Questions to Ask All EB-5 Regional Centers
Below is a list of questions we believe all prospective EB-5 Investors should ask of all EB-5 Regional Centers
- Has the USCIS ever issued an I-526 approval notice on any project of the Regional Center?
- Has the USCIS ever issued an I-829 approval notice on any project of the Regional Center?
- Are all documents in place for the current EB-5 partnership? (Insist on seeing the actual commitment documents).
- How do I get out of the new commercial enterprise?
- What do I have to sell, if anything, and to whom?
- If so, who is the most likely buyer?
- What can I expect as a buyout?
- What is ‘fair market value?’
Safety and Security:
- What types of risks exist for the funds placed in the new commercial enterprise and what protections are in place to mitigate those risks?
- Are there participants in the new commercial enterprise not seeking an immigration benefit in the partnership? If so, what problems might that cause?
- If the new commercial enterprise is offered a collateral position, where does the new commercial enterprise stand in the hierarchy of who gets paid first, what type of collateral is the new commercial enterprise receiving, what recourse does the new commercial enterprise have in default?
Transparency in Finances:
- Is each EB-5 participant allowed to see the financial records of the new commercial enterprise and the target investment?
- What are the expenses of the EB-5 new commercial enterprise?
- Are there any restrictions on expenses?
- How or when might I be expected to place more funds in the new commercial enterprise beyond my initial funds contribution?
Job Creation Proof:
- What method of proof of job creation is submitted with the initial petition (I-526)?
- Are the claimed jobs direct or indirect jobs, or a combination of both?
- What assurances are provided at the time of the I-526 petition that the requisite jobs will be there to support the I-829 petition adjudication?
- If direct jobs are being claimed, is there a risk that the business enterprise will create fewer direct jobs than projected?
- The burden of proof for job creation at the I-829 level for non-model-derived direct jobs requires I-9′s, W-2′s, and citizenship papers. How is the Regional Center prepared to deal with this?
- How is the job creation allocated to the EB-5 participants?
- If the projected job creation is not met, is there a chance that some participants seeking the immigration benefit may fail to show proof of the required 10 new American jobs?
- Is there a disadvantage or cause for concern for those EB-5 participants who join in the latter part of the project?
- Worst case scenario – If this project fails (bankruptcy or other), what happens to the job creation?
- Who manages the project and the new commercial enterprise and what are their qualifications?
- What are the management fees?
- Are the fees paid regardless of income or the success of the business enterprise, or are they reduced as income decreases?
- What are the projected total expenses?
- How are the EB-5 participants protected from the extensive expense allocation?
- Profit projections are based upon what? Real estate value increases?
- What other market forces could reduce the value of the funds placed in the new commercial enterprise?
- In most cases, you will be in a minority position. How might you exit the new commercial enterprise?
- What are the various sources of funding for repayment of the funds placed in the new commercial enterprise?
- If all EB-5 participants or limited partners want out in a relatively short period of time (many Regional Centers claim a five year investment) who is the likely candidate to buy out all the limited partners or EB-5 participants in another form of new commercial enterprise if not a limited partnership?
- At what price?
- How is the price determined?