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Reasons for Doing Risk Analysis & Due Diligence on EB-5 Projects

The EB-5 Visa Program offers foreign nationals an opportunity to invest in U.S. commercial entities in exchange for permanent residency in the United States.  The program offers foreign investors two basic options: 

1. Invest $1 Mio. (or $500,000 in a Targeted Employment Area) and actively manage the enterprise and create the 10 jobs directly 

2. Invest $500,000 in a passive investment and allow the General Partners to control the expenditures and uses of capital to create the jobs and return the principal at term 

EB-5 Passive Investment 

Records show that the first path is seldom used (less than 5% of total EB-5 visa petitions) due to the difficulty or unwillingness for many foreign nationals to own and operate their own enterprise.  The vast majority of EB-5 applicants use the passive investment vehicle to gain their permanent residency.  The problem with this approach is that there is usually very little objective, independent verification of the claims made by the Regional Center developers to gauge the risks involved in achieving two objectives: 

1. A removal of conditions once the I-829 petition is filed

2. Return of the capital invested at term 

To compound the problem, many Regional Centers use unlicensed, unregistered persons to promote and sell these securities to investors.  These "finders", "consultants" and "EB-5 Experts" are paid large fees to deliver investors to the EB-5 Regional Centers often by misrepresenting the risks, capital structure, management experience of the developers and other material information needed to make an informed decision.  Since they are not registered with any governing securities regulatory authority such as the SEC or FINRA, they will make representations that may not be factual correct. 

Unfortunately this can also apply to attorneys who represent the Centers in their promotional activities and brings into question who they are representing, the foreign investor (their client) or the issuer?  It is difficult to see how the attorney representing the EB-5 Regional Center can be both impartial and free of conflict of interest when giving investment advice to their clients, especially when fees are paid to them by the Center. 

USAdvisors provides risk analysis and due diligence services to foreign national investors interested in applying for the EB-5 visa that wish to have an independent, objective analysis of the risks of each project done by a FINRA Registered Investment Advisory Firm.  We do not accept finder's fees from the Centers, our fees are paid directly by the investor to help them understand the true risks involved with the particular projects being offered in the market, as well as macro economic issues which could influence the developer's ability to create jobs within the timeline imposed by USCIS as well as repayment of principal. 

We can also assist U.S. developers, commercial enterprises, Economic Development Corporations and Public / Private partnerships to analyze their project offerings to help them structure their offerings and funding requirements using foreign direct investment (both EB-5 and non-EB-5).  

Our goal is to provide foreign investors, their attorneys and counselors, informed unbiased risk analysis and EB-5 project due diligence to help them make the best investment decision for them and their families.