Don't overlook the important issues in EB-5 selection

I am continuing yesterday’s blog from a freezing cold and snowed-in Gatwick airport, London, where I have spent the last 24 hours waiting for the airport to clear a few inches of snow. It never ceases to amaze me when traveling all over the world, including countries where there is an awful lot of snow, such as Canada, Russia, Austria, Germany, to name but a few, that in the UK it only takes a little snowfall to close one of the world’s major airports! To make matters even worse, to rebook the flight you are put into a four hour line, longer than any of the ones you may go encounter for a ride in Disneyland, this would never happen in the USA, anyway enough about my rant for the day!

Yesterday we covered areas that are all too often overlooked by those considering the EB-5 visa, particularly when identifying issues that are very important leading up to the removal of conditions and the exit strategy for the eventual return of the $500,000 investment.

Today we will look at the implication regarding the 10 jobs per investor that will need to be created. Many programs refer to these jobs and refer to an economic model that will lay out how they will be created. However, there are other implications to these jobs which are very important but all too often not discussed.

Let us say you are investing in a program that is investing funds in a portfolio of different investments. For example a hotel, office building, medical center etc. Although the economic model  they use to determine jobs may be sufficient to obtain successful approval at I-526 stage, what happens in two years when conditions are due to be removed?  Will the projects be completed?  Will sufficient tenants be found?  Will those tenants provide sufficient proof of jobs to satisfy USCIS?  There are a lot of questions that need answering and your continued stay in the USA may depend on those answers.

Taking a completely different scenario; what happens in a project which is in a particularly disadvantaged area? Let us say it actually does create the jobs required, however, the exit strategy to obtain the return of your investment requires the eventual sale of you and your fellow investors shares in the project. Will the project sell, if the area surrounding it remains depressed?

There are many other issues to be considered relating to the creation of jobs as well as exit strategy and tomorrow we will examine a jobs model in more detail that may take some of the uncertainty out of the process.