Choosing the right EB-5 investment project

Why your project choice matters

When applying for an EB-5 visa, your investment is not just a financial decision—it’s a step in your journey to U.S. permanent residence. Choosing the right project can speed up your application, while the wrong one can slow down or even risk your immigration process. 

What types of projects can you invest in?

The EB-5 project is versatile, and investors can invest in a wide range of projects. Projects must create at least 10 full-time U.S. jobs and meet some investment criteria. 

Some projects types include:

• Real Estate Development: Single family, multifamily, and mixed-use development projects in urban and rural communities.
• Healthcare Facilities: Hospitals, clinics, and retirement centers for growing communities.
• Infrastructure Projects: Transportation networks, roads, and utility development in high-growth regions.
• Technology & Innovation: Mature technology, biotechnology, renewable energy firms or technology.
• Hospitality and Tourism: Hotels, resorts, and entertainment centers in tourist spots.
• Manufacturing Facilities: Industrial parks that provide local employment.

Each option has a risk profile, job creation potential, and exit. Using a good regional center or attorney can assist in matching your investment with your long-term objectives.

How to identify project risks

Before investing money, consider the possible risks of any EB-5 investment. Keep in mind, the U.S. government demands that your capital be “at risk,” but not all risks are equal.

Here’s how to identify and examine typical red flags:

1. Collateral Security

What it means:

In the case of the EB-5 visa, collateral security consists of assets that can be pledged as security by the investor to access their investment in the EB-5 project. While most EB-5 investments never call for collateral, some projects ask for it in an attempt to minimize the financial risk to the investor. In the event that the project fails or cannot generate the required employment, the collateral can be used to recover part or all of the funds invested. 

Why it matters:

Practically, collateral security in an EB-5 investment is an insurance cover for the investor with a guarantee that serves as a fall-back if the project fails to achieve its funding objectives or requirements. 

2. Project Track Record

What it means:

This refers to the developer’s past performance. If they’ve completed other EB-5 projects successfully—on time, on budget, and with job creation—it’s a good sign.

Why it matters:

A solid history builds confidence that the current project will also be managed well and meet USCIS requirements, reducing your risk.

3. Job Creation Model

What it means:

EB-5 requires your investment to create at least 10 full-time employment positions. The project‘s economic report needs to be able to clearly show how and when employment will be created (e.g., construction, operations, etc.).

Why it matters:

If the job creation is not supported by facts, your immigration petition will be denied even if you have invested. 

4. Capital Stack Transparency

What it means:

This is concerning knowledge of how the entire project is funded—what proportion comes from EB-5 investors compared to loans, equity, or otherwise.

Why it matters:

A well-balanced capital stack suggests good health financially. If a project has too much of its funding come from EB-5, then it may be in danger if funding isn‘t entirely locked in.

5. Exit Strategy

What it means:

This is when and how you, the investor, will be returned for your funds—usually after a 5-7 year waiting period.

Why it matters:

A project that lacks any apparent plan to return you (e.g., sale, refinance) increases financial risk. USCIS does not require a return, but you do care!

6. TEA Status (Targeted Employment Area)

What it means

TEA status is for high-unemployment or rural areas. TEA projects qualify for the smaller investment threshold (currently $800,000 instead of $1.05 million).

Why it matters:

Choosing a TEA project will lower your minimum investment—but make sure the TEA designation is current and valid.

7. Independent Third-Party Audits

What it means:

This is whether third-party experts (who are not connected to the developer) have audited or reviewed the project‘s business plan or financials.

Why it matters:

Audits create transparency and accountability. Without audits, it is harder to believe the developer‘s claims.

8. Compliance with Regulations (EB-5 Reform and Integrity Act)

What it means:

The 2022 EB-5 Reform and Integrity Act placed new requirements for investor protections—e.g., transparency of funds, annual reporting, and agent disclosure.

Why it matters:

Compliance shows the project is up to date on the law. Non-compliance can result in project shutdowns or visa refusal.

Work with trusted experts

Managing EB-5 investments is complex, but you don’t have to do it by yourself. Dealing with experienced professionals—immigration attorneys, financial advisors, and registered regional centers—can make it a reassuring experience and reduce the possibility of costly mistakes.

Ready to invest in EB-5 wisely?

Whether you’re new to EB-5 or down to your last few project possibilities, we’re here to help. Call to schedule a consultation.