Everyday firms, investors, and issuers try to engage in EB-5 industry best practices but many firms are barely meeting the program requirements. Throughout the ongoing legislative process, much has been said of the Government Accountability Office (GAO) report released in August 2015 that raised concerns regarding the United States Citizenship and Immigration Services’ (USCIS) ability to reliably oversee the EB-5 program.
The information in the report questions whether the USCIS has the capacity to reliably verify EB-5 investors’ source of funds, an EB-5 project’s receipt of the investment, or the project’s information itself — key components of meeting EB-5 program requirements.
However, bureaucratic challenges in the program’s administration do not reflect the true nature of the EB-5 market.
Where the USCIS has struggled, the EB-5 industry itself has stepped up, setting high standards for security, transparency, and compliance.
Not only do EB-5 issuers perform due diligence on a project’s potential investors, as more and more projects have flooded the investor market, investors have also become more selective.
Appropriate controls, clear compliance programs, and measures to protect investors have become essential parts of project marketability as this flight to quality has occurred, resulting in widespread adoption of best practices by the EB-5 industry.
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