Foreign investors in U.S.-based projects have two basic goals when using the EB-5 program to enter the country: to eventually obtain a permanent visa and receive a return of their investment capital. When executed successfully, an EB-5 project is a win-win-win for the community, the project sponsor, and the investor because the program mandates that the project create jobs, facilitates a lower cost of capital, and results in the investor receiving both a visa and their return of capital.

However, investors have a very large number of project choices and are highly selective on where to place their capital. Project sponsors should keep this in mind while preparing to seek capital and consider that these traits increase a project’s appeal to investors:

1. Successful Track Record. Investors look for experienced teams at all levels, including the Regional Center, developer, operator, and fund administrator.   Every participant in the project should be well described for both the historical record and role in the project.

2. Project Clarity. Investors seek a concise understanding of the project scope, timeline, job creation strategy, and exit strategy. Lack of clarity in any of these areas can eliminate a project from investment contention.

3. Strong Governance over Investor Capital. The typical EB-5 life cycle is about five years. During this time, capital flows through several different bank accounts. Ideally, the project sponsor utilizes auditable systems for tracking at the “sub-account/investor” level and restrictions on use of capital.   For example, the use of an independent third party fund administrator is optional but instills confidence that the project team doesn’t have ungoverned access to capital. Likewise, best practices around escrow, settlement accounts, and money movement is highly recommended to assure investors in this area.

4. Transparency via a Secure Investor Portal. Investors or their immigration attorney will want to review periodic investor statements over the five years – ideally created by an independent third party who validates the location of the capital. Secure investor portals should also offer proof that the project is using the capital as intended, and project goals related to job creation and timeline are being met.

5. Regulatory Compliance. Project sponsors have multiple masters during the EB-5 project life cycle, including banks, investors, and regulating bodies such as the SEC, FINRA, and the USCIS. Investors want to understand how exactly the project team is equipped to be in compliance with all documentation requirements related to each body, especially those of the USCIS who will eventually adjudicate the release of temporary visa conditions. Project sponsors should seek technology platforms purpose-built for EB-5 to assure the investors – and avoid costly regulatory challenges down the road.

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