The popularity of the EB-5 investment visa has soared in recent years. Since the EB-5 program’s creation, thousands of foreign nationals have successfully relocated to the United States and contributed billions of dollars in funding. Evidently, the EB-5 program provides the U.S. economy with a much-needed source of capital while encouraging immigration. However, 2021 has been a turbulent year for the EB-5 investment industry, and foreign nationals may be wondering whether this is a suitable time to participate.
The EB-5 Regional Center Program expired on June 30, 2021, and it has not been reauthorized as of November 2021. Most EB-5 investments were made in regional center-sponsored projects, so the EB-5 industry was left without its most popular investment model.
Still, investors have good reason to participate in the EB-5 program: the EB-5 investment threshold was lowered to only $500,000 for projects in targeted employment areas (TEAs). Investors must act quickly to benefit from this opportunity; some industry analysts expect Congress to pass legislation that would reform the EB-5 program in the coming months, and the minimum investment threshold could be raised once more.
As of November 2021, all EB-5 investments must be made in direct projects. Even though it has not enjoyed the popularity of the regional center model, direct EB-5 investment offers many advantages.
Direct Investment Is Permanent
Unlike the regional center program, direct EB5 investment has always been an integral part of the EB-5 industry; it does not need to be revalidated periodically by the U.S. government. Unfortunately, due to the regional center program’s expiration, many EB-5 investors now find themselves in an uncomfortable position: United States Citizenship and Immigration Services (USCIS) is no longer processing I-526 petitions associated with regional centers. As a result, regional center investors will simply have to wait until the program is reauthorized to continue the EB-5 process. Direct EB-5 investors, on the other hand, will never be in such a scenario.
Direct EB-5 Projects Grant Investors More Control
Regional center investors typically subscribed to their projects as limited partners with little involvement in business management. In contrast, direct EB-5 investors usually play a more active role in business operations, thus gaining more control over how their EB-5 investment capital is used. In addition, direct EB-5 projects tend to be smaller and subscribe fewer investors than regional center projects; this means that returns for direct investors are usually higher. Fewer intermediaries are involved in the direct EB-5 investment model than in regional center projects.
The opportunity to make a direct EB-5 investment of only $500,000 may be drawing to a close, so interested foreign nationals should work with an immigration attorney and begin the EB-5 process. Admittedly, it can be difficult to identify a suitable EB-5 project, but EB5 Affiliate Network (EB5AN) helps investors find the most transparent and low-risk investment options in the industry. We provide our clients with invaluable guidance throughout every step of the EB-5 process.