Guaranteed Returns Are Not an EB-5 Feature. They Are a Denial.

Every EB-5 investor wants to protect their capital, and every sponsor wants to make the offering attractive. That shared interest produces the most persistent structural error in the program: terms that make the investment feel safe also make it ineligible.

The rule

An EB-5 investor must place capital "at risk for the purpose of generating a return." 8 CFR 204.6(j)(2). The statute, as amended by the EB-5 Reform and Integrity Act of 2022, now spells out what does not count. Capital does not include funds "invested in exchange for a note, bond, convertible debt, obligation, or any other debt arrangement between the alien investor and the new commercial enterprise," and does not include capital subject to an agreement giving the investor "a contractual right to repayment." 8 U.S.C. 1153(b)(5)(D)(ii)(III).

That codifies what USCIS has applied since 1998, when a set of precedent decisions established the modern framework:

• Matter of Izummi, 22 I&N Dec. 169 (Assoc. Comm'r 1998), held that an investor's right to sell their interest back at a guaranteed price, and similar redemption arrangements, turn equity into debt and defeat the at-risk requirement.
• Matter of Soffici, 22 I&N Dec. 158 (Assoc. Comm'r 1998), addressed how assets and money are valued and traced into the enterprise.
• Matter of Ho, 22 I&N Dec. 206 (Assoc. Comm'r 1998), held that capital is not at risk merely because it has been placed in a business; the business plan must show actual undertaking of business activity.

Structures that fail

Guaranteed buybacks or put options. Any right to require the enterprise, the regional center, or an affiliate to repurchase the investor's interest at a fixed or minimum price is a contractual right to repayment.

Promissory notes to the investor. If the investor lends money to the new commercial enterprise and receives a note, the investment is debt. This is different from the common and permissible structure in which the enterprise, after receiving equity from investors, makes a loan to a separate job-creating entity.

Guaranteed returns. A promised fixed return, regardless of project performance, signals that the investor bears no real loss exposure.

Side letters. Undisclosed agreements that override the offering documents are treated as part of the investment. A clean limited partnership agreement does not survive a side letter promising repayment.

Structures that can work

Escrow pending approval. Funds placed in escrow and released to the enterprise upon petition approval, with a refund if the petition is denied, has long been accepted when the escrow terms are properly drafted, because the refund is conditioned on an immigration outcome rather than on the investment's performance.

Equity in a lending enterprise. The typical regional center model: investors take equity in a new commercial enterprise, which lends to a project company. The investor's return depends on the loan being repaid, which depends on the project.

Loans to the investor. Loan proceeds the investor borrows and then invests as equity can qualify as the investor's own capital, a position confirmed in Zhang v. USCIS, No. 19-5021 (D.C. Cir. Oct. 27, 2020). The borrowing must be in good faith and not a means of circumventing the rules on permissible capital. 8 U.S.C. 1153(b)(5)(L)(iii)(I).

Planned exit after the sustainment period. The statute requires the capital to be expected to remain invested for not less than two years. 8 U.S.C. 1153(b)(5)(A)(i). An exit plan that depends on project performance, such as refinancing or sale, is not a guarantee. A fixed repayment date disconnected from how the project performs is closer to a guarantee.

Reading the offering documents like a CFO

The at-risk question is decided in the documents, not in the sales presentation. When we review an offering, the financial questions we ask are:

• Where in the capital stack does the EB-5 money sit, and what is senior to it?
• What is the source of repayment, and what happens if the senior lender is not repaid first?
• Is any affiliate of the sponsor providing a completion guarantee, a repayment guarantee, or a purchase commitment? To whom does it run?
• What does "return of capital" mean in the partnership agreement, and who controls the timing?
• Are there any other agreements, including marketing agent arrangements, that promise the investor anything?

An offering that answers these questions clearly is not risk-free. It is appropriately risky, which is what the statute requires.

The proposed rule

DHS's July 2, 2026 proposed rule would codify additional capital at-risk standards, including a requirement to show concrete business activity. 91 FR 40676. It remains a proposal, and existing statutory and precedent requirements apply today.