Along with having a good fall-back plan, your regional center should also be able to tell you what will happen to your investment if problems do arise (not only with the project, but also, more so, if problems arise with your immigration application).  This is critical information for you to know.  Too many investors have failed to ask this question.

Primarily what you want to know is whether or not your funds will be escrowed.  The next question that needs answering is what happens to those funds if your (I-526) petition for a green card is denied.  If USCIS (United States Citizenship & Immigration Service) does not approve your application and grant you a green card, will your funds be refunded to you?

This again may seem another question that should be simple enough to answer.  Most regional centers do engage in some process of escrowing funds and maintain a policy of refunding money for failed applications.  However, do not discount the value of your advisor in these matters.  Whether or not your money will be refunded is not a simple yes or no question.

Although most centers have a refund policy, it needs to be determined what the conditions are in regards to that—what are the terms under which you will qualify for a refund of your investment money (do not expect a regional center to want to part so easily with an investment of $500,000 to $1 million!—don’t take assurances at face value!).  You need to know the specific circumstances under which the center is willing to refund your investment in the case of visa denial; the typical regional center refund policy applies only if the visa petition is denied because of some problem with the center’s project.  It may not necessarily apply if the visa is denied due to an issue that the center considers to be the immigrant’s responsibility. 

For example, if  USCIS determines that the evidence supporting the legal source of obtaining your invested funds is insufficient, or if there are criminal convictions or other disqualifiers present, the center may deny the refund.  Every regional center has its own policy regarding the refunding of invested capital, and these policies can vary widely.  It is important to research the policies ahead of time and to compare and contrast between them.  An experienced advisor will be familiar with the various policies and be able to point out to you which areas and disqualifiers could be potential cause for concern.

Even assuming good due diligence in this respect, there are even more considerations, and more depths that your advisor will go to in order to help you understand exactly how safe your investment is in relation to visa approval, and what the real likelihood of a refund is.  There are two more major considerations, and more that your advisor will discuss with you.

The first of those two is the attitude of USCIS toward your refund agreement.  If your funds are guaranteed, will USCIS consider them to be at risk?  Will they qualify as an at-risk investment capable of qualifying for visa application and later approval?  Will those funds need to be released and so not be able to be subject to escrowing or refunding?  These are questions and answers that a third-party advisor will evaluate and help to answer for you.

USCIS aside, you also need to consider the safety and legality of the escrow fund that your money is being kept in.  If you do not use extreme caution at this point, you stand to lose all of your invested money.  Let your advisor do his or her job here, and make sure that this is a real escrow fund and that your rights and ownership are being protected.  Let them look further into the matter, and find out what the disposition of other funds has been—were the monies invested?  Were funds returned to investors?  Why?  How difficult was it for failed applicants to recoup their funds?

Clearly, the matter of safety of your investment is one that requires much care and research.  This is not just about good business planning; the safety of your investment is also about the center’s track record and good business practice.  It’s a level of evaluation that goes layers deep beyond the transparent, and one that you will surely want to know has been explored to all the possible depths of due diligence.

Next we’ll look at the potential return of your EB-5 investment. In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5