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EB-5 Investment Repayment
The typical business plan and offering documents of a Regional Center project will provide an exit strategy that allows the EB-5 investor to receive their full investment principal back with additional accrued interest. While loan terms can vary from project to project, EB-5 investors can usually hope to receive repayment back within a five-to-seven-year period. The investment must remain “at risk” throughout the loan period, and therefore cannot be guaranteed to be returned.
What kind of return on investment (ROI) can be expected for your EB-5 Investment?
With regards to loan-based EB-5 investment models, the return cannot be guaranteed and is often offered at a moderate percentage compared to traditional institutional loans. EB-5 investors must understand and appreciate that the primary purpose of an EB-5 investment is not to make a high return on investment, but rather obtaining a United States Green Card. Equity-based and Direct EB-5 investment may offer stronger financial opportunities, but generally speaking, high-risk projects offering greater returns will often have much higher immigration risks that EB-5 investors must seriously consider.
Redeployment
Redeployment of EB-5 invested capital has become necessary as a result of increased USCIS processing times, increased visa demands and wait times, and visa retrogression effecting countries like China and Vietnam. USCIS requires that EB-5 funds must be “at risk” and cannot be returned throughout the investor’s entire two-year conditional residence period. Backlogs and lengthened processing times can result in delayed I-526 approvals and ensuing conditional residency periods that extend beyond the loan terms of particular EB-5 projects. If the EB-5 investor has yet to fulfil the conditional residency requirements and the original business plan is finished, all jobs have been created, and investor capital is available to be returned or has already been returned to the NCE, then redeployment of investor capital into another lawful commercial business activity allowed so long as it is not a purely financial activity such as an investment in securities or financial instruments on the secondary market.
Conclusion
Like any investment, EB-5 investments come with inherent risks, especially projects offering substantial returns, so it is important seriously consider weighing these risks as no project can guarantee your return of principal. It is important to work with EB-5 specialists like Dynaxe Capital who provide the proper due diligence on behalf of the projects they work with so that you are completely informed on all the risks and advantages offered.
For more information, contact one of our EB-5 experts today!
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