Foreign nationals looking to gain permanent resident status in the United States often choose to participate in the EB-5 investment program due to the many benefits it offers. Foreign nationals making an EB-5 investment can choose between many new commercial enterprises (NCEs) and can use almost any legal source of funds. The EB-5 investment industry spans many fields, including tourism and real estate development. There are many trustworthy, even lucrative, investment opportunities. Moreover, the EB-5 Modernization Rule was repealed on June 22, 2021, allowing foreign nationals to make an EB5 investment at only $500,000 if the project is in a targeted employment area (TEA).
Additionally, an investor’s spouse and unmarried children under the age of 21 are also eligible to receive permanent resident status. In fact, the investor and their family will eventually become eligible for U.S. citizenship.
EB-5 investors must choose between making a direct investment or investing through a regional center. Before foreign nationals decide to pursue an EB-5 investment, they should carefully examine the advantages and disadvantages of the direct and regional center options.
Regional Center Investment
United States Citizenship and Immigration Services (USCIS) designates regional centers to create and promote economic growth. Regional center investments are made, not directly to the project itself, but through a regional center. In these projects, the job-creating entity (JCE) and the NCE are usually two distinct entities.
One of the main benefits of regional center investment is its flexibility regarding job creation. Aside from directly created employment, regional center projects are also allowed to count indirect and induced jobs.
Direct Investment
Direct EB5 investment capital must be invested into the NCE. Only jobs that appear on the NCE’s payroll can be counted. Because of their stricter job creation requirements, it is typically harder for direct EB-5 projects to create the needed employment.
Level of Involvement
Another difference between direct and regional center projects is the investors’ level of involvement. For the most part, direct investment projects require their investors to be more involved than regional center-sponsored projects.
While the many regulations of the EB-5 investment program can seem intimidating at first glance, both direct and regional center investments have their advantages. Before making an EB-5 investment, foreign nationals should retain an immigration attorney to help them decide which option is best.
