How is Success Measured in an EB-5 Investment?
It seems strange to even have to pose this question as one would think that there would only be one measurement for success in such an important undertaking but that is not the case.
For nearly every single EB-5 investor we have encountered the measurement for success is simple. That measurement has always been get me my green card(s), my investment back and hopefully some return on investment over the period of investment. Remember, the immigrant investor is focused upon immigration and their financial investment into a New Commercial Enterprise. Therefore success is measured on how both aspects perform whereas for the USCIS and the EB-5 Program, the measurement for success for the EB-5 investor is different.
For nearly every single EB-5 investor we have encountered the measurement for success is simple. That measurement has always been get me my green card(s), my investment back and hopefully some return on investment over the period of investment.
One needs to separate what is required in order to qualify as an EB-5 investor/petitioner with the USCIS and then what the measurement for success is when the USCIS ultimately reviews the I-829 petition of each EB-5 petitioner. The I-829 is where permanent residence, not conditional permanent residence, is granted. Permanent residence is the ultimate goal so our focus needs to be upon that ultimate goal and not the conditional green card that comes earlier in the process.
What the USCIS will require in order to approve an I-829 petition seems quite simple:
- Evidence of Investment. The petition must be accompanied by evidence that the immigrant investor invested or was actively in the process of investing the requisite capital.
- Sustainment of the Investment. The immigrant investor must provide evidence that he or she sustained the investment throughout the period of his or her status as a conditional permanent resident of the United States. (There is much discussion today regarding the period of sustainment and how the Reform and Integrity Act, RIA, may change this period of sustainment. The USCIS has scheduled a stakeholders meeting for March of 2023 where this will be a focus of discussion.)
- Evidence of Job Creation. The immigrant investor can meet the job creation requirement by showing that at least 10 full-time positions for qualifying employees have been created, or will be created within a reasonable time. The non-regional center investor must show that the new commercial enterprise directly created these full-time positions for qualifying employees. The regional center investor may show that these jobs were directly or indirectly created by the new commercial enterprise.
There is nothing in those three requirements above that says the EB-5 petitioner must see a return (in whole or in part) of the funds they have invested. There is also nothing that says the EB-5 petitioner must have achieved a return on their investment throughout the period of investment. The EB-5 Program does require an investment into a “for profit” enterprise which is an eligibility requirement in order to obtain conditional permanent residence however achieving and maintaining a return on investment (ROI) throughout the period of investment is not a requirement for I-829 approval. What the USCIS will be looking for and what the EB-5 Program requires is that the EB-5 petitioner made the requisite amount of investment, that this investment was sustained for the proper period of time and that no fewer than 10 qualified jobs were created as a result of the EB-5 petitioner’s investment.
The EB-5 Program requirements actually parallel the ultimate goal of every EB-5 petitioner which is green card success. First, get me my green card(s). Next, the focus shifts to obtaining that return of capital and well behind both of these comes some sort of return on investment with the understanding that the “true ROI” is the greed card as no other investment in the world leads directly to US permanent residence.
So, if things are so simple why don’t things always work out? A great question and a great introduction into multiple topics associated to EB-5. Think about “structure” and “focus” and read along in one or more of our other musings as we lay out what we see as the most important aspects of any EB-5 investment. Additionally, feel free to contact us directly with any questions you may have. Our staff will be able to help you or to put you into direct contact with the parties that can.
Kraig Schwigen is a recognized industry expert in the EB-5 business with over a decade of experience. As the former Chief Operating Officer of one of the largest regional center groups in the industry, Kraig grew the company from 40 investors to over 5,400, representing over $2.7 billion in EB-5 investment capital raised.
Today, as a key member of the American Investment Migration (AIM) team, Kraig is dedicated to sharing his extensive experience and expertise to assist developers seeking EB-5 investment capital.