How to Find a Trustworthy Direct EB-5 Project

For almost 30 years, the EB-5 Immigrant Investor Program has been one of the best ways for foreign nationals to relocate to the United States. Since June 22, 2021, foreign nationals interested in the EB-5 investment program have even more reasons to participate: a district court overruled the controversial EB-5 Modernization Rule. By repealing the rule, the court lowered the minimum amounts for EB-5 investments to $500,000 for targeted employment area (TEA) projects and $1,000,000 for non-TEA projects. This change significantly lowers the bar for interested investors and opens the door for many more foreign nationals to participate in the program.

Even though the minimum amount for EB-5 investments was lowered, the regional center program, an important component of the EB5 investment industry, is still waiting for reauthorization. Because Congress failed to pass the EB-5 Reform and Integrity Act, United States Citizenship and Immigration Services (USCIS) is not accepting I-526 petitions associated with regional centers. Even though Congress will likely reauthorize the regional center program, direct EB-5 investment is currently the only option.

Even though the economic situation in the United States is perfect for EB-5 investments, interested foreign nationals should nonetheless proceed with caution. As part of the investment process, potential investors should take the time to carefully assess potential EB-5 projects. This will help investors lower their immigration risk. Potential EB-5 investors should consider the following factors when evaluating a direct EB-5 project.

Project Security and Job Creation Potential

When evaluating a potential EB5 investment opportunity, foreign nationals should pay close attention to the project’s reliability. Secure, reliable projects have a bridge loan or another source of funds to cover a possible shortage of EB-5 investment capital. This could be a senior loan with a large bank as well as a construction completion guaranty. Additionally, access to irrevocably committed funds from the developer is a good sign.

Since every EB-5 investment must preserve or create at least 10 jobs, potential investors should evaluate the projected employment generation. A reliable project will aim to create more than 10 jobs per investor, thus exceeding the minimum requirement. Offering a job cushion can soothe investors’ concerns about failing to meet the job creation criteria.

The Project Developer’s Track Record

Potential EB-5 investors should also carry out background research on the project developer. This includes researching any pending legal issues (such as lawsuits) and evaluating the developer’s track record. Developers with a history of failed projects should be avoided. The same goes for financial issues; if the developer has a history of defaulting on loans, potential investors should look for other projects. It may be advisable for foreign nationals to meet the developers in person or electronically, which will help reduce the risk of fraud.

Besides these factors, investors should also look at other characteristics of potential projects; for example, there should always be a proper fund disbursement agreement. EB-5 experts such as EB5AN help their clients avoid fraud and choose the most trustworthy EB-5 projects.