Combination of two complex transactions—foreign immigration and foreign investment—the success or failure of an EB 5 petition five or six years in the future often depends on the quality of due diligence done today. The due diligence process covers three important aspects of the EB5 investment.

1.  Project Due Diligence

The future of an EB-5 visa application depends on the success or failure of the project the applicant invested in. Hence, project due diligence is extremely important for all applicants and must cover:

  • The project’s commercial feasibility
  • The business model along with job creation strategy
  • Project construction and completion timelines
  • Expenditure and revenue projections
  • Veracity of job-creation forecasts
  • Funding involved from all sources
  • Experience in EB-5 projects

Since the eligibility requirements must be fulfilled throughout the application process, due diligence must cover the project’s job-creation capabilities as per the minimum requirement, alternatively, provide for redeployment of the funds into another project is the immigration cycle exceeds the investment cycle.

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2. Regional Center Due Diligence

Currently there are more than 1200 EB-5 regional centers, active and non active in the USA and the USICS Clearly mentions that at any point in time an EB 5 investment is an at risky investment and USICS does not take any guarantees. Hence effective due diligence is important.

The vetting process starts with verification of the authenticity of the Regional Center along with the credentials and past record of its promoters. Other important factors to consider include the past record of the RC including number of projects in the past, success rate of I-526 and I-829 petitions, and details of pending and resolved complaints if any.

Since the EB5 investment is treated as private placement of securities, taking support of the services of a professional financial advisor may result in more effective due diligence.

3. Immigration Due Diligence

While project and RC due diligence cover the investment aspect of the EB-5 application, immigration’s due diligence should not be neglected.

Immigration due diligence should cover points like:

  • Understanding risk of retrogression, processing timelines, risk of children aging out etc.
  • Documenting proof of lawful source of your capital.
  • Preparing all necessary documents and completing all formalities like filing the application.

A few points to consider:

  • Considering the differences in regulatory and business environment in the two countries, Dubai nationals may benefit by choosing the Regional Center route to the EB 5 visa.
  • An immigration-and-investment professional with a complete understanding of regulations in both countries would be the ideal choice for Dubai investors seeking comprehensive and reliable EB5 due diligence.
  • Investors from Dubai must ensure immigration due diligence covers potential regulatory changes—positive as well as negative.
  • Applicants intending to reside in Dubai until approval of the I-526 petition must ensure due diligence covers ongoing assessment of the project’s performance and timely corrective measures, if necessary.
  • Due diligence must also assess potential complications arising out of ongoing and potential political, diplomatic, and security disputes between Dubai and the USA.
  • A significant challenge for EB-5 applicants from Dubai may be a significant gap between on-paper and real valuation of assets like real estate and properties.
  • Citizens of Dubai will have to apply for the B1/B2 visitor visa to visit the US as a part of the due diligence process.

Having a single professional who is a financial/investment expert as well as an immigration lawyer carry out due diligence would be ideal since the financial, investment, and immigration aspects of the application will be analyzed and assessed simultaneously.

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