolutely sure that the venture into which they are investing is legitimate and has a high chance of success. Rushing into an investment just to become eligible for an EB5 visa can actually lead to the investor making a bad investment, or failing to see one of the risks involved with the investment. For the most hopeful results, foreign investors are urged to perform ample due diligence into a potential expense opportunity to ensure the contribution is as secure as possible.
How to Make a Strong Investment
The fact that an EB5 expense is at risk means that investors have a lot on the line if they make a bad investment. In terms of an EB5 investment, not only would the investor lose the cash that went into the investment, so too could the investor lose the opportunity to remain in the U.S. on an EB5 visa because, if an contribution fails, an investor’s conditional visa can be revoked.
An experienced immigration and EB-5 attorney can help the foreign investor ensure that an contribution is legitimate and can advise the investor on the precise risks involved with an investment.
