Post Capital Raise: Ensuring EB-5 Investor Satisfaction

Once EB-5 capital is raised in totality and deployed to the project, it is important that expenditures, finances, and job creation are meticulously documented to ensure investors have the proper documentation needed for a successful immigration petition. Assisting investors with their visa petitions this way will allow you to keep a positive relationship with your investors and maintain a clean record with U.S. Citizenship and Immigration Services (USCIS) for future raises. Communicating and coordinating with investors, developers, lawyers, accountants, and other stakeholders involved in the EB-5 process is also a crucial part of maintaining the investments after raising capital.

Keeping Investors in the Loop

Giving regular project updates to investors is key to keep current investors informed of what is happening with their investment and maintaining a trustworthy track record in the EB-5 industry. Issuers should communicate with their investors through various channels, such as regular reports and newsletters providing insight on the EB-5 project’s development. There are established online platforms that allow investors to access their account information, documents and current status of their investment funds. K-1s and other tax documents should be issued annually for all investors, regardless of their U.S. tax liabilities.

Open channels of communication with investors to address questions and concerns can help alleviate anxiety regarding project progress. Remember that most investors conduct their due diligence through other investors before proceeding with an investment, therefore assured investors can be a strong generator of word-of-mouth sales for future offerings. 

Reporting to USCIS

Investment issuers (usually the regional center) must provide regular reports and audits to USCIS on the progress of the project’s development. Every quarter, USCIS will ask for a report of the RC’s economic activity, as well as records on:

• Investor involvement in project activity
• Demographic profile of investors
• Reports of the RC’s immigration approval/denial rate
• Third-parties involved in the sale or marketing process
• Administrative payrolls and responsibilities
• Job creation and subsequent economic impact reports
• Business revenue reports
• Due diligence screenings of investors and associates for accreditation and “bad actors”
• Project Sponsor’s efforts to oversee the commercial enterprise
• All other projects overseen by the RC and their expenses
• And more

Obligation to Investors

Investors in the EB-5 program undergo a barrage of immigration and investment paperwork to prove their eligibility and compliance with the regulations surrounding the EB-5 program. It is worth it for developers and investment issuers to remember that assisting investors with their EB-5 process not only makes your management team seem more trustworthy, but also benefits the reputation and status of the investment issuer.

Issuers would do well to remember that foreign investors who participate in the program have a considerable amount of paperwork and administrative processes that they are required to go through. The immigration process for EB-5 investors is a two part process. After subscribing to an offering or investing capital into a business or project, the investor will file an I-526E petition with USCIS. The petition goes into a queue and is eventually processed by USCIS before the investor will be eligible for a visa. Following the approval of their adjustment of status or consular processing, investors apply for and are issued a conditional green card. After two years, investors can apply for a permanent green card by submitting an I-829 petition. It is at this point that all evidence must be submitted by the investor to show that their capital remained at risk and deployed and that the minimum jobs were created by the job creating entity. Once the I-829 is approved, the investor receives their permanent green card.

Repayment of capital is of the utmost importance to EB-5 investors. Delays on returns and/or deducting project expenses from the returns are unfavorable terms that immigrant investors do not take lightly.

For a complete breakdown of the immigration process for the investor review our complete guide on the EB-5 immigration and investment process for investors.