[HOT] Why arn't the EB-5 Program projects designed for "risky" projects?


Some criticize the EB-5 Program -- especially regional center-based EB-5 projects -- for not carrying a sufficient level of "risk". This criticism, although understandable, reveals a lack of knowledge of the EB-5 Program, because the way the EB-5 Program is set up, the regional center-based EB-5 projects cannot carry too much risks because EB-5 investors know their chances of obtaining permanent green cards diminishes with greater risks. Let's be honest: If you were a potential EB-5 investor, would you participate in an EB-5 project which you thought carried a lot of risks of failing and not creating enough jobs which is the primary requirement of removing conditions? Potential EB-5 investors might participate in a risky EB-5 project ONLY IF the failure of the project meant that they would lose some or all of the investment amount, but not when the failure will mean they would be deported from the United States even though they invested in good faith and contributed to U.S. economy!

Why is this? It's because an EB-5 investor and family have to go through the conditional permanent green card period before being able to apply for I-829 conditions removal petition. And their chances of obtaining I-829 approval diminishes when the EB-5 project carries more risks. In order to motivate more risky EB-5 projects, the Program has to be changed to eliminate the conditional green card stage, and allow the EB-5 investors and families to obtain permanent green cards right away.

In short, you are never going to see regional center-based EB-5 projects carry the same kind of risks inherent in real-life projects until you allow the EB-5 investors and families to obtain permanent green cards from the beginning (or the failure of the project does not lead to an I-829 denial and deportation but only that the EB-5 investor will lose some or all of the investment amount), because the investors know that if the EB-5 projects fail, they may get deported from the United States for not being able to create enough jobs. Basically, they do not mind losing some or even all of the money (although no one likes to lose money); but the last thing they want is to be deported from the United States. Let's face it: if you were a relatively rich person, you would not want your family to get deported after you established substantial ties and connections to the USA. Therefore, to induce more risky regional center-based EB-5 projects, the EB-5 law should be changed to eliminate the conditional green card status and allow EB-5 investors and family to obtain permanent green cards from the beginning.

Actually, this thought just came to my mind. If you are going to allow an alien to marry a USC and obtain conditional permanent residence, and even if the marriage fails, allow her to remove conditions based on a "good faith" waiver, there is a strong argument to be made (from a legal and practical perspective) that EB-5 investors in failed EB-5 projects should be able to submit similar "good faith" waiver petitions. Allow this, and you can even raise the minimum investment amount to a higher amount.

In conclusion, either make the EB-5 Program more practical, or get rid of the Program.