The EB-5 visa program operates on an annual cycle from October 1 to September 30, known as the Fiscal Year (FY). To keep all immigration stakeholders informed, the U.S. Department of State (DOS) releases monthly and yearly reports showing the EB-5 market’s status.

By understanding and analyzing up-to-date EB-5 data, applicants can stay ahead of EB-5 visa quota insights and other policy changes. These insights enable them to make strategic decisions, avoid expensive mistakes, and potentially shorten EB-5 wait times.

EB-5 applicants can stay informed by consulting reliable sources such as the monthly visa bulletin, the official website of the United States Citizenship and Immigration Services (USCIS), and the EB5AN blog for the latest developments in the program.

In this article, we will look at the available data for FY 2024 so far, and compare it with the previous fiscal year.

EB-5 Visa Availability and Issuance in FY 2024

March 31 marked the end of the first half of FY 2024, and the data from these six months is rather positive. The Department of State’s monthly immigrant visa issuance statistics data shows an impressive increase in visa issuance rates by consular processing in FY 2024, namely a year-over-year increase of 64%. The number of visas issued each month in FY 2024 surpasses the number issued in the corresponding months in FY 2023, except for November.

Below, we will analyze availability and issuance in FY 2024 concerning the different EB-5 categories and countries.

Unreserved Visas

The National Visa Center (NVC) waiting list revealed that nearly 39,900 registered EB-5 applicants were awaiting visa issuance. For FY 2024, the number of available unreserved visas is 14,169, an unusually high number. DOS data indicates that 5,070 of the 14,169 unreserved visas have been issued between October 2023 and March 2024. So far, only 36% of available visa numbers have been used through consular processing in the first six months of FY 2024.

In this category, Chinese nationals received 2,767 visas, which is 54.58% of total visas issued, representing the largest portion of EB-5 investors.

Vietnamese nationals are the second-largest group, with 1,326 visas issued, making up 26.15% of the total.

Indian nationals are third in line, accounting for 9% of the visas issued in the first six months of FY 2024, with 440 visas issued through consular processing. However, many Indian EB-5 investors typically receive their Green Cards through adjustment of status in the U.S., so more comprehensive data is needed to evaluate the overall EB-5 visa issuance for Indian nationals.

Reserved Visas

Reserved visas are set aside for rural, high unemployment, and infrastructure projects. This year’s number of available reserved visas is 8,136, and so far, they have not been used.

As of the May 2024 visa bulletin, all reserved EB-5 visa categories are current for all countries. Foreign nationals who intend to apply for the EB-5 visa program can bypass the lengthy wait in the unreserved visa queue by investing in projects that qualify for these set-aside visas.

Investors in rural EB-5 projects can speed up their Green Card process even more, as USCIS applies the priority processing approach to rural I-526E petitions.

However, recent data suggests potential upcoming backlogs in reserved categories, so investors are advised to submit their applications soon to benefit from this opportunity.

Launch Your EB-5 Journey With EB5AN

The outlook for the EB-5 program in FY 2024 is positive. However, tens of thousands of applicants with approved I-526E petitions are still waiting for their visa numbers. If all available visas for FY 2024 are used, the current EB-5 waitlist could be reduced by 36% by the end of the fiscal year. Therefore, the efficiency of U.S. Consular Offices in processing EB-5 visas is crucial for reducing the current visa backlog for pre-RIA EB-5 investors.

For new investors, selecting the right timing, team, and project is key. Potential EB-5 investors should seek expert advice to make the best decisions that align with their financial and immigration goals.

That’s where EB5AN comes in. We have helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. Our key advantage is our personalized approach, where we offer customized services that meet the specific needs of each investor.

To find out how we can help you and your family obtain U.S. Green Cards, please schedule a free consultation with our expert team today.

The EB-5 Immigrant Investor Program is a popular pathway for foreign nationals to obtain permanent residence in the U.S. In addition to receiving a Green Card, EB-5 applicants strive to earn profitable returns on their investments.

As a result, thorough financial planning is required, especially regarding capital funding and the financial sustainability of the investment.

Gaining permanent residence is the primary motivation of many EB-5 applicants. This sometimes makes them focus on complying with the EB-5 regulatory requirements and neglecting financial viability considerations. This approach is risky because understanding a project’s capital stack can be crucial for applicants to predict their investment’s performance, make informed decisions, and safeguard their capital.

In this post, we will explain the different types of EB-5 financial structuring and the factors investors need to consider while selecting a low-risk EB-5 project.

What Are the Different Types of EB-5 Financial Structuring?

The EB-5 financial structuring refers to the different layers of funding that make up the total investment in an EB-5 project. The financial structuring for direct investments is pretty basic, as it involves just one EB-5 investor. However, financial structuring for regional center EB-5 investments is more complex.

Typically, regional center investors have four types of financial structures to choose from, as well as combinations between them: senior debt, mezzanine debt, preferred equity, and common equity. Here’s a breakdown of the four layers of the EB-5 capital stack:

Senior Debt

Senior debt is a type of loan injected into an investment in exchange for interest payments. In most cases, the senior debt forms the largest percentage of the EB-5 capital stack, with lenders given the highest priority for repayment. This ensures that senior debt lenders receive their interest/dividends before all other investors in the project, making it the most secure type of financial structuring.

While senior debts are less risky, the profit realized from this type of funding is limited to an agreed fixed interest rate. In other words, the return on investment from senior debts is significantly less than the profits from other forms of funding.

EB-5 senior debt holders usually secure their loans either through a first-lien mortgage on real estate or a repayment guarantee. These measures help minimize the risk of financial loss.

Mezzanine Debt

Similar to senior debt, mezzanine debt starts as a loan. However, if the project fails, mezzanine debt holders may convert their loans to ownership interests. Therefore, it is accurate to say that this type of financial structuring is a middle ground between regular loans and equity-based investments.

After the senior debt is paid, mezzanine debt holders are next in line to receive their returns. If the developers fail to meet their obligations, mezzanine debt holders can claim ownership interests.

When an investment project becomes unstable, most EB-5 regional centers prefer to extend the project developer’s deadline rather than assume ownership interests. This approach helps them avoid the financial burden of taking over the project.

Mezzanine debt is mostly preferred because it offers higher returns than senior debt and has a higher priority over equity shareholders in the event of project failure.

Preferred Equity

Preferred equity is a type of investment in which investors get paid before common equity investors but after all debts are settled. A major advantage of preferred equity is that it yields higher returns compared to senior and mezzanine debt. Additionally, if the investment is unsuccessful, preferred equity investors have a better claim on assets than common equity investors, though still subordinate to debt holders.

Common Equity

Common equity investors bear the most risk because they receive their profits after every other investor. Often, there are no assets left for them if the investment fails, resulting in a total loss.

On the other hand, if an investment is successful, common equity investors usually gain significant profits. EB-5 investors with a high risk tolerance are best suited for this type of financial structuring.

Common equity in a project typically consists of various classes or shares among partners, leading to a wide range of terms regarding profit-sharing and capital repayment. It is important to carefully review the offering documents to understand the dividend and capital repayment priorities.

What Factors Should an EB-5 Investor Consider?

EB-5 applicants select their projects based on several factors. These include their risk appetite, investment objectives, and the regional center management they collaborate with. Let’s discuss them briefly.

Risk Tolerance

Under each type of financial structuring, the element of risk is highlighted because an investor’s appetite for risk is a key consideration when selecting a viable EB-5 financial structure. Investors who can handle the uncertainty that comes with riskier investments are welcome to choose equity-based capital funding. In contrast, risk-averse investors are advised to select debt-based capital funding.

Investment Goals

EB-5 investments are unique because investors and other project stakeholders must consider both their immigration and financial objectives. This is why investors should evaluate whether the financial structure they have chosen will support all their goals.

Management Capability

Aside from a specific project’s capital stack, the EB-5 regional center’s experience and expertise are also critical factors. As a result, EB-5 investors should look for regional centers with a track record of completing EB-5 investment projects. Organization, good project oversight, and the overall operational expertise of an EB-5 regional center heavily influence the likelihood of the project’s success.

Get Reliable Advice From Industry Experts at EB5AN

While it is important for EB-5 applicants to understand the basics of financial structuring, the financial aspects of EB-5 investments still require expert judgment. As such, working with an experienced EB-5 team will facilitate important financial due diligence functions such as risk assessment.

EB5AN has helped over 2,300 foreign nationals from around the world get EB-5 visas. Book a free consultation with our expert team to learn how we can assist you in finding the right project for your EB-5 investment.

International students in the U.S. under the F-1 visa can start applying for their Green Cards while still studying. While there are several pathways for changing immigration status from F-1 student to Green Card holder, the EB-5 visa remains one of the easiest and fastest routes.

In this article, we’ll discuss how you can initiate the process of adjusting status from an F-1 visa holder to a Green Card holder while still studying. But first, let’s look at the limitations of the F-1 visa.

F-1 Visa and Its Limitations

The F-1 student visa is a single-intent nonimmigrant visa that allows foreign nationals to pursue full-time studies in the U.S.

To qualify, intending foreign students must be enrolled in an approved U.S. institution for a full-time certificate, diploma, or degree-awarding course/program. They must also prove that they plan to return to their home country upon completing their studies.

While a proven intention to leave the U.S. after your studies is central to qualifying for an F-1 visa, there are pathways to becoming a U.S. permanent resident if you decide to stay.

Options for F-1 Students to Obtain a Green Card

Although the F-1 visa is a nonimmigrant visa, F-1 visa holders who wish to remain in the U.S. after their studies can do so by switching to other routes. Foreign U.S. students can extend their stay and possibly obtain a Green Card by:

• Adjusting to a dual-intent visa like H-1B—potentially through Optional Practical Training (OPT) or Curriculum Practical Training (CPT).
• Self-petitioning for an EB-1 exceptional ability visa.
• Receiving employer sponsorship for an EB-2 or EB-3 visa.
• Marrying a U.S. citizen or permanent resident.
• Applying for an EB-5 investor visa.

While all the above pathways can eventually lead to permanent residency in the U.S., only the EB-1 extraordinary ability visa and EB-5 investor visa are direct employment-based routes to lawful permanent resident status.

Although the EB-1 visa offers a direct pathway to obtaining a Green Card, the requirements are stringent. Only a small percentage of international students can meet the criteria, and the burden of proving eligibility lies solely on the petitioner.

The EB-5 investor program offers a less competitive and faster pathway for immigrant students to obtain a Green Card in the U.S. Thanks to the EB-5 Reform and Integrity Act of 2022 (RIA), foreign students can apply directly for an EB-5 investor visa and Green Card while still studying. We will explore more about the RIA below, after taking a quick look at the EB-5 visa and its requirements.

EB-5 Investor Visa: A Faster Pathway to Permanent Residency

The EB-5 program offers U.S. permanent residency to foreign nationals in exchange for their investment in a U.S. business. The U.S. Congress introduced the program in 1990 to attract capital investments from foreign nationals as a means of creating jobs and boosting the U.S. economy.

The United States Citizenship and Immigration Services (USCIS) administers the EB-5 program. An eligible investor will receive permanent residency together with their spouse and unmarried children under 21 years old.

To qualify for the EB-5 visa, an investor must:

• Invest a minimum of $800,000 or $1,050,000 (depending on the investment location) in a new commercial enterprise.
• Create jobs for at least ten qualified U.S. workers.

With a minimum investment of $800,000, targeted employment area (TEA) investments are more advantageous for investors. The investment threshold is lower because the U.S. government wants to attract more investment to these regions to foster rural development and combat high unemployment rates.

Investing in TEAs is the fastest way to get an EB-5 Green Card because such investments are eligible for set-aside visas.

The set-aside visas are part of the provisions of the RIA. It reserves 32% of the yearly quota of EB-5 visas for investment in TEAs broken down into:

• 20% for rural area investments.
• 10% for high-unemployment area investments.
• 2% for designated infrastructure projects.

Investing in TEAs means avoiding the backlog in unreserved categories and skipping the long waiting time.

The Cost of an EB-5 Green Card for International Students

Aside from the minimum investment requirements mentioned above, EB-5 investors may face other expenses, such as petition filing fees, administrative fees, and legal guidance costs. Altogether, the EB-5 visa may seem quite expensive for students who aren’t established entrepreneurs.

However, considering the cost of schooling in the U.S. without a scholarship and the endless possibilities that obtaining a Green Card through an EB-5 visa presents, it may not be as expensive as it looks.

International students pursuing a degree without a grant typically spend between $300,000 and $500,000 during their studies. Those who choose to remain in the U.S. often face difficulty finding gainful employment after their studies because they don’t have a Green Card or work permit.

After investing so much in getting an education, being unable to find work can be frustrating, and many may be forced to return to their home countries. An investment of $800,000 to secure their future in the U.S. could be worth the price. For those who can afford it, it’s also the best graduation gift parents of international students can give their children.

Moving From F-1 Student Status to EB-5 Green Card Holder

The RIA provided a concurrent filing option that enables applicants who are already in the U.S. in valid nonimmigrant status to submit their immigrant petitions and adjustment of status applications at the same time. This allows F-1 visa holders to apply for an EB-5 visa before completing their studies, and remain in the U.S. after graduation without accumulating unlawful presence until they get their Green Cards.

The concurrent filing option allows F-1 students to file four petitions simultaneously, namely:

• Form I-526E – Immigrant Petition by Regional Center Investor (EB-5 visa application).
• Form I-485 – Application to Register Permanent Residence or Adjust Status (Green Card application).
• Form I-765 – Application for Employment Authorization Document (work permit application).
• Form I-131 – Application for Travel Document (travel permit application).

F-1 students will not need employer sponsorship to remain in the U.S. at the end of their studies by filing these four petitions concurrently. They’ll be able to work anywhere they choose, including being self-employed.

If you invest in a regional center-sponsored project, you won’t have to be involved in running the enterprise you invested in.

While you can technically file an EB-5 petition yourself, it’s best to engage the services of an experienced immigration attorney for a smooth and error-free process.

Benefits of Pursuing an EB-5 Visa While Still Studying

Students who file for an EB-5 visa from inside the U.S. enjoy several benefits when compared to foreign nationals who pursue other visas, or investors who apply through consular processing. Some of these include:

• EB-5 adjustment of status is one of the fastest ways to become a U.S. permanent resident. You’ll have the legal right to remain in the U.S. upon completing your studies as your Form I-485 is being processed.
• An EB-5 status gives you equal footing to compete in the job market.
• You won’t need employer sponsorship to live and work in the U.S., and you can pursue your interests, including self-employment.
• By acting fast and applying while you’re studying, you get to lock in an early priority date.
• Your application covers your spouse and any dependent children.
• It’s a fast-track route to U.S. citizenship. You can apply for citizenship after five years of permanent residency, which includes the two-year conditional permanent residency period.
• You can sponsor other eligible family members, such as your parents, to join you in the U.S. once you obtain citizenship.

EB5AN Can Help You Secure Your Future in the U.S.

Immigration applications are generally complex and require lots of documentation and adherence to certain rules. A slight mistake can cost you the opportunity to become a legal U.S. resident. It’s even more so for the EB-5 investor visa with its due diligence and source-of-funds requirements.

Getting expert assistance when filing an immigrant petition is essential for eliminating errors and reducing the chances of rejection. As an F-1 visa holder, you should consult with an immigration attorney before making the transition.

The EB5AN team would be happy to assist you throughout your Green Card process. We have helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents.

Please book a free one-on-one call with our team today to learn more about your options.

Although yearly applications for the EB-5 Immigrant Investor Program have increased significantly, there is only a limited number of available EB-5 visas per year. This has historically caused processing delays and EB-5 visa retrogression.

The United States Citizenship and Immigration Services (USCIS) Immigrant Investor Program Office (IPO) determines visa availability monthly by reviewing the Department of State’s Monthly Visa Bulletin. The office has typically prioritized petitions of investors for whom a visa is immediately available, or soon will be. To understand this, foreign nationals should look at the most recent visa bulletin and see if their birth country is listed “current” in their specific visa category.

In 2022, the EB-5 Reform and Integrity Act (RIA) introduced new EB-5 visa categories alongside other beneficial provisions, changing how EB-5 visa availability is calculated. With these new visa categories that are in “current” status as of May 2024, investors can strategically choose projects that increase their chances of obtaining U.S. permanent residency.

In this article, you will learn about EB-5 visa availability, including various factors affecting it and the right strategies to avoid long processing times.

What Factors Affect EB-5 Visa Availability?

From visa backlogs to processing delays, we have highlighted below some general factors affecting EB-5 visa availability.

Per Country Limit and Visa Backlogs

The U.S. Immigration and Nationality Act (INA) provides that no single country may take up more than 7% of the total visas allotted in a year. This leaves about 10,000 visas available for EB-5 applicants yearly, a limit that is reached quickly, given the program’s popularity.

The Department of State (DOS) and USCIS stop granting EB-5 visas once a particular country reaches its annual cap. Consequently, applicants who cannot receive their visas in the year they applied will be transferred to the following year, creating a backlog in the visa allocation system.

Backlogs prolong the EB-5 processing times and reduce efficiency in the coming year since backlogged investors are attended to first before newer applicants are addressed.

EB-5 Visa Carryovers

Aside from the U.S. government’s annual cap, unused visas may be carried over across different categories. This way, DOS can manage the supply of visas, reduce visa backlogs, and potentially increase visa availability for EB-5 applicants.

Under the RIA, new provisions for visa carryover in the reserved categories were introduced. According to these provisions, unused reserved visas from the previous fiscal year are rolled over to the current fiscal year within the same category. If these carryover visas are still not used within that fiscal year, they are then added to the unreserved visa numbers.

For example, reserved visas from FY 2022 were carried over to FY 2023. Since FY 2023’s reserved visas also went unused, they rolled over to FY 2024. This resulted in an unusually high number of EB-5 visas being available in FY 2024, including those in the unreserved category. If governmental bodies and embassies in retrogressed countries can process these available visas efficiently, this relatively new EB-5 visa carryover policy may also help ease current backlogs, so investors should follow these rolled over visa numbers closely.

Processing Delays

USCIS and other governmental agencies may sometimes face administrative challenges, such as staffing issues, which may delay processing, further prolonging the EB-5 process.

Such delays may alter important dates, making it difficult for investors to plan their EB-5 journey. Additionally, increased waiting times can result in backlogs, affecting the overall availability of visas as many applicants will now receive their visas later than expected.

Legislative Changes

New immigration legislation and adjustments to the EB-5 program can either drive or reduce demand for EB-5 visas. For instance, the introduction of the Regional Center Program back in 1993 encouraged a lot of foreign nationals to opt for the EB-5 pathway to permanent residence in the U.S.

A similar situation happened after the enactment of the RIA, with the new set-aside visas offering unique opportunities to investors from traditionally backlogged countries like China and India.

Theoretically, policy updates and systemic changes such as technology upgrades, streamlined procedures, and improved staffing could increase USCIS’s capacity and the overall efficiency of the EB-5 program. Such changes would likely result in more effective EB-5 visa management, reducing backlog and increasing EB-5 visa availability for investors.

How Can EB-5 Investors Estimate Visa Availability?

Investors who applied for an EB-5 visa before the RIA should follow monthly bulletins under their relevant categories to see how their priority dates (date when they filed their I-526E petition) correspond to final action dates.

Foreign nationals planning to place a new application can also predict visa availability in several ways. These include:

Visa Bulletin

The visa bulletin is the most accurate source of information on EB-5 visa availability. The DOS releases monthly updates via the bulletin, showing important dates such as final action dates (date when a Green Card can be issued) and dates for filing (date when foreign nationals can apply for a Green Card with the National Visa Center.) Monitoring any updates in these charts helps EB-5 stakeholders understand the current situation and predict upcoming changes.

Foreign investors who need to estimate the most favorable time to apply for the EB-5 visa can seek guidance from EB-5 experts to correctly analyze the visa bulletin and act accordingly depending on their specific circumstances.

EB-5 Historical Trends

Tracing historical records on the issuance of the EB-5 visa can help estimate visa availability in a given year. By analyzing past years’ trends, investors can identify seasonal fluctuations, policy adjustments, and other factors that impact visa availability.

Sources that could aid your analysis include the visa bulletin and DOS’s monthly reports on application volumes and approval rates. By studying accurate EB-5 historical trends, investors can anticipate how future changes may affect their immigration process.

Webinars and Informational Content

Information sessions and webinars provide valuable learning opportunities for foreign nationals applying for EB-5 visas. At such events, various EB-5 experts, such as immigration attorneys and investment advisors, offer in-depth insights into the EB-5 visa.

Investors can also follow reliable industry sources closely to stay informed about any important developments. EB5AN covers many relevant topics on its website, including recent immigration policy updates, program regulation changes, visa availability observations and trends, litigation, and successful EB-5 process navigation strategies.

How Can EB-5 Applicants Reduce Their Wait Times?

The factors that influence EB-5 visa availability are mostly outside the investor’s control. Still, EB-5 applicants must do due diligence to prevent delays in their EB-5 visa process and reduce wait times. Some strategies that may shorten the EB-5 process are:

Submit Complete and Correct Documents

EB-5 applicants must ensure that all the documents required for the immigration process are readily available. Submitting wrong or incomplete documents to USCIS can result in significant setbacks for applicants, prolonging the EB-5 timeline.

Invest in Target Employment Area (TEA) Projects

TEA projects are situated in areas with higher unemployment rates or economic needs, making job creation a primary focus. As a result, the U.S. government incentivizes investment in these areas by providing additional visa availability, a lowered minimum investment amount, and priority processing in the case of rural EB-5 projects.

Choose a Reputable Regional Center

Proper research is necessary when choosing a regional center to manage EB-5 investment. Thorough research involves examining the regional center’s portfolio of past projects and their outcomes before judging its credibility and competence.

Applicants should select regional centers with a track record of successful EB-5 projects. These regional centers should have I-956F approvals from USCIS for each project. The purpose of this form is to provide USCIS with the necessary information to fully understand the EB-5 offering. USCIS uses Form I-956F to collect essential details about an EB-5 project and to determine its compliance with the EB-5 program.

When you file Form I-526E to apply for an EB-5 Green Card, USCIS evaluates your petition based on the project’s compliance with EB-5 requirements and your personal eligibility. If your EB-5 project has already received Form I-956F approval, USCIS has confirmed its compliance and won’t need to review the project again. Since it has already been vetted, USCIS may process your petition more quickly.

Begin Your EB-5 Journey With EB5AN

Obtaining an EB-5 visa involves multiple stages, each with its own intricacies. Commonly used sources like the State Department’s visa bulletin may seem confusing at first glance, but this is where seasoned industry experts come in.

EB5AN has successfully facilitated the EB-5 processes of over 2,300 families worldwide. We understand that every applicant’s circumstance is unique, and we are committed to providing personalized services for our clients.

To better understand the dynamics of the EB-5 program, schedule a free call today and learn how we can assist you with your EB-5 journey.

Administered by the U.S. Citizenship and Immigration Services (USCIS), the EB-5 Immigrant Investor Program is an invaluable resource for qualified foreign investors seeking permanent residency in the United States by taking part in strategic investment opportunities.

While personal funds constitute a significant portion of all EB-5 investments, many EB-5 investors have turned to loans to explore new ways of accessing capital.

In this article, we will provide some tips on managing risk and maximizing chances of success, as well as several strategies EB-5 investors can employ to strategically fund their investments using loan proceeds.

Summary of the EB-5 Visa Program

The EB-5 visa program is a United States immigration program that allows foreign investors to make a significant capital investment in the U.S. in exchange for permanent residency.

Established by the Immigration Act of 1990, the program’s goal is to spur job creation for U.S. workers and invest substantial capital in underrepresented regions needing economic growth.

The types of investments foreign nationals can make include direct investments and investments in regional center projects.

Direct investments involve EB-5 investors injecting capital directly into a new business to create at least 10 full-time jobs for qualifying U.S. workers.

Regional center projects designated by USCIS focus on promoting economic growth in underdeveloped geographic regions, with funds from EB-5 investors required to create jobs, develop real estate, and foster other regional growth opportunities.

How to Use Loan Proceeds for EB-5 Investments

While investing capital into a project, EB-5 investors have several financing options, including using loan proceeds. Let’s explore several aspects of this option.

Can a Loan Be Used to Fund an EB-5 Investment?

Yes, a loan can be used to fund an EB-5 investment. EB-5 investors can take out different types of loans, such as personal loans (based on one’s credit score and assets), collateralized loans (backed by investments), and co-signer/guarantor loans.

However, it’s essential to remember that EB-5 investments are considered “at-risk,” meaning failure to comply with the program’s terms, such as creating the minimum number of jobs or meeting other specifications, can result in investment loss. This means any secured loan cannot be secured by the EB-5 investment itself. It needs to be secured by the investor’s personal assets, and the source of the funds used to purchase the asset needs to be lawful.

Though less common, EB-5 investors can also use unsecured loans, while paying additional attention to providing a comprehensive paper trail. More about unsecured loans will be covered below.

A Word on Zhang vs. USCIS

Between 2015 and 2020, USCIS temporarily stopped accepting unsecured loans. The agency decided that cash from unsecured loans should be classified as “indebtedness” rather than “cash.” As a result, many investors had their immigrant petitions denied.

When the I-526 petitions of two EB-5 investors, Zhang and Hagiwara, were denied due to their loans being classified as “indebtedness,” they challenged USCIS in court.

Zhang vs. USCIS then became one of the most important court cases in the history of the EB-5 program. After a long process that led up to the investors’ victory, in July 2021, USCIS announced that it would stop categorizing funds from unsecured loans as “indebtedness.”

Naturally, this case offered more clarity to prospective investors seeking to diversify their EB-5 financing options.

Understanding the Basics of Using Loan Proceeds

When planning to invest in the EB-5 Immigrant Investor Program, it’s essential to understand the loan terms and conditions. Here are some key factors to consider:

1. Investment Amount

The EB-5 program requires a minimum investment of $800,000 for projects in targeted employment areas (TEAs) and $1,050,000 for other areas. If you plan to use a loan, you need to ensure the source of the borrowed funds can be clearly documented.

2. Interest Rates

Interest rates on loans can vary widely based on the lender and market conditions. EB-5 investors should seek out loans with competitive, market-level interest rates.

3. Loan Duration

The length of the loan term will impact your repayment schedule and the total amount paid. Loan terms generally range from five to 20 years. It’s important to choose a term that fits your overall financial strategy.

4. Repayment Terms

Repayment options differ from loan to loan. Some may require monthly interest payments with a lump sum principal payment at the end of the term, while others offer a more gradual repayment plan throughout the loan term. Be sure to fully understand the repayment terms before finalizing your loan agreement.

Get Expert Support From EB5AN

Investing in an EB-5 project requires plenty of due diligence and carefully vetting all information provided by regional centers and the project stakeholders. When determining your EB-5 financing options, you should rely on only the most seasoned professionals with expertise in strategic EB-5 investments.

EB5AN has assisted more than 2,300 families from 60 countries, guiding them through the process of obtaining permanent residency with resounding success.

To learn more about the best ways to fund your EB-5 investment, book a free call with our expert team today.

Many foreign nationals plan on becoming lawful permanent residents in the U.S. with the hope that their spouse and children can benefit from a high quality of life, education, and increased career opportunities.

However, it can sometimes seem like a daunting—if not impossible—task when you review the numerous forms and timelines you must follow to find the best option for you and your family. Complex legal terms certainly don’t help, either.

What exactly does it mean to be a derivative beneficiary? Who qualifies as a derivative beneficiary of your EB-5 visa? Does a derivative beneficiary need to fill out the same forms as a principal applicant, at the same time? In this article, we’ll walk you through these questions and help you better understand how to succeed in securing Green Cards for your family.

What’s the Difference Between a Principal and a Derivative Beneficiary?

For EB-5 visa purposes, there are two main categories of beneficiaries: principal and derivative. The principal or primary beneficiary is the individual applying for the investment visa and making the required investment. They’re also known as the main or primary applicant.

In other words, the principal beneficiary is the person who applies for the EB-5 visa in the United States.

A derivative beneficiary is an individual who stands to benefit from the main applicant’s visa but who is not the one applying for an EB-5 visa. These beneficiaries usually include close family members, such as the spouse and children.

On a basic level, the main difference between the primary or principal beneficiary and the derivative beneficiary is their status. The principal beneficiary is also the main visa applicant, while the derivative beneficiary, as the name suggests, is someone who derives certain benefits as a result of the primary visa applicant.

Who Can Qualify as a Derivative Beneficiary for an EB-5 Visa?

As a general rule, the immediate relatives and dependents of the principal beneficiary are eligible to qualify as derivative beneficiaries. This includes the principal beneficiary’s spouse and any dependent, unmarried children under the age of 21.

Adopted children also qualify as long as they are under 21 and unmarried. However, relatives like the applicant’s siblings, aunts, uncles, parents, or grandparents are excluded.

Derivative beneficiaries only become eligible for the visa benefits after the principal beneficiary’s application is approved. Usually, if the principal beneficiary (the main applicant) qualifies for the program and is issued their EB-5 visa, all derivative beneficiaries should also be eligible.

It’s important to note—since this isn’t universal for investment visas—that applicants with same-sex legal partners or spouses are eligible to qualify as derivative beneficiaries. As long as the couple was married in a jurisdiction where same-sex marriage is legal, the primary applicant’s partner may qualify for these benefits. Also, any children legally under the care of a couple, whether biological or not, may qualify as derivative beneficiaries.

Who Does Not Qualify as a Derivative Beneficiary?

It’s much easier to summarize the limited categories of individuals who qualify as derivative beneficiaries than to give an extensive list of those who do not. As a general rule, EB-5 visa beneficiaries can only include immediate family. The issue with this terminology is in the details.

As mentioned above, “immediate family” does not include grandparents, parents, siblings, cousins, nieces, nephews, aunts, or uncles. However, there are some additional categories that may be less obvious.

For example, what constitutes a spouse? You may believe your common-law partner would qualify as a derivative beneficiary because you’ve been together for 12 years and have two kids, but the immigration authorities may not see it that way.

You must be legally married to your spouse in your home country for your partner to qualify as an EB-5 beneficiary. United States Citizenship and Immigration Services (USCIS) only recognizes legally married spouses.

However, if your home country does not recognize your union as a legally binding marriage, the U.S. government will not consider your partnership lawfully binding. Therefore, your spouse won’t qualify as a derivative beneficiary.

As for children, there are also special rules that apply.

As mentioned above, unmarried children under 21 can qualify as an EB-5 dependent. But what if you were unmarried when your parent applied for an EB-5 visa, but got married before the application was complete? Unfortunately, you would not qualify.

On the other hand, before the enactment of the Child Status Protection Act (CSPA), a big worry for EB-5 investors with children was that their kids would turn 21 and “age out” before their visa applications would be approved. Many children were aging out because of long processing delays, especially from backlogged countries. The act was passed to “freeze” a child’s age at the time their visa application is submitted, rather than when it’s adjudicated, to address this issue.

Due to intricacies like these concerning the eligibility of EB-5 derivate beneficiaries, it is highly recommended that foreign investors work with an experienced immigration attorney throughout the application process.

How to Apply for Derivative Status?

The very first step to acquiring a derivative visa is for the principal beneficiary to qualify for the EB-5 investor visa. Essentially, the derivative beneficiary or beneficiaries can’t begin claiming benefits or applying for permanent residency in the U.S. until after the main application and investment are made and approved.

The process is relatively similar for both the principal and derivative beneficiaries after making the initial investment and submitting the application.

The principal beneficiary must first apply for conditional permanent residency in the United States by completing and submitting Form I-526E, then Form I-485 to adjust status. Under the EB-5 Reform and Integrity Act of 2022 (RIA), eligible applicants who live in the U.S. can file these two forms concurrently.

Upon approval, the applicant obtains conditional permanent residency status in the U.S. that is valid for two years. As long as the conditions are met for the EB-5 visa, after two years, you can apply for permanent residency and have the conditions removed.

Then, if you desire, you can apply for citizenship after five years.

Derivative beneficiaries must also submit their own Form I-485 if they wish to pursue permanent residency. However, they have a few options regarding the timeframe in which they choose to submit the form.

Most commonly, EB-5 derivative beneficiaries file their Form I-485s at the same time as the principal applicant. This is usually the recommended method for a faster and smoother process.

However, derivatives can also file I-485 within six months after the principal applicant obtains permanent resident status. If they choose to file later than this, they must use the follow-to-join route. This principle applies to cases where a Green Card holder petitions to reunite with their dependent family members. An eligible family member may follow to join during the principal applicant’s two-year conditional residency period.

EB-5 Derivative Beneficiaries: FAQs

Can Divorced Couples Qualify as Derivative Beneficiaries?

If divorced before applying for conditional permanent residence, a principal beneficiary’s spouse will not be eligible to qualify as a derivative beneficiary. However, if the divorce occurs after acquiring conditional permanent residence status, it should not impact the spouse’s ability to proceed with the immigration process.

Can a Child Who’s Turning 21 Qualify as a Derivative Beneficiary?

Yes, but only if they follow a specified timeline. A child who turns 21 before filing Form I-526E is not eligible for an EB-5 visa as a derivative beneficiary. However, if they turn 21 after filing this form but before it is approved, they can still complete the process of becoming a derivative beneficiary. To do this, the child needs to start their adjustment of status (or consular processing) within a year after the I-526E is approved, so their age can remain “frozen” at the age when the form was initially filed.

What if I Need to Apply From Outside the United States?

The derivative beneficiary can apply for lawful permanent resident status outside the United States through consular processing. This entails applying through the local United States consulate in the country where you live. In special cases, dependents can also pursue follow-to-join, as explained above.

Dependents that are already in the U.S. in lawful status can adjust status from inside the country.

What Happens to Derivative Beneficiaries if the Principal Applicant Passes Away?

If the principal EB-5 applicant passes away during the two-year conditional permanent residency, their derivative beneficiaries can still remove conditions to become permanent residents (and eventually apply for U.S. citizenship.)

However, if the principal applicant dies before I-526E approval, their family members may need to withdraw their EB-5 application and re-file. There may be other options to pursue if the family members already reside in the U.S., so it’s best to consult an immigration attorney in these cases.

EB5AN Can Help Your Family Get Green Cards

Obtaining lawful permanent residence in the United States can be a complex process, where simple errors can impact your eligibility as a derivate beneficiary, delay your status, or affect your ability to remain in the U.S.

The good news is that you don’t have to do it all by yourself. EB5AN has helped over 2,300 families become lawful permanent residents in the United States through the EB-5 visa program, and we can do the same for you. Book a free call with our team today to start your family’s journey toward becoming U.S. Green Card holders.

The United States Citizenship and Immigration Services (USCIS) oversees the EB-5 Immigrant Investor Program. This program allows foreign individuals to invest in U.S. businesses and apply for Green Cards.

Investors can invest in a new commercial enterprise directly or via a regional center; this choice is entirely up to them. Within the EB-5 program, a regional center is an organization that USCIS designates to facilitate investments and help the local economy grow.

Audit of Regional Centers

Compliance reviews of regional centers have already been standard practice, but the EB-5 Reform and Integrity Act of 2022 (RIA) introduced a new audit requirement. USCIS made an announcement about this on April 9, 2024, and started the audit process on April 23.

The agency stated that “regional center audits enhance the integrity of the EB-5 program by helping us verify information in regional center applications and annual certifications as well as associated investor petitions.” This is to keep the EB-5 program trustworthy and ensure compliance with its rules. Under this provision, regional centers must be audited every five years.

USCIS’s Audit Process

The USCIS manages the audit process for each regional center on a case-by-case basis. Numerous factors can cause audit timelines to be different, such as the regional center’s average response time and any issues present in the audit processes.

Source: USCIS

Pre-Audit Intimation

USCIS sends an official notification letter to the selected regional center, initiating the audit process. The letter likely includes the audit’s scope and schedule. It also includes instructions on cooperating with the USCIS audit officials. This intimation ensures that the audit process goes smoothly.

In response to the USCIS’s request for an audit, the chosen EB-5 regional center needs to gather all the records needed by the INA. This includes everything from new and up-to-date financial records to ledgers.

During Audit

During these audits, USCIS checks the paperwork. They verify that investor funds go into the projects and evaluate how well the regional centers follow applicable laws. In addition, they conduct in-person interviews with the regional center’s management teams, staff, and other involved stakeholders. Besides assessing the regional center’s compliance with program requirements—such as creating jobs for U.S. workers—USCIS also looks at its capacity to attract and manage EB-5 investments.

Starting April 23, USCIS has standardized these evaluations. They use the Generally Accepted Government Auditing Standards (GAGAS), also known as the Yellow Book. These standards provide a method for conducting fair and thorough audits.

Auditors physically visit the regional centers to inspect them as part of the auditing process. If the regional center’s representative shows no interest in being present during an audit, USCIS can cancel the visit at any time. If this happens, USCIS will finish the audit report with the information they have access to, noting that the regional center asked for the site visit to be canceled. Moreover, a regional center can have its accreditation revoked if it does not cooperate with the audit or attempts to obstruct it.

Post-Audit

After an audit, USCIS sends a Notice of Audited Findings (NOAF) or a Notice of Intent to Terminate (NOIT) to the regional center. In these notices, USCIS explains what the audit revealed and gives the regional center a chance to respond to and settle any issues the agency raises.

The recently established EB-5 Regional Center Audits webpage provides detailed information regarding how regional centers can prepare for and participate in audits.

Findings of the Audit Process

As previously mentioned, the agency implemented the audit requirement in order to eliminate regional centers that do not adhere to the rules established by USCIS. By doing this, the U.S. government aims to protect foreign investors and the EB-5 program.

If the audit results are unfavorable for the regional center, this does not necessarily impact its designation status or the immigration procedures of foreign investors who have invested in projects the regional center has sponsored.

However, if a representative from a regional center refuses to follow the rules or tries to prevent USCIS from auditing its documents and operations, the agency will end the audit and write in its report that the regional center was not cooperative. The regional center may then lose its designation.

Stay Informed With EB5AN

It is essential that regional centers cooperate fully with USCIS throughout the audit process and take it seriously. Failure to comply with program requirements or to address issues raised during an audit could result in the termination of the regional center’s designation, which would have severe consequences for both the regional center and its investors.

By following audit requirements and staying transparent, regional centers can continue to attract foreign investors and support the integrity of the EB-5 program.

EB5AN owns over 10 EB-5 regional centers that cover the entire continental United States, and has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. We offer our clients first-rate, low-risk EB-5 regional center projects with a 100% USCIS project approval rate to date.

Book a free consultation with our team today to learn how we can help you through every step of the EB-5 process.

Every year, the U.S. government sets aside a specific number of visas for each immigrant visa category under the Immigration and Nationality Act (INA). However, not all visas in one category may be used within a year, while other categories may have surplus applications. When this happens, the U.S. Department of State (DOS) redistributes the unused visas by carrying them over to the following year, and across different categories in some cases.

EB-5 visa carryovers can significantly impact investors by increasing the total number of visas available. Consequently, EB-5 applicants may receive their visas earlier, and the U.S. Citizenship and Immigration Services (USCIS) can speed up the EB-5 process.

Ideally, once an EB-5 applicant has filed the right petitions and met all the EB-5 investment requirements, they should be granted a U.S. Green Card, but this is not always the case. Other factors such as EB-5 visa availability may influence applicants’ chances of obtaining permanent residence in the U.S. Therefore, EB-5 investors should learn how unused EB-5 visas are reallocated and use this information to their advantage.

In this post, we will explain how EB-5 visas are allocated each year, what happens to unused EB-5 visas, and how this impacts the EB-5 program and the investors involved.

EB-5 Carryovers and Other Key Terms

To fully understand how EB-5 visa carryovers work, investors must be familiar with certain terms relating to EB-5 visa availability and the important dates leading up to the receipt of their Green Cards.

EB-5 Visa Carryovers

EB-5 visa carryovers are unused visas in a given year that get rolled over to the next year. DOS processes EB-5 visa carryovers to increase EB-5 visa availability, reduce backlog, and speed up EB-5 processing times.

Reserved Visas

To redirect investments to areas that need them the most, the U.S. government sets aside a percentage of EB-5 visas for specific targeted employment areas (TEAs), namely rural regions, high-employment areas, and infrastructure projects. The government encourages investments in these targeted areas by setting a lower investment threshold for them, as well as offering “reserved” visa availability, which especially benefits new investors from otherwise backlogged countries. This way, investors who apply for reserved visas have shorter waiting times than regular EB-5 processing times.

Unreserved Visas

EB-5 projects outside of targeted employment areas that do not qualify for reserved set-asides fall under the “unreserved” category. They take longer to process, and once the given annual limit is exceeded, affected investors would have to wait until their priority date becomes current again. This is where Chinese and Indian investors are currently facing backlogs.

Visa Bulletin

An investor’s priority date is when USCIS receives their Form I-526 or I-526E immigrant petition. This date is essential for the EB-5 investor as it marks their position in line for an EB-5 visa. When an EB-5 investor’s priority date falls before the final action date on the visa bulletin, it means that an immigrant visa is available for their use. However, priority dates that fall after the final action date exceed the EB-5 annual visa limit and a visa will not be issued until it becomes available.

Final Action Date

Final action dates are also indicated in the visa bulletin. It is the date when EB-5 investors who have an approved immigrant petition can expect to adjust status.

How Are EB-5 Visas Allocated?

There is an annual limit for employment-based visas, which also includes eligible dependents. Under the INA provisions, EB-5 visas account for around 7% of the total employment-based visas.

Of these visas, 32% are set aside for three categories of EB-5 applicants. Specifically, 20% are for applicants who invest in rural areas, 10% are for applicants who invest in areas with high unemployment, and 2% are for those who invest in infrastructure projects.

The remaining 68% constitute unreserved EB-5 visas.

How Are Unused EB-5 Visas Carried Over?

Within certain limitations, DOS may transfer unused visas from the family-based to the employment-based categories, including EB-5.

Unused visas within the same category may also be redistributed. For instance, where there are unused EB-1 visas, DOS may transfer them to another employment-based visa category, such as the EB-2 visa.

Impact of RIA

With the enactment of the Reform and Integrity Act of 2022 (RIA), new visa carryover provisions under the reserved categories were introduced. According to this, unused reserved visas from the fiscal year immediately prior will be rolled over to the current fiscal year within the same category. If these reserved carryover visas are not used within that fiscal year, either, then they will be carried over to increase the unreserved visa numbers.

This means that the reserved visas from FY 2022 were carried over to FY 2023. As FY 2023’s reserved visas also weren’t used in the same year, they rolled over to FY 2024. This translates into an unusually high number of EB-5 visas being available in FY 2024, including those made available in the unreserved category. If USCIS and relevant U.S. consulates and embassies in retrogressed countries can process these available visas efficiently, this relatively new EB-5 visa carryover policy may help ease current backlogs.

Start Your EB-5 Journey With EB5AN

The EB-5 Immigrant Investor Program is one of the most straightforward pathways to obtaining permanent residency in the U.S. However, the program often involves complicated details, leaving many investors frustrated and discouraged. This is why seeking guidance from experienced EB-5 professionals can help you through every step of the process.

To learn more about the EB-5 program, please feel free to book a free consultation with us.

The EB-5 Immigrant Investor Program has long been a popular pathway for foreign nationals seeking permanent residency in the United States through investment in a U.S. business venture.

The program, administered by United States Citizenship and Immigration Services (USCIS), was introduced by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign entrepreneurs. It enables non-U.S. citizens and their eligible dependent family members, i.e., the spouse and unmarried children under 21, to obtain lawful permanent residency in the United States, also known as the Green Card.

To be eligible for the EB-5 visa, applicants must invest a minimum amount in a new commercial enterprise and create at least 10 permanent full-time jobs for qualified U.S. workers. The standard EB-5 minimum capital investment is $1,050,000. However, for specific infrastructure projects and projects located in a targeted employment area (TEA), the minimum investment threshold is much lower at $800,000.

TEAs are areas designated by the U.S. government as regions requiring economic stimulation due to rural location or high unemployment rates. The EB-5 program aims to promote economic growth in these areas with investment capital and jobs, which is one of its main objectives.

In this article, we will explore the differences between the three investment options—rural TEA, high-unemployment TEA, and infrastructure projects. We will also understand how potential investors can accelerate their EB-5 process and the factors they must consider while selecting a TEA investment that best suits their immigration and financial goals.

Faster Immigration with Set-Aside Visas

Besides requiring lower capital, investments in rural areas, high-unemployment areas, and infrastructure projects also provide a faster immigration route to EB-5 applicants, as these investments are eligible for set-aside visas introduced under the EB-5 Reform and Integrity Act of 2022 (RIA).

Under the RIA, 32% of the total yearly quota of EB-5 visas are reserved as set-aside visas—20% for investments in rural areas, 10% for investments in high-unemployment regions, and 2% for investments in designated infrastructure projects.

This provision of the RIA offers an invaluable opportunity to applicants from high-demand countries, such as China and India, to avoid backlogs in the unreserved category. Investors from these countries often face years-long extended waiting times for their Green Cards as the demand far outnumbers the limited annual availability of EB-5 visas. With the new set-aside visa categories, they can potentially obtain a Green Card as soon as their EB-5 petition (Form I-526E) is approved.

As of now, there is no extra waiting time or backlog in the reserved categories. However, the supply of EB5 set-aside visas is limited, and these categories may also become oversubscribed. Investors considering an EB-5 investment must file their petitions without delay while the reserved visas are still available.

Each of these investments has unique risks and benefits for investors, as discussed below.

Rural Area Investments

To qualify as a rural area, an area must not have more than 20,000 residents, not border a city or town with a population of 20,000 or more, and not be located within a metropolitan statistical area according to the most recent 10-year census of the United States.

Investing in a rural TEA project has multiple advantages and is one of the best options for foreign investors to expedite their immigration journey.

Low Investment Amount

As mentioned earlier, rural TEA projects qualify for the reduced minimum investment amount of $800,000, which means considerable savings for investors at the outset.

Priority Processing

In addition, rural EB-5 investments are eligible for priority processing of Form I-526E by USCIS. Of all other EB-5 investment categories, rural TEA petitions are adjudicated first, ensuring the shortest processing time for rural EB-5 investors. Due to priority processing for rural projects, many EB-5 investors and their family members have been approved for U.S. Green Cards in a matter of months.

Maximum Reserved Visa Quota

Another key benefit of a rural TEA investment is that it qualifies for 20% of the annual EB-5 visa quota, the largest share among the three set-aside visa categories. As the demand for rural EB-5 projects has historically been lower than for high-unemployment TEA projects, the reserved quota under this category is expected to last the longest, reducing the chances of a backlog in this category.

Faster processing for rural EB-5 petitions is particularly advantageous for investors applying from outside the United States, as they often face longer waiting times than investors already in the United States. This is because investors in the United States on non-immigrant visas can benefit from the concurrent filing provision of the RIA.

While rural EB-5 investments are an excellent option for investors looking for fast visa processing, they also have some inherent risks, such as financial viability due to low population, unpredictability of construction costs, and difficulty in securing financing.

To increase their chances of immigrating successfully and getting their money back, EB-5 investors must research carefully and invest in profitable and fully financed projects executed by reputed developers.

High-Unemployment Area Investments

A high-unemployment TEA is an area that has an average unemployment rate of 150% above the national average at the time an investor files their EB-5 petition.

Historical Preference for High-Unemployment TEA Investments

Before the RIA introduced significant incentives for rural TEA investments, high-unemployment urban TEA projects dominated the EB-5 market. Typically, large real estate urban TEA projects developed by major companies were considered a safe option for EB-5 investors as they were often fully capitalized and had significant job creation.

Post-RIA, although there is an increase in the demand for rural TEA investments, urban TEA projects continue to remain popular among investors. Recent data from USCIS reveals that urban TEA projects are more than twice as popular as rural TEA projects.

Pros and Cons of Urban TEA Investments

Just like rural EB-5 investments, urban TEA investments are also eligible for reduced minimum capital criteria and set-aside visa quota.

However, as the set-aside visa allocation for high-unemployment TEA investments is only 10% of the total EB-5 visas, this category may soon become significantly oversubscribed and face long processing delays, especially for investors from China and India.

In comparison, rural TEA investments have a larger (20%) visa allocation, and with lower demand, the rural EB-5 visa category is not expected to face backlogs for a longer time. Because of this, for investors from high-demand countries, rural TEA investments could be a better option for faster immigration to the United States.

However, investors already in the United States on non-immigrant visas can opt for urban TEA projects as they will not practically be affected by the long waiting time in case of backlogging. Such investors can exercise the concurrent filing option to adjust their status.

Under the concurrent filing provision, investors are allowed to file their adjustment of status petition (Form I-485) along with their EB-5 petition, after which they can apply for work and travel permits. Within a few months, they can receive their work and travel authorization and enjoy Green Card benefits while their EB-5 petition is being processed.

Infrastructure Project Investments

The EB-5 infrastructure project investment is a new category created by the RIA in March 2022.

An infrastructure project is defined as one that is administered by a federal, state, or local government entity and involves the development of a public works project. This new category aims to support infrastructure development projects across the United States.

Investments in qualifying public infrastructure projects are eligible for the reduced investment amount criteria of $800,000 and have access to 2% of the annual EB-5 visa quota as reserved visa set-asides.

However, this category only applies to immigrant investors who file EB-5 petitions through regional centers.

Infrastructure project investments being a relatively new category, there is still some ambiguity about the eligibility criteria for projects. The demand for this category is low, with only a few projects qualifying under the infrastructure classification.

Contact EB5AN for More Information

Both rural and urban TEA projects offer an excellent opportunity for investors to fast-track their immigration journey at a lower investment cost. Even so, each investor has unique needs, and EB5AN can help you find the right project for your individual immigration and financial goals.

EB5AN has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. Our expert team has more than a decade of experience and offers clients first-rate, low-risk EB-5 regional center projects with a 100% USCIS project approval rate.

For more information on TEA investments, please book a free call with our expert team today.

Many businesses face difficulties in securing loans or investments from traditional sources like banks or venture capitalists. The EB-5 program provides a solution to this capital challenge by facilitating foreign investment in U.S. businesses.

The EB-5 program is a U.S. immigration program that grants permanent residency (Green Card) to foreign investors who meet specific criteria. Investors must invest either $1,050,000 or $800,000 (in a targeted employment area) in a new commercial enterprise that creates at least 10 full-time jobs for U.S. workers.

Investors and their immediate family members receive a conditional green card valid for two years initially, then become permanent residents of the U.S. if they fulfill various U.S. Citizenship and Immigration Services (USCIS) requirements.

While this program offers many financial and immigration benefits to investors, it can also help project developers. In this article, we will explore the benefits of EB-5 funds for developers.

Benefits of EB-5 Funds for Developers

The EB-5 program provides developers with a significant capital injection, enabling them to secure the necessary funds for large-scale projects that might otherwise be challenging to finance through traditional means. Here’s how this influx of capital benefits developers seeking to launch projects.

Flexibility

Even though EB-5 capital isn’t always much cheaper than regular debt, it comes with fewer rules and restrictions. Through EB-5, developers can also get better financial terms since foreign investors tend to prioritize immigration benefits over return on investment.

Additionally, repayment periods tend to be longer, giving developers more breathing room for project completion and cash flow generation. The non-recourse structure of EB-5 investments protects the developer’s assets in case of default, offering greater financial security compared to traditional loans.

Global Funds Reach

Investors can use a wide range of lawful funds, including salaries, business profits, real estate sales, inheritances, and even gifts. This global reach attracts investors from various backgrounds, expanding the potential pool of capital. EB-5 projects can potentially secure capital from hundreds or even thousands of individual investors. This diversification reduces the risk associated with relying on a single or limited number of funding sources, enhancing financial stability and mitigating the impact of any potential investor defaults or withdrawals.

Expedited Funds

EB-5 capital expedites the visa process for foreign investors, injecting funds quickly. This streamlines project execution, shortening timelines compared to traditional financing methods. Faster project completion also leads to quicker market entry, potentially securing a first-mover advantage. This can lead to market share capture, higher profits, and a strong competitive edge in the industry.

Increased Credibility

EB-5 projects undergo a meticulous vetting process by USCIS to ensure compliance with program regulations. This scrutiny involves examining the project’s financial viability, job creation potential, and adherence to TEA requirements, if applicable. Successfully navigating this process demonstrates the project’s overall soundness and strengthens the developer’s reputation.

Attracting foreign investors through EB-5 means that many people from different backgrounds find the project promising and worth investing significant capital in, hoping to get U.S. residency in return. This validation adds a layer of credibility to the developer’s capabilities and the project’s potential.

EB-5 Funding for Real Estate Development

There are many types of projects that can qualify for EB-5 funding, with a wide range of industries represented. However, real estate developers typically use EB5 capital the most.

Real estate development boasts a natural synergy with EB-5 funding due to its inherent job creation potential. Projects like mixed-use developments, hotels, and office buildings tend to require significant construction and ongoing operational staff, directly translating investment into job opportunities.

Infrastructure improvements also often accompany development projects. New roads, utilities, and public spaces can revitalize areas, attracting residents and businesses and further stimulating job creation within the surrounding community.

For instance, hotel development in a growing tourist destination not only creates construction and hospitality jobs but also drives demand for ancillary services like transportation, restaurants, and retail. These indirect and induced jobs may count toward the EB-5 job creation requirement in the case of regional center investments.

Due Diligence and Marketing

The core EB-5 requirement is job creation: the project must generate at least 10 full-time jobs for U.S. workers within a designated timeframe (currently two years). Additionally, the project must be a new commercial enterprise (NCE) established after November 29, 1990, or an existing business undergoing significant restructuring that increases its net worth or employee count by 40%.

Thorough due diligence is key for developers using EB-5. This involves preparing a comprehensive offering document outlining the project details, financial projections, job creation plan, and potential risks. Transparency and clear communication are very important when it comes to building trust with potential investors.

Marketing strategies should target the specific investor profile aligned with the project. Attending industry events, collaborating with investment firms specializing in EB-5, and using digital marketing tools are all effective ways to reach the desired audience.

For instance, a developer planning a resort project in a rural area can leverage the TEA designation to attract investors with a lower investment threshold of $800,000. Partnering with a reputable regional center experienced in the industry can provide access to a network of pre-qualified investors and streamline the fundraising process.

Seeking the help of experienced EB-5 professionals is crucial to ensure project compliance with all regulations and maximize the chances of successful capital raising through the program.

Get Started with EB5AN

EB-5 funding offers a powerful tool for developers seeking capital to fuel their projects. By providing access to significant investment opportunities, the program facilitates the realization of diverse projects across various industries.

While the EB-5 landscape is subject to ongoing modifications and potential legislative changes, its core principles of promoting economic growth and job creation through foreign investment remain a valuable asset for developers seeking innovative funding solutions.

If you would like to learn more about how to use EB-5 funds to your advantage as a developer, book a call with us today.