One of the most common questions asked by EB-5 investors is  “Will my investment be guaranteed”? They ask because other country’s similar programs – most notably Canada’s – offer a path to citizenship via government bonds, which are guaranteed.

The short answer is “no”, the EB-5 program is not a guaranteed investment.

The long answer is “no – but you shouldn’t really care”, and Walmart will help me make my point.

First, as mandated by USCIS and analyzed/excerpted below from Mona Shah and Yi Song:

“Proof of an investment being “at risk” is a required element of the EB-5 Immigrant Investor Program. A certain element of risk is what demonstrates the immigrant’s commitment to the investment and job creation that are central to the EB-5 program. How to present an EB-5 project as one in which an investment is “at risk,” and yet is not a “risky” project is a challenge that EB-5 practitioners have been grappling with for years. Unfortunately, although the regulations address the “at risk” element, neither the statute nor the existing body of EB-5 case precedents specifies precisely what the degree of risk must be.”

It is understandable – people hear the phrase “at risk” and they picture rolling a dice with $500,000 USD.  However, when you take the time to do the due diligence on the way these projects are designed – one can clearly see that strong projects are “at risk” not “risky”.

There is one notable exception to the above – fraud.

As with any business, EB-5 is not without its blemishes. Here are links to a few notable instances.

As with any industry where large amounts of money are exchanging hands (see: banking, real estate, multi-level marketing) – sometimes people get ripped off. Someone lies, or misrepresents what they are offering, and someone is taken advantage of. What perhaps magnifies this effect in the EB-5 industry is that it involves foreign individuals, with a deep and burning desire to get to the United States. Their strong desire might cloud their judgement when looking at particular projects. That is understandable.

Now – for the connection between Walmart and the American Investor Program.

Walmart has millions of customers every day.

It is almost a statistical certainty that someone died at a Walmart last night. Take a second and google “Death at Walmart” right now, and I’d bet a news headline pops up.

Should you stop going to Walmart? No.

Does this mean Walmart is dangerous? No.

Does this mean Walmart needs to totally revamp their security? No.

Does it mean Walmart might need to look at its emergency procedures, put in place some degree of better practices, and honestly communicate with their customers? Yes, and that is exactly what they do every day.

It’s the same in EB-5. EB-5 has put $16.9 billion into the US economy.

That is a lot of money – and much like the Walmart example – sometimes bad things happen when numbers get that high. I challenge you to have some context when it comes to EB-5, and not lose their perspective on account of a few sensationalist headlines and clearly bad apples.

So what’s the solution?

Educate yourself. Work with smart people. Ask the right questions. Do your homework.2