Recent developments in the EB-5 investment industry have focused investors’ attention on direct EB-5 projects. Direct EB5 investment is becoming increasingly common in 2021, and the EB-5 program is enjoying a period of high popularity. Many foreign nationals consider the EB-5 program as the best way to relocate to the United States. Even though the regional center program expired in June 2021, many foreign nationals are still interested in participating.
The repeal of the Modernization Rule lowered the minimum investment amount for targeted employment area (TEA) projects to only $500,000. However, United States Citizenship and Immigration Services (USCIS) will likely raise this amount once more. In fact, the agency already filed an appeal against the court ruling that invalidated the Modernization Rule. Therefore, foreign nationals considering an EB-5 investment should act as soon as possible to take advantage of the temporary opportunity to invest at only $500,000. Of course, due to the expiration of regional center investment, EB-5 investors can only make direct investments for the time being. In this article, we outline several reasons why foreign nationals should make a direct EB-5 investment as soon as possible.
Increased Control Over the EB-5 Project
Unlike regional center investors, who typically have little control over business management, direct EB-5 investors can often choose to be involved in day-to-day business management. Many EB-5 investors have management skills or experience and serve as valuable assets to the businesses they invest in. Since the minimum EB-5 investment amounts are high, many investors want a degree of control over how their EB-5 capital is used.
Higher Returns
One of the most compelling reasons to make a direct EB-5 investment is the potential for higher returns. There are far fewer intermediaries involved in direct EB-5 projects when compared to regional center projects; all direct EB-5 funds must be invested directly into the new commercial enterprise (NCE). In addition, direct EB-5 businesses generally have a smaller offering and are thus open to fewer EB-5 investors. This gives direct investors the potential for higher returns from business operations.
A Permanent Investment Path
Due to the suspension of the regional center program, regional center investors are currently in a state of uncertainty. USCIS has stopped processing all I-526 petitions associated with regional centers. If this situation drags on much longer, many regional center investors may try to get their invested funds back, thus causing major inconveniences for the projects they invested in. In contrast, direct EB-5 investors do not need to worry about government reauthorization—direct investment is an integral part of the EB-5 program and does not need to be revalidated periodically.
In fact, the expiration of the regional center program may actually benefit direct EB-5 projects: since USCIS adjudicators are no longer processing regional center petitions, there may be more staff members available to process direct investment petitions. As a result, USCIS processing times for direct EB-5 investors may be shorter than usual.
Direct EB5 investment is a secure, reliable, and often profitable way to relocate to the United States. Interested foreign nationals should act quickly to make their investments and file their I-526 petitions before the minimum investment amounts are raised once more. EB5AN would be delighted to schedule a call with interested investors to discuss open direct EB-5 projects. Many trustworthy and profitable direct investment opportunities are currently available.
