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Direct EB-5 Investments Are on the Rise

Direct EB-5 Investments Are on the Rise

Ever since the expiration of the EB-5 regional center program on June 30, 2021, the direct investment route has become much more popular—after all, direct investments do not depend on periodic government reauthorization. In fact, direct EB-5 investments have always been a viable option, even before the regional center program expired: they offer many unique benefits to investors.

Many industry leaders believe that long United States Citizenship and Immigration Services (USCIS) wait times for I-526 petition and visa adjudication have made regional centers less appealing to foreign nationals planning an EB-5 investment.

The direct EB-5 investment route requires foreign nationals to make an investment in a qualifying new commercial enterprise (NCE). An NCE is a for-profit organization that was created or restructured after November 29, 1990. Applicants to the EB-5 program are also required to create at least 10 jobs for qualifying U.S. workers, and these positions must last at least two years. Due to the June 22, 2021 repeal of the EB-5 Modernization Rule, the minimum EB-5 investment amounts were lowered to $500,000 for projects located in a targeted employment area (TEA) and $1,000,000 for projects outside a TEA. Direct investment may be preferable for some investors because it allows them to operate and manage their EB-5 investment capital themselves.

Why the Direct Investment Route is Appealing

Many industry stakeholders sustain that the EB-5 program in general has been in decline ever since the 2019 Modernization Rule raised the minimum investment amounts. However, the number of overall EB-5 investment petitions increased dramatically just after the minimum amounts were lowered. Currently, there is no political push to end EB-5 direct investments, so they are considered a relatively “safe” way for foreign nationals to relocate to the United States.

Future Trends in Direct EB-5 Investments

Many direct EB-5 investments have been made in technology, infrastructure, and construction projects. Other industries that have expansion opportunities are also in continual growth. In fact, direct EB-5 investments can be made in a wide variety of sectors.

EB-5 direct investments are experiencing renewed interest—with COVID-19 travel restrictions ending, many EB-5 investment opportunities are becoming more and more popular. There has never been a more favorable time to make a direct EB-5 investment.

Given the end of the EB-5 regional center program and the lowering of the minimum EB5 investment amounts, the popularity of direct investments will undoubtedly increase.