As of October 1, 2021, the Centers for Disease Control and Prevention (CDC) will require U.S. green card applicants to be vaccinated against COVID-19. This means that receiving a COVID-19 vaccine has been added to the Immigration and Nationality Act’s (INA’s) criteria for green card applicants. The INA already required applicants to be vaccinated against several preventable diseases.

This announcement follows the Food and Drug Administration’s (FDA’s) full approval of the Pfizer-BioNTech vaccine.

Foreign nationals planning an EB5 investment should note that this requirement does not apply to investors who file Form I-526, Immigrant Petition by Alien Investor. The I-526 petition is not in itself an application for conditional permanent resident status—EB-5 investors become eligible for conditional green cards only if their Form I-526 is approved by United States Citizenship and Immigration Services (USCIS). The vaccination requirement applies only to green card applicants, such as EB-5 investors with an approved I-526 petition. EB-5 investors who are already in the United States with an immigrant visa and submit Form I-845, Application to Register Permanent Residence or Adjust Status, must also get vaccinated.

To comply with the CDC’s new guidelines, applicants will have to provide proof of vaccination. Proof of vaccination may take the form of a vaccination record or medical chart. If applicants are unable to get vaccinated before undergoing their medical exams, a civil surgeon may administer the vaccine during the exam—the important thing is for applicants to be vaccinated before the medical exam is completed. This extra step in the green card application process may cause delays.

Even though the FDA granted full approval to the Pfizer vaccine, green card applicants are allowed to receive other vaccines that have been approved for use in the United States, such as the Johnson & Johnson/ Janssen vaccine. Additionally, the CDC may allow certain applicants to be exempt from the vaccine requirement. For example, applicants who are too young to get vaccinated or cannot do so for health reasons can receive waivers.

COVID-19’s Impact on the EB-5 Program

The EB-5 investment industry was not exempt from the disastrous effects of the COVID-19 pandemic. The economic impact that the virus wreaked on the U.S. economy in 2020 forced many EB-5 projects to suspend development. Moreover, the increased unemployment rates altered which areas of the United States qualified as targeted employment areas (TEAs), which likely inconvenienced investors in the process of completing their I-526 petitions.

As the world slowly recovers from the pandemic, foreign nationals interested in the EB-5 program should act quickly to identify suitable EB-5 projects. Moreover, the minimum EB-5 investment amount is only $500,000 as of June 22, 2021, so this is the ideal time to make an EB-5 investment.

The EB-5 investment industry received shocking news on June 22, 2021: the controversial EB-5 Modernization Rule, which made several important changes to the EB-5 program, had been invalidated by a U.S. district court. Most EB-5 stakeholders celebrated the court’s decision—as a result of the ruling, EB-5 investments can now be made at $500,000 for targeted employment area (TEA) projects and $1,000,000 for non-TEA projects (the Modernization Rule had raised these amounts to $900,000 and $1,800,000). The opportunity to make an EB-5 investment at only $500,000 prompted many foreign nationals to participate in the EB-5 program.

Just a few days after the invalidation of the Modernization Rule, the EB-5 Regional Center Program expired temporarily on June 30, 2021. As of that date, United States Citizenship and Immigration Services (USCIS) only accepts direct EB-5 investments. Even though EB-5 regional centers will likely be reauthorized, investors should take advantage of the valuable opportunity to make direct investments at $500,000. In this article, we explain how to make an EB5 investment at the lower minimum amount while reducing the associated financial risk.

How to Invest at the Reduced Amounts Safely

Despite the above-mentioned court ruling, USCIS or the Department of Homeland Security (DHS) could take action to revalidate the Modernization Rule, possibly by taking the case to the Court of Appeals. Interested foreign nationals will have to consider this scenario before deciding to invest at $500,000.

To reduce the risk of failing to meet the minimum investment requirements in the future, a foreign national can invest $900,000 into an EB-5 project that will release $500,000 from its escrow account once Form I-526 is approved. Then, the foreign national can submit two I-526 petitions: one I-526 petition would report an investment of $500,000, while the other would be filed at $900,000. By following this procedure, investors can feel confident about their EB-5 investment even if the minimum required amounts are raised once more.

Investors should also note that they are allowed to use a wide variety of sources to procure their funds—regardless of the source of funds, USCIS mainly focuses on making sure that the funds originated legally. Investors may use gifts, loans, and even cryptocurrencies to fund their EB-5 projects.

The documentation needed to prove the legality of each of these sources varies. For gifted funds, investors will have to provide information regarding the gift giver’s background and the original source of the capital. In the case of loans, investors should submit a copy of the loan agreement and a capital source statement outlining the loan terms (a 2020 court ruling decided that unsecured loans can be used as EB-5 investment capital). EB-5 investors using cryptocurrencies to fund their projects usually convert the digital fund to a conventional currency and then invest this amount into the project. Of course, they must prove that the cryptocurrency was originally sourced lawfully.

How to Reduce the Financial Risk

All EB-5 investments carry a degree of financial risk: foreign nationals can never be completely certain that their EB-5 investment will be returned or that it will result in U.S. permanent resident status. For example, investors may wonder when the EB-5 project will give back their invested funds. This largely depends on the operating agreement signed by the investor. In addition, USCIS dictates that EB-5 investment capital must remain at risk—there cannot be a binding guarantee that the funds will be returned, even if the investor does not ultimately obtain U.S. residency.

Investors need to find out whether their EB-5 project will return the invested funds if their I-526 petition is denied. Fortunately, most projects do have arrangements for returning funds to investors in the case of a Form I-526 denial. The terms of these provisions usually differ among EB-5 projects—for example, the conditions needed to repay the invested funds in their entirety may vary.

EB-5 projects may either offer to hold an investor’s funds in escrow until Form I-526 is approved or release them for use immediately. If an EB-5 project will release invested funds immediately, the investors should make sure that their funds will be repaid in the event of a Form I-526 denial. In most cases, projects that hold invested funds in escrow are safer.

Even though making an EB5 investment does require taking some risks, obtaining a U.S. green card is certainly worth the effort: foreign nationals should act quickly to take advantage of the reduced investment amounts. EB5AN would be delighted to help you identify the best EB-5 investment opportunities.

Obtaining an EB-5 visa is one of the most popular ways for foreign nationals to gain permanent resident status and relocate to the United States. This is unsurprising in light of the many benefits of participating in the EB-5 investment program, which allows foreign nationals to invest in a wide variety of U.S.-based new commercial enterprises (NCEs) using virtually any legal source of funds. The EB-5 investment industry is full of reliable, lucrative projects in sectors such as hospitality, tourism, and commercial real estate development. Additionally, the controversial EB-5 Modernization Rule was overturned on June 22, 2021. As of that date, foreign nationals can make an EB5 investment at $500,000 for targeted employment area (TEA) projects and $1,000,000 for non-TEA projects. These minimum investment requirements are significantly lower than the previous amounts of $900,000 for TEA projects and $1,800,000 for non-TEA projects.

The investors themselves are not the only ones who benefit from participating in the EB-5 program—their spouses and children are also eligible to receive green cards. What is more, the investor and their family will even be able to apply for U.S. citizenship after holding permanent resident status for five years.

Perhaps the most important decision foreign nationals can make regarding their EB5 investment is to choose between a direct investment or a regional center project. (Even though the regional center program expired on June 30, 2021, investors can be confident that it will be resumed in the near future.) There are many key differences between these two EB5 investment types, including how the investments are made and the investor’s level of involvement in the project. Foreign nationals planning an EB-5 investment would do well to carefully compare regional center and direct investments to decide which one suits their investment goals and availability.

Basic Characteristics of Regional Center EB-5 Investments

Regional centers are agencies approved by United States Citizenship and Immigration Services (USCIS) that promote employment and economic growth. When a foreign national invests in a regional center project, they do so through the intermediation of a regional center, which has set up an investment fund. For these kinds of projects, the NCE and the job-creating entity (JCE) are typically separate.

The main reason regional center investments were so popular before the June 2021 expiration of the program was their flexible job creation criteria. In addition to direct employment (jobs that appear on the NCE’s payroll), regional center projects can count indirect and induced jobs. Indirect employment is generated by the EB-5 business’s purchases of products and services from local companies, and induced jobs are a result of the employees’ spending in the project’s area. As a result of these more relaxed employment creation criteria, it is typically easier for regional center EB-5 investments to create the 10 positions required by USCIS.

Basic Characteristics of Direct EB-5 Investments

Unlike regional center investments, direct EB-5 capital must be invested directly into the NCE. Moreover, the NCE and the JCE must be the same entity, and only directly created jobs can be counted toward fulfilling the employment criteria. Direct projects must hire employees and have them on their payroll. These jobs must last for a minimum of two years, but multiple employees can fill the position during that period—USCIS will focus mainly on the duration and nature of the position, not on how many employees filled it during the two-year period. Due to the absence of indirect or induced employment, direct EB-5 projects will usually have to make a greater effort to create the required number of jobs.

Investor Involvement

Direct and regional center projects also require different levels of involvement from their investors. Most regional center projects allow investors to become limited partners. Even though they must contribute to important management and policy matters, they may not have to oversee the business’s day-to-day activities. In contrast, direct investors are usually more involved in the project’s operations and have more control over how their EB-5 investment is spent. As a result, many foreign nationals who make a direct EB-5 investment want to gain significant profits as well as permanent resident status.

The complex regulations governing the EB-5 investment program can certainly be overwhelming at first, and investors must weigh numerous factors when choosing between direct and regional center investments—each investment type has its own benefits and drawbacks. Foreign nationals who are planning an EB-5 investment should consult with an immigration attorney and EB-5 experts to decide which investment type will be most advantageous.

The EB-5 investment industry has undergone several important changes since 2019. In November 2019, the controversial Modernization Rule changed the guidelines for targeted employment area (TEA) designation and raised the minimum investment amounts significantly. Since the higher minimum investment amounts of $900,000 for TEA projects and $1,800,000 for non-TEA projects made the EB-5 program less accessible for foreign nationals, the industry as a whole was opposed to the Modernization Rule.

However, EB-5 investors received momentous news on June 22, 2021: the U.S. District Court of the Northern District of California ruled that the Modernization Rule had been implemented improperly by the Department of Homeland Security (DHS). As a result of this ruling, the Modernization Rule was invalidated, and its controversial changes were reversed. EB-5 stakeholders celebrated the court’s ruling, and numerous investors rushed to file their I-526 petitions at the minimum amounts of $500,000 for TEA projects and $1,000,000 for non-TEA projects.

Now, the EB-5 program is at a crossroads once more: United States Citizenship and Immigration Services (USCIS) appealed the aforementioned court decision on August 23, 2021. A federal appellate court will once again examine the lawsuit. If the appellate court rules in favor of the Modernization Rule, then USCIS will have succeeded in raising the minimum EB-5 investment amounts once more and reimplementing the other changes. EB-5 investors and project developers are awaiting the court’s decision in suspense.

Possible Consequences of the Appeal

EB-5 investors who have filed Form I-526 at the lower amount of $500,000 may be understandably concerned—how will USCIS’s appeal affect their visa petition? If USCIS wins the appeal, will it reject visa petitions filed at the lower amounts during the Modernization Rule’s lapse?

Investors who filed their petitions at the pre-Modernization Rule amounts can rest at ease. USCIS did not file a motion to stay the Modernization Rule’s repeal, and the agency is currently accepting all direct EB-5 investment petitions filed at $500,000. This shows that USCIS will, in all probability, continue to process these petitions even if it wins the appeal.

Foreign Nationals Should Hurry to Invest at the Lower Amounts

Even if the appellate court does not rule in USCIS’s favor, the Modernization Rule will likely be reimplemented at some point. Therefore, foreign nationals planning an EB5 investment should act quickly to invest at the lower amount of $500,000. EB5AN offers the most trustworthy EB-5 investment opportunities and helps investors get started on the path to permanent resident status.

Since the expiration of the EB-5 Regional Center Program on June 30, 2021, the EB-5 investment industry has been in a state of uncertainty. Regional center investments were suspended because Congress did not pass the EB-5 Reform and Integrity Act. This bill, which was introduced by Senators Patrick Leahy and Chuck Grassley, would have reauthorized the regional center program for several more years. To the dismay of the EB-5 industry, Senator Lindsey Graham blocked a unanimous consent request to pass the act and thus precipitated the suspension of regional center investments. As of August 12, 2021, the program has not been revalidated.

Many EB-5 investors are understandably worried. United States Citizenship and Immigration Services (USCIS) announced on its website that it would cease to accept EB-5 petitions associated with regional centers. Therefore, foreign nationals who made an EB-5 investment in a regional center before June 30, 2021, may be wondering if they will ever be able to obtain U.S. permanent resident status. This article explains what needs to happen for the regional center program to be reauthorized and shows why this is a critical issue for the entire EB5 investment industry.

How Regional Center Investments Could be Reauthorized

Most likely, the regional center program will resume only if Congress agrees to accept the EB-5 industry’s requests for reform or if industry members compromise and settle for legislation that does not make all their desired changes to EB-5 policies. A bill reauthorizing regional center investments will probably have to be passed as part of a larger legislative vehicle. Fortunately, the upcoming budget reconciliation and infrastructure bills could be used for this purpose.

The various stakeholders in the EB-5 investment industry seem unable to agree on what changes should be made to the EB-5 program. For instance, the Reform and Integrity Act did not stipulate significant changes to EB-5 policies: it only introduced new integrity measures. Many EB-5 industry members were looking for more substantial changes to the program, such as an increased number of available EB-5 visas. Controversial changes like this will likely be met with contention, so it is unlikely for thorough EB-5 investment reform to succeed in Congress.

If the upcoming bills do not result in reauthorization for regional centers, the EB-5 industry should lower its expectations for reform and focus on saving the regional center program. In that case, the Reform and Integrity Act may still be viable as it does not make substantial changes to the industry. Realistically, however, any long-term reauthorization of the regional center program will likely have to be accompanied by at least some of the desired changes to EB-5 policies.

The Importance of Revalidating the Regional Center Program

The EB5 investment industry should do all within its power to secure reauthorization for regional centers—the longer the program remains suspended, the greater the consequences. Many EB-5 visas could be wasted, and regional center investors may eventually lose hope and try to get their capital back. USCIS could even start to deny preexisting regional center I-526 petitions, and the EB-5 program’s reputation would be tarnished as a result.

The EB-5 Immigrant Investor Program, which has enabled thousands of foreign nationals to relocate to the United States, underwent significant changes in June 2021. On June 22, a district court repealed the EB-5 Modernization Rule, which had made several unwelcome alterations to EB-5 policies. As a result of the court’s ruling, the minimum EB-5 investment amounts dropped to $500,000 for targeted employment area (TEA) projects and $1,000,000 for non-TEA projects. This news was met with widespread approval across the EB5 investment industry—now, many more foreign nationals will be able to participate in the program.

Shortly after the district court’s ruling, the regional center program was suspended on June 30 because Congress failed to pass the EB-5 Reform and Integrity Act. As of August 12, 2021, the regional center program has yet to be revalidated, and USCIS is not accepting I-526 petitions associated with regional centers. It is unclear when Congress will take action to reauthorize regional center investments, so only direct EB-5 investments are allowed for the time being.

The expiration of the regional center program and the lowered EB-5 investment amounts will likely cause an unprecedented surge in direct investments. Even though there has never been a better time to invest directly, interested foreign nationals should carefully evaluate potential EB-5 projects to reduce their financial and immigration risk. When assessing direct EB-5 investment opportunities, potential investors should consider the following factors.

How likely is it for the project to be completed?

Reliable projects take measures to prepare for a possible shortage of EB-5 investment capital. For instance, they might have a bridge loan or another source of funds to use if only part of the expected EB-5 capital is procured. Signs that a project will likely be completed include a construction completion guaranty and a senior loan with a large bank. Additionally, the project should have access to irrevocably committed funds from the developer.

Will the project generate the required employment?

Every EB-5 investment must create or preserve at least 10 full-time jobs for U.S. workers. Therefore, investors need to evaluate each project’s potential for job creation. The most trustworthy EB-5 projects have an ample projected job cushion—they plan on generating many more jobs than the 10 positions required per investor. Real estate development projects that are already well under construction are especially likely to create the needed jobs.

How reputable is the project developer?

Potential investors also need to do research on the project developer’s background, finding out how many projects it has already completed and how much experience it has. If the developer is currently in a serious lawsuit, has a history of defaulting on loans, or has been unable to complete similar projects in the past, then investors should look for other projects. Unfortunately, foreign nationals have occasionally been the victims of fraud by unscrupulous developers, so an in-person or virtual site visit might also be appropriate.

Foreign nationals planning an EB5 investment need to consider many other characteristics of potential projects, such as their fund disbursement agreement and standing with USCIS. EB-5 experts such as EB5AN offer their clients valuable expertise, helping them to minimize the risks associated with EB-5 investments and choose the safest available projects.

United States Citizenship and Immigration Services (USCIS) has released the September 2021 Visa Bulletin. This monthly publication shows which investors are eligible to apply for and receive an EB-5 visa. Since USCIS is known for its notoriously slow processing times and each country is allotted only a limited number of EB-5 visas, the Visa Bulletins often reflect significant backlogs. However, USCIS’s processing efficiency has shown moderate signs of improvement in recent months. For instance, Vietnam, which had experienced a backlog since 2018, finally achieved “Current” status in the August 2021 Visa Bulletin.

Chart A, “Final Action Dates for Employment-Based Preference Cases”

Chart A of the Visa Bulletin indicates that the final action date for Chinese investors has moved forward one week, from November 15, 2015, to November 22 of that year. Even though this is a small improvement when compared to the Vietnamese final action date’s huge leaps in the July and August Visa Bulletins, any advancement for China is always good news—until the June 2021 bulletin, China’s final action date had not budged for over a year.

This news means that Chinese foreign nationals who made an EB-5 investment, successfully filed Form I-526 on or before November 22, 2015, and applied for an EB-5 visa are now eligible to receive conditional permanent resident status. Interestingly, the Chinese final action date also advanced by one week in the August 2021 Visa Bulletin. If this trend continues, it will take several years before the Chinese EB-5 backlog is cleared.

Foreign nationals planning an EB-5 investment should note that the regional center values in Chart A are marked as “U” (unauthorized) because the regional center program was suspended on June 30, 2021. Congress failed to pass the legislation necessary to reauthorize regional center projects, but EB-5 investment stakeholders are confident that the program will be revalidated in the coming months.

Chart B, “Dates for Filing of Employment-Based Visa Applications”

Unlike Chart A, Chart B does not contain much good news for the EB-5 investment industry. China’s date for filing remains the same: December 15, 2015. Disappointingly, this date has remained stagnant for over 12 months. Even though improvements in the final action date should ostensibly push forward the date for filing, this has not been the case for China. As a result, Chinese investors who filed Form I-526 after December 15, 2015, are not allowed to submit their visa petitions to the National Visa Center (NVC).

Even though USCIS backlogs continue to plague the EB-5 investment industry, the September Visa Bulletin reflects some progress toward clearing the Chinese backlog. Still, Chinese foreign nationals who have made an EB5 investment must exercise extraordinary patience—they may have to wait for several years before applying for their well-deserved visas. Since the EB-5 industry is in a constant state of flux, interested foreign nationals should work with experienced consultants such as EB5AN, who can help them identify the most reliable and convenient EB-5 projects.

Although the EB-5 Immigrant Investor Program came into existence in 1990, it took the residency-by-investment program around 20 years to gain traction and witness a large number of investors pursuing a U.S. green card through an investment. In fact, for many years, the program issued far fewer than the annual 10,000 visas it was allocated. That changed in the 2010s, when EB-5 demand skyrocketed, particularly in China. In 2021, China is still a major EB-5 market, but the landscape has diversified, with the EB-5 program attracting investors from more and more nations.

Why has the EB-5 program exploded in popularity? The increasing demand for an EB-5 investment is attributable to a number of reasons. Here are four key factors.

1. A Quick and Simple Pathway to U.S. Permanent Residency

U.S. immigration is almost never quick or easy. That said, an EB5 investment offers a quicker, easier way to obtain a green card than most paths available to investors. Even though United States Citizenship and Immigration Services (USCIS) has processed EB-5 applications notoriously slowly since 2019, indications are positive that new legislation and new leadership may soon restore processing times to their originally intended lengths, taking processing from a matter of years to months. For example, the proposed U.S. Citizenship Act of 2021, if passed, would enact measures toward clearing up the long backlogs in the EB-5 program and other USCIS programs.

As of July 2021, those making EB-5 investments from China face backlogs, but investors from other countries do not. Thus, depending on USCIS processing productivity, most EB-5 investors could see their I-526 petition approved in just months. Following I-526 approval, EB-5 investors may schedule a visa interview at their local U.S. embassy or consulate, if they are living abroad, or submit Form I-485 to adjust their immigration status, if they are already in the United States on a different visa.

2. Green Cards for the Whole Family

The EB-5 program is a family-friendly program—principal investors are allowed to include their spouse and unmarried children younger than 21 on their EB-5 application. Assuming the EB-5 investment is successful, the entire family is eligible for EB-5 visas, meaning family members obtain access to a permanent life in the United States at the same time as the investor, avoiding delays that might be associated with other programs. There is no limit to the number of children an investor can add, as long as they are all unmarried and younger than 21.

3. A Bright Future for Your Kids

In many cases, foreign nationals engage in EB-5 investments not necessarily to secure benefits for themselves but to provide a better future for their children. School-aged children who hold green cards can be enrolled in U.S. public schools, which provide a high-quality, holistic education that doubles as linguistic and cultural immersion for immigrants. College-aged green card holders enjoy a much less competitive admissions process to U.S. post-secondary education institutes, as they are considered alongside U.S. citizens, not international students, and they may be eligible for in-state tuition savings, depending on their school.

Education is not the only benefit—foreign nationals who make an EB5 investment are also securing a better health care landscape for their family, as well as economic and political stability. U.S. medical facilities are the most technologically advanced in the world, sometimes offering treatments not available elsewhere, and Americans enjoy a high quality of life with strong economic and political institutions. In this way, EB-5 investors can protect their children from potentially volatile situations in their home country, providing an environment for them to thrive.

4. Access to the World’s Largest Economy

The United States dominates the global economy, commanding the largest economy in the world. Though the devastating COVID-19 pandemic has set the entire world back, the U.S. economy is recovering steadily and is forecast to return to pre-pandemic levels by summer 2021. The United States’ economic growth following the destruction of COVID-19 has been phenomenal, indicative of a strong, resourceful economy that can shoulder major challenges like the worldwide shutdowns enacted in response to the pandemic. A green card lets a foreign national freely take employment anywhere in the United States, tapping into this valuable economy. In fact, EB-5 investors can live and work anywhere in the United States upon receiving their two-year conditional permanent residency rights, and in most cases, investors can earn passive income from their EB5 investment.

Since 1990, the EB-5 investment program has made it possible for foreign nationals to relocate to the United States by investing in qualifying businesses. Foreign nationals who make a successful EB-5 investment are given a green card and can even apply for citizenship after holding permanent resident status for five years. Of course, the EB-5 investment industry is not only good for investors—since each EB-5 investment must generate at least 10 jobs, the U.S. economy also benefits from this much-needed source of capital.

The EB-5 program is also popular because of the flexibility that it grants to investors: foreign nationals from any country can participate, and their family members are also entitled to receive permanent resident status. In addition, United States Citizenship and Immigration Services (USCIS) allows investors to use a wide variety of sources of funds to obtain EB-5 capital.

USCIS is also flexible regarding the way EB-5 investments are made. In some cases, foreign nationals are not required to provide all of the EB5 investment capital right away—instead, they can make what is known as a partial or installment investment.

How Partial Investments Work

A partial EB-5 investment occurs when a foreign national makes an initial investment and later provides the rest of the funds in installments. After providing the initial funds, the investor will be given a set period (usually 6 to 12 months) to contribute the rest of the EB-5 capital.

The investor must give the EB-5 project a promissory note with a pledged security interest in assets worth at least as much as the amount of capital that will be paid in installments. The EB-5 project that holds this promissory note will have an enforceable lien on the investor’s pledged asset(s). Therefore, if the investor fails to provide the needed capital within the agreed period, the EB-5 project will be able to liquidate the pledged asset(s) and receive the promised funds.

USCIS allows partial investments because they constitute an irrevocable commitment of the EB-5 funds. The USCIS Policy Manual states that EB-5 investors “must document the path of the funds to establish that the investment was made, or is actively in the process of being made, with the immigrant investor’s own funds.” In light of this policy, partial investments are considered as “actively in the process of being made.”

Still, USCIS carefully examines partial EB-5 investments to make sure that the pledged funds will indeed be provided within the approved period. Therefore, investors must document the terms of their partial investment in great detail when they file Form I-526E and submit other documents to USCIS. It is especially important to prove that the lien is enforceable by the promissory note holder—doing so indicates that the EB-5 investment funds have been irrevocably committed to the project.

A Hypothetical Example of a Partial EB-5 Investment

In practice, how could a foreign national make a partial EB-5 investment? Suppose that a potential investor only has $300,000 to invest. The minimum EB5 investment amount for targeted employment area (TEA) projects is $800,000, so the investor would need an extra $500,000 to make an investment. However, he has the means to provide the $500,000 in installments. The investor also owns a liquid asset: a hotel property that has a market value of more than $500,000. The investor controls 100% of the hotel’s equity.

Now, the investor can make an EB-5 investment of $300,000 and provide a promissory note for $500,000 with a pledged security interest in the hotel. Through the promissory note, the EB-5 project will have an enforceable lien on the hotel. Of course, an independent report will have to prove that the hotel property is worth at least $500,000.

The investor will be given a period of 6 to 12 months to pay the remaining $500,000 in installments. If he fails to do so, the EB-5 project will be able to enforce the lien against the hotel.

To help guide EB-5 visa applicants through the partial investment process, EB5AN and Beshara Global Migration Law Firm presented a joint webinar explaining how to make a partial EB-5 investment. Download the presentation below or watch the webinar on YouTube to learn more about partial investments.

Why Make a Partial EB-5 Investment?

If an EB-5 investor cannot invest the full amount of $800,000 straightaway, making a partial investment and then completing the investment amount in installments can avoid unnecessary delays in the immigration process. The investor and their dependent family members may be able to relocate to the United States sooner through a partial investment.

Moreover, under the EB-5 Reform and Integrity Act of 2022, EB-5 investors who already live in the United States under a non-immigrant visa can now file the I-526E and I-485 petitions concurrently. Since Form I-485 is used by EB-5 investors to adjust their immigration status, filing the petitions concurrently can allow investors to change their status to “pending adjustment” and apply for employment authorization.

EB-5 investors who file forms I-485 and I-526E concurrently may be able to obtain employment authorization in six months—or less. This provision can also be useful to investors whose non-immigrant visas are nearing expiration.

EB-5 investors who hold non-immigrant visas such as the H-1B, L-1, E-2, F-1, and TN categories may consider making a partial investment.

Wohali Utah: An Institutional-Quality EB-5 Project Accepting Partial Investment

EB5AN is currently accepting partial investments in its Wohali Utah project near Park City, Utah. This residential golf community in a scenic natural location offers EB-5 investors high chances of immigration and financial success: more than 300 EB-5-compliant jobs have already been created, and EB-5 investors in Wohali Utah will receive job creation and I-526E approval refund guaranties. In addition, the Wohali Utah development follows a proven and profitable business model in the housing sector.

Wohali Utah’s designation as a rural TEA puts investors in line for set-aside EB-5 visas, which can remove years-long delays in the immigration process for investors from countries with an EB-5 visa backlog. Investors will also receive priority processing of Form I-526E.

For more information on how to make a partial investment in Wohali Utah, or for further information on partial EB-5 investments, please schedule a call with EB5AN. Partial EB-5 investment can accelerate the EB-5 immigration process and help EB-5 investors relocate to the United States sooner than would otherwise be possible.

The EB-5 Immigrant Investor Program renders invaluable assistance to the U.S. economy by providing local businesses with much-needed EB-5 investment capital. Due to the thorough source-of-funds evaluations carried out by United States Citizenship and Immigration Services (USCIS), project developers can be sure that their EB-5 investment funds were sourced legally by qualifying foreign nationals.

Despite the massive success of the EB-5 program and the thousands of foreign nationals that have obtained permanent resident status through it, the EB-5 investment industry has been subject to ever-changing government regulations. This has been particularly true since November 2019, when the controversial EB-5 Modernization Rule came into effect. To the disappointment of most industry members, the Modernization Rule significantly raised the required minimum investment amounts.

June 2021 was an even more volatile period for the EB-5 program. On June 22, the U.S. District Court of the Northern District of California ruled that the Modernization Rule had been implemented improperly by the Department of Homeland Security (DHS), thereby invalidating the higher investment amounts. As the EB-5 program returned to its pre-November 2019 status, investors and project developers alike celebrated the court’s ruling. However, another abrupt change to the EB-5 industry came shortly afterward: on June 30, the regional center program expired because the Senate had failed to pass a critically important EB-5 reform bill. The regional center program and the Modernization Rule could potentially be reauthorized in the future, but it is unclear if or when this will happen.

These cataclysmic events in the EB-5 investment industry have changed the way investors and project developers operate. As of June 2021, investors can only make direct EB-5 investments due to the suspension of the regional center program. Direct EB-5 investments have been a part of the EB-5 program since its beginning in 1990, and they will likely experience a surge in popularity.

Advantages of Making a Direct EB-5 Investment

When compared to regional center investments, direct projects usually offer investors more control over how their EB-5 investment capital will be used. Therefore, foreign nationals who are looking to gain significant profits through the EB-5 program as well as permanent resident status often choose to invest directly. Further, direct EB-5 projects are allowed to receive investments at the reduced amounts of $500,000 for targeted employment area (TEA) projects and $1,000,000 for non-TEA projects.

Perhaps the greatest benefit direct investments offer is their stability—unlike the regional center program, the direct EB-5 investment industry does not depend on periodic government reauthorization. In light of the events that transpired in June 2021, many foreign nationals will likely opt for the stability of direct investments.

Requirements for Direct EB-5 Investments

A successful direct EB-5 investment must fulfill all the basic requirements of the EB-5 program—the investment must be made to a qualifying new commercial enterprise (NCE), create or preserve at least 10 full-time jobs, and use legally sourced funds. The principal difference between direct and regional center EB-5 investments is that the former are made directly to the NCE in question and not through a regional center.

Moreover, foreign nationals who make a direct EB5 investment must fulfill strict job creation requirements. Direct EB-5 projects are not allowed to count indirect or induced employment toward creating the needed jobs. Rather, the NCE must create 10 full-time jobs directly, and these positions must appear on the project’s payroll. Jobs created by a direct EB5 investment must last for a minimum of two years and be filled by qualifying U.S. workers.

Foreign nationals interested in making a direct EB-5 investment have many options. Direct investors often choose to work with technology, infrastructure, hospitality, or construction projects. Despite the wide variety of EB-5 projects available, investors should carry out thorough research on each project to ensure its legitimacy and verify that it will be able to create the needed jobs. EB5AN has a 100% I-526 and I-924 approval rate, offering some of the most reliable projects in the EB5 investment industry.