At a JTC webinar, a group of experts talked about how EB-5 investors need to understand the difference between immigration and investment due diligence when deciding on an investment project.
As they embark on a process that will hopefully result in permanent U.S. residency, EB-5 investors participating in the Regional Center Program must select a Regional Center and an investment project. They must invest a minimum of $800,000 ($1,050,000 for unreserved categories) that is put at risk for at least two years and used to create at least 10 jobs.
EB-5 applicants want to protect their invested funds by choosing a financially viable project. They also need to fulfill the requirements to get their green cards. Is it possible to have both? How does one weigh these two elements and their relative importance when deciding on a project? To find out, we turned to a group of seasoned EB-5 experts who have seen many investors go through the process and know how difficult these decisions can be.
The complexities of EB-5 project due diligence
In January, 2025, JTC and CanAm Enterprises hosted an online event featuring a diverse group of EB-5 stakeholders, all of whom were contributors to our white paper, EB-5 Investor Due Diligence: Finding the Right Project for Immigration Success. Both the white paper and the webinar focused on the intricacies of selecting an EB-5 Regional Center and investment project.
“Picking a good project is the most important aspect of EB-5,” said Joey Barnett, Partner at WR Immigration. “There’s the immigration due diligence and then there’s the investment due diligence.” How important each of those two elements is can depend on the investor.
“To many immigrant investors, it’s a green card program,” said Barnett. “It’s the way for you and your family to remain in the United States forever, but it’s also a job creation program and an investment program, and so all of those have to be worked through when you’re making your decision.”
Investors should not forget that even though their main reason for pursuing EB-5 may be immigration-related, that doesn’t mean they shouldn’t pay attention to a project’s financials.
“Something I say to all immigrant investors is that there’s no requirement to get your money back in EB-5,” said Barnett. “It is possible for you to get your full immigration benefit, but not get your money.”
“As far as the immigration service is concerned, they don’t have a rule that you need to get your money back or how profitable it needs to be,” agreed Suzanne Lazicki, President of Lucid Professional Writing. “You need to have a real investment that has to create jobs. And so you want to think separately, is this a real investment? Is this really going to create jobs? And then on the other side, does this project have the stability and the potential that I can anticipate an exit strategy that is going to work for me on the investment side?”
Determining what matters most to you is the first step toward figuring out the level of risk you’re willing to accept and the things you’re looking for from your Regional Center.
“What is your goal for being in the United States? What are your plans?” said Christine Chen, Chief Operating Officer at CanAm Enterprises and moderator for the event. “There’s quite a lot of things to juggle to kind of get that perfect recipe for an EB-5 investment.
Job creation and the immigration component of EB-5 due diligence
Before a project can accept EB-5 capital, it must file form I-956F and have it approved by U.S. Citizenship and Immigration Services (USCIS). Several panelists were quick to point out that investors shouldn’t make an approved I-956F the only thing they look for.
“An I-956F is great, but it shouldn’t be at the expense of structure and the viability of the project,” said Irina Rostova, Founding Partner at EB-5 Support.
“It means a lot of things, but it also doesn’t mean anything in terms of job creation,” said Barnett. “You still need the track record of the developer to have some peace of mind that the business plan is going to be carried out”
The three crucial elements for investors are, 1) the investment must be put at risk, 2) the investment must be sustained for at least two years from the time the capital is made available to the job-creating entity (JCE), and 3) the investment must be used to create at least ten jobs.
While investors may be eager to get their money back, the panel explained that good EB-5 projects often take longer than two years.
“You need to wait at least long enough to satisfy your immigration requirements, and then for as long as it takes for the issuer in your project to be practically able to deliver an exit strategy,” said Lazicki. “In practice, most investors will be sustaining their investment for considerably longer than two years.”
As Lazicki explained, job creation for Regional Center projects is calculated “based on development expenditures, particularly construction expenditures, and then operating revenue.” The faster the project can reach those spending thresholds, the more confident investors can be that they’ve got the job creation requirement taken care of.
“The program is all about jobs,” said Walter S. Gindin, General Counsel, CanAm Enterprises. “Spending has to occur in order for the jobs to be created.”
“I like projects where they’re going to be spending the money this year,” said Barnett. “Hopefully there’s enough jobs created already so that you can have peace of mind for the rest of your EB-5 process.”
“You don’t want the project to be completed too far in advance,” said Sebastian Stubbe, Managing Director & CEO of Pine State Regional Center. “There needs to still be a direct nexus between your capital and the project’s job creation.”
One way to know if your investment has been used to create the requisite jobs is by selecting a project that provides this information to investors throughout the project life cycle. As a third-party fund administrator, JTC gives EB-5 investors 24/7 access to project information so investors will know when they’ve reached the job creation threshold.
Profitability and the investment component of an EB-5 project
One point the panel stressed is that just because you’ve invested your capital for two years and created at least ten jobs, that doesn’t mean you’re definitely getting your money back.
“This is not, ‘I put my money down for two years, I get my green card,’” said Lazicki. “You’re putting your money into a real investment.”
Investors will find a wide range when it comes to the projected returns offered by EB-5 projects. As with most investing, the higher the potential gain, the higher the risk.
According to Chen, for safe EB-5 projects, “the return is logically going to be low” because the risk is lower. If EB-5 investors value meeting immigration requirements and the preservation of capital over returns, they should look to projects that are more likely to deliver those things, even if other projects promise higher returns.
“Look for realistic returns,” said Stubbe, who cautioned investors not to be “enchanted by the promise of way above market returns. High returns typically indicate hidden risks or challenges in raising sufficient capital.”
Stubbe highlighted some of the things investors can look for to avoid situations where their capital isn’t deployed right away, such as seeking projects that are close to being fully financed, those where developers have “skin in the game,” and, whenever possible, “projects where construction has already begun.” Understanding who else is invested in the project can help investors gauge whether this is the right choice for their goals.
The most important questions to ask during project due diligence
The panelists talked about the questions they often hear from investors, as well as the questions they wish those investors would ask instead.
“Sometimes where they’re focusing their attention is not necessarily where I believe they should be focusing their attention,” said Rostova, who added that “a lot of investors will ask for projects in specific states or specific cities.” She said she finds this line of inquiry to be “irrelevant, because we want your project to be in the best location for the type of project and its viability. “
Barnett listed some questions that can elicit hints as to how shovel-ready the project really is, like “Do you have the permits to build?”, “Do you have a contract with the general contractor?”, and “What is the construction schedule?”
Stubbe encouraged investors to ask about the Regional Center’s experience. “Do they have a history of quality projects?” He also stressed the importance of looking at the Regional Center’s service providers.
“You want a Regional Center that, in turn, is working with best of breed service providers, meaning top-notch immigration counsel, securities counsel, economists, fund administrator, etc.”
The EB-5 Reform and Integrity Act of 2022 (RIA) requires a third-party fund administrator to provide additional oversight. However, some projects get around this requirement by obtaining a waiver or going with a cheaper bare-bones solution. Investors should watch out for projects that aren’t putting proper guardrails in place.
“Typical private equity fund administrators might not have the technology or the knowledge of the immigration components they need to be keeping in those books,” said Jill Jones, Head of Specialty Fund Administration & General Counsel, USA, for JTC. “Make sure that you’re choosing someone who’s experienced, and they know what to look for.”
Rostova said that in her experience, “most investors don’t quite understand the difference between the Regional Center, the NCE, and the, JCE.” She said investors should be asking about “Regional Center experience and oversight, separate from the developer experience,” because “those are two very different things.”
Feeling confident in your choice
Ultimately, the amount of risk you’re willing to tolerate and the type of project you feel most secure investing in are decisions left up to each investor.
“Not every project is a good fit for every investor,” said Stubbe. “Investors may have different investment goals, different risk tolerances.”
“If their numbeone objective is they just want the green card, then they’re really going to focus on the job creation, because that is the bottom line for the green card,” said Lazicki, “even if it’s a project that looks like it’s maybe not going to be very profitable.”
Ultimately, the panelists recognized that EB-5 investors have major decisions ahead of them, and they can use all the help they can get.
“It’s a level of due diligence that will probably drive someone crazy, because it’s so specific to each project,” said Chen.
That’s why JTC and CanAm Enterprises produced our white paper, EB-5 Investor Due Diligence: Finding the Right Project for Immigration Success. As Chen put it, the white paper is all about “what it means to do EB-5 due diligence at the level that our investors are doing.”
Barnett called the white paper “an amazing resource,” adding, “I send it out to everybody because it really does do a great job of giving context to the discussions that I have with EB-5 investors every single day.”
“We are all really committed to providing investors with the kind of information they need to make sound decisions,” said Chen, “and we really are hopeful that this discussion today will shed light on key considerations when evaluating an EB-5 investment opportunity.”
