Risk and compliance

Due diligence

Also called project due diligence.

Due diligence in EB-5 is the investor's own independent check on the project, its business plan, its job model, its sponsor and its exit, and it answers a different question from whether the petition qualifies, because no government agency endorses or approves the offering behind a designated regional center.

What it decides

Approval of Form I-956F is generally binding on the immigration adjudication of the Forms I-526E and I-829 that follow it, but it is not a view on whether the money comes back. The statute forces disclosure rather than judgement: 8 U.S.C. 1153(b)(5)(F)(i)(IV) makes the regional center file every investment and offering document with USCIS, and those must reference all material investment risks, any conflicts of interest, any pending material litigation or bankruptcy and any material adverse judgment or bankruptcy order of the last ten years, and every fee or ongoing interest paid to agents, finders or broker dealers with a description of what each was paid for. The joint SEC and USCIS investor alert supplies the practical steps: ask for the offering memorandum in writing, ask who is being paid to recommend it, verify the claims at source, examine whether the loan is secured by collateral actually pledged to investors, and ask whether the developer has its own equity at stake.

Governed by 8 U.S.C. 1153(b)(5)(F)(i)(IV), items (aa) to (dd), and (F)(i)(V) for the securities due diligence policies, with (F)(ii) for the binding effect of approval; 6 USCIS-PM G.5(B)(4) and (B)(5), Project Applications, last revised by the policy alert of 16 July 2024; joint SEC and USCIS Investor Alert, Investment Scams Exploit Immigrant Investor Program, release date 1 October 2013, archived on uscis.gov. The alert is authoritative for the diligence steps and for the statement that designation is not endorsement, but it predates the 2022 Act and still refers to Forms I-924 and I-924A, now replaced by Forms I-956 and I-956G, so do not rely on its procedural detail.

Where this is explained properly

Pages here that go into due diligence rather than mentioning it.

Related terms

Form I-956FForm I-956F, Application for Approval of an Investment in a Commercial Enterprise, is the application a designated regional center must file for each particular investment offering before any investor may petition on that offering.
Capital at riskThe rule that the investor's required capital must be genuinely exposed to loss, with a real chance of gain, and not shielded by a guaranteed return or by any contractual right to repayment.
Exit strategyExit strategy is the industry name for how and when invested capital is meant to return to the investor, whether through repayment of the project loan, a sale, a refinancing or a buyback. USCIS does not define the term, and immigration law limits it: capital the investor has a contractual right to get back does not count as capital at all.
Default and foreclosureDefault is the project borrower failing to meet its obligations to a lender, and foreclosure is that lender taking the pledged collateral, which in the usual regional center loan structure can leave EB-5 capital, ranking behind the senior lender, with nothing left to recover.
Securities fraudSecurities fraud in EB-5 is the offer or sale of an interest in a new commercial enterprise by means of an untrue statement or an omission of material fact, whether about the project, the returns or the immigration outcome, and it is the failure that can take the investor's money and immigration status together.

Checked against primary sources on 10 August 2026. Back to the glossary