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Compliance: Successfully petitioning for an EB-5 visa (Part two)

Taking a “calculated” risk can be a good thing, and a guarantee can actually be detrimental

Obviously, one of the biggest concerns for an EB-5 petitioner is “Will I get my money back?” EB-5 investors, like all investors, desire some kind of assurance that their investment capital will be reasonably safe from risk. There are times, however, when risk can be a good thing, and a guarantee can actually be detrimental. Such is the case when it comes to satisfying the investment requirements of the EB-5 program. In order to qualify as an EB-5 investment, the investment funds must be at risk. But what exactly does at risk mean? This article seeks to answer this question, and to explain the difference between an EB-5 investment that is at risk and a risky EB-5 investment!

To begin with, it is important to remember that the underlying goal of the EB-5 program is to boost the U.S. economy. By offering EB-5 visas to immigration oriented investors, the federal government hopes to “attract individuals from other countries who are willing to put their capital at risk in the United States, with the hope of a return on their investment, to help create U.S. jobs.” Thus, the purpose of the program is to increase U.S. employment and bring much needed liquidity to U.S. businesses by encouraging genuine investments that may have a risk of loss (as opposed to selling bonds that are nothing more than IOUs.) Evidence of mere intent to invest, or of prospective investment arrangements entailing no present commitment, will not constitute an at risk investment.

Contributing Author

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Jeffrey C.P. Wang

Jeffrey C.P. Wang is the managing partner and founder of WHGC, P.L.C. Mr. Wang's practice focuses on handling the legal concerns of international and domestic...

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Contributing Author

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John Frederick Karch

John Frederick (Rick) Karch is a partner at WHGC, P.L.C. and a member of the International Corporate Transaction Group. His practice focuses on financial and...

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