🎙️ Returning your EB-5 investment in the US: Risks nobody tells you about

Today, KeyApply wants to talk about a topic that 99% of investors seeking US residency are interested in, but only 1% truly understand – namely: EB-5 investment returns and the risks that nobody tells you about.

Many people think: invest $800,000, and after a few years, you'll have both a green card and your money back. But is it really that simple? Is a return on investment guaranteed? Who decides when you'll get your money back? And more importantly – what are the potential risks that most advisors will never mention?

Over the past 10 years, we've encountered hundreds of EB5 applications. Some have been successful very quickly, while others have had to wait 8 years without receiving their principal. And the reason for this difference lies in the very things I'm about to share today.

🇺🇸 WHAT IS EB-5? HOW DOES IT WORK?

EB-5 stands for Employment-Based Fifth Preference - a US investment-based immigration program established by the US Congress in 1990.

🎯 Objective:

• Attracting foreign investment.
• Create jobs for U.S. citizens and permanent residents.
• Developing the local economy, especially in rural areas or those with high unemployment rates.

💰 Basic requirements:

• A minimum investment of $800,000 is required if residing in a "Targeted Employment Area" (TEA - rural or high unemployment). If outside this area, the investment must be $1,050,000.
• The investment must be "at risk" - it must involve real risk.
• We must create at least 10 full-time jobs for Americans within two years.

🏢 Two main models:

1. Direct Investment (Direct EB-5): The investor establishes a business in the US, operates it, and is responsible for creating jobs. This model is suitable for individuals with business and management experience.

2. Indirect investment through Regional Centers: Investors contribute capital to existing projects managed by the regional center (accounting for 95% of EB-5 applications currently). This model does not require management; it only requires proof of genuine investment and that the project creates sufficient jobs.

📈 Process Summary:

1. File Form I-526 (investment and conditional green card application).
2. Receive a 2-year conditional green card.
3. Once the project has created enough jobs, file the I-829 to remove the conditions.
4. Obtain a permanent green card and potentially recoup your investment.
   

💵 WHAT IS RETURN OF CAPITAL IN EB-5?

🧭 Concept:

"Returning the investment" means the project returns your initial investment after you have fulfilled your obligations under EB-5 law.

For example: You invest $800,000 in an energy or real estate project. After a few years, when the project creates enough jobs, you are allowed to receive your original $800,000 – and possibly a small profit.

However:

USCIS (U.S. Immigration and Citizenship Services) has very clear regulations:

• EB-5 investments must be "at risk"—meaning they have the potential to generate profit or loss, and cannot guarantee a return on investment.
• If a project states that “we commit to returning the capital after 5 years,” that violates regulations, and the application may be rejected or withdrawn.

⚠️ Why?

If there is a “guarantee of return,” USCIS considers it a loan, not a venture investment, and the goal of “creating real jobs” will not be recognized.

⚖️ NEW LAW 2022 - CHANGES TO THE DURATION OF "AT RISK"

Previously, investors had to hold their money "at risk" until they obtained permanent residency – which typically took 5–7 years or more.

The EB-5 Reform and Integrity Act of 2022, effective March 15, 2022, significantly shortened the timeframe: Investors only need to maintain "at-risk" capital for a minimum of two years from the date of full disbursement into the business.

In other words:

• You no longer have to wait until your I-829 is approved to get your funds back.
• After two years, if the project creates enough jobs, the business can legally repay the capital.

💡 Example: You invest on January 1, 2024, and the project is disbursed on March 1, 2024. By March 1, 2026, you will have fulfilled your “at risk” obligations and may be eligible for a refund, provided the project meets the employment requirements.

This is a major turning point, benefiting investors:

• Reduce the time capital is tied up.
• Increase flexibility.
• Improve your financial management skills.

🏢 TYPES OF EB-5 BUSINESSES

EB-5 Investment Industry	Risk level (1–10)	Main features	Note
Oil and gas	⭐ 3/10 (Lowest rating)	Real cash flow, real assets, independent of the domestic market.	Geological risks are controlled; payback period is 3-4 years.
Technology / Healthcare / Education	4/10	Long-term, stable growth model	Few projects, complicated procedures.
Agriculture / Production	5/10	Stability, direct job creation.	Seasonal and supply-dependent
Renewable energy / Green infrastructure	6/10	Safe in the long term, but low returns.	Policy dependence
Real estate (apartments, hotels)	7/10	Common, easy to prove employment	Market risk, credit risk
Tourism / Resort / Services	🔺 8/10 (High)	Sensitive to the economy and epidemics.	COVID-19 has caused many projects to go bankrupt.

🗺️ INVESTMENT AREA & PROCESSING SPEED

USCIS prioritizes expedited processing for projects in the following areas:

1. Rural Area
→ The project's investment capital has been reduced to $800,000.
→ Applications are processed faster because it contributes to the development of remote areas.

2. High Unemployment Area
→ It also receives low investment and creates many jobs.

3. Infrastructure Project
→ Government-backed, low risk, easy to prove employment.

🟢 Many EB5 Energy (oil and gas) projects are located in rural areas, allowing for reduced capital requirements and faster approval. However, the situation is completely different for "non-productive" projects such as housing, tourism, hotels, and restaurants. Here are some issues to consider for these projects:

• Output problem: Are there enough actual customers to sustain revenue?
• Limited market: sparsely populated areas with limited transportation lack a stable flow of customers, resulting in insufficient revenue to repay debts or recoup investments.
• Risk of delays: Due to its remote location, construction costs, material transportation, and labor costs are higher than anticipated, leading to project delays and impacting the time frame for job creation – and jobs are a mandatory condition for removing the conditions on a green card (I-829).
• Difficulty in exiting capital (Weak Exit Strategy): After completion, if there are no buyers or refinancing is not possible, EB-5 investors will have their capital trapped and unable to withdraw it even though the project remains stalled.

⛽ SO WHAT KIND OF PROJECT IS THE SAFEST RIGHT NOW?

1. Real cash flow: the product has a wide market, even selling globally.
2. The project requires collateral, machinery, a genuine mining contract, etc. What percentage of the funding will come from bank loans?
3. Not dependent on the local market, no worries about sales outlets.
4. Create real jobs
5. Located within a rural TEA (Targeted Employment Area) – prioritized for expedited approval and low investment.

🟢 Low-risk models may have the fastest return on investment (3–4 years).

🏁 CONCLUSION

When you invest in EB-5, you're buying a path to immigration, but don't let that journey turn into a path to total loss.

Please understand this clearly:

• The EB-5 program does not allow for a commitment to return the invested capital.
• A return on investment can only be legally achieved after maintaining the 'at risk' status for two years.
• And only projects with real cash flow, real products, and real jobs are truly trustworthy.

How to evaluate a project:

1. Request that the project provide transparent financial statements and an economic report.
2. Check the capital structure: What percentage of the total capital is accounted for by the EB-5 program? What percentage is equity capital? What percentage is debt capital?
3. Ask clearly: What is the "Exit strategy" - the plan for recouping the investment, and from which cash flow will it be generated?
4. And finally: choose a partner with professional ethics and practical experience.

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