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Why Make a Direct EB-5 Investment in 2021?

Why Make a Direct EB-5 Investment in 2021?

Direct EB-5 investment has always been an integral part of the EB-5 program since the latter’s inception in 1990. In fact, regional center investment was not added to the EB-5 program until 1992.

2021 has been a significant year for the EB-5 investment industry, with two crucial decisions that have had a substantial impact. On June 30, the EB-5 Regional Center Program expired; as of November 2021, Congress has yet to reauthorize the program. Previously, investing in regional center projects was the preferred method for many foreign nationals to participate in the EB5 investment industry. In the absence of this program, EB-5 investors can invest only in direct projects. This change may make prospective investors hesitant.

Moreover, on June 22, a court order revoked the EB-5 Modernization Rule, effectively lowering the minimum investment requirement to $500,000 for projects located in targeted employment areas (TEAs). This change makes the EB-5 program accessible to more foreign nationals, who can now secure permanent resident status with a smaller capital investment.

Congress is expected to bring legislation to reform the EB-5 program in the coming months. The reformed legislation may include provisions to raise the minimum threshold for EB-5 investments once more. Therefore, if EB-5 investors want to benefit from the lowered threshold, they should make a direct investment before reforms take place.

Direct Investment Will Never Expire

Although direct EB-5 investment has not been as popular as projects sponsored by regional centers, it has its own set of benefits to offer. Foreign nationals interested in relocating to the U.S. through an EB5 investment should consider these advantages.

For example, the EB-5 Regional Center Program requires reauthorization at regular intervals. Following the program’s expiry in June 2021, United States Citizenship and Immigration Services (USCIS) announced that they would no longer review I-526 petitions associated with regional centers. Foreign nationals who already invested through the regional center program find themselves in an uncertain situation, as their petitions will remain unprocessed until the government decides to reauthorize regional centers.

An investor who makes a direct investment in an EB-5 project will never find themselves in such a situation. Direct investment is an integral part of the EB-5 investment program, and it is not reliant on revalidation.

Direct EB-5 Investment Offers Greater Control

When an EB-5 investor subscribes to a regional center project, they typically have little influence over the daily management of business operations. Direct EB-5 investors, on the other hand, usually get involved in the management of the EB-5 project to which they have subscribed. In general, direct EB-5 projects are smaller and have fewer investors than their regional center counterparts, as well as fewer intermediaries. As a result, direct investors often earn a higher return on their investments.

Foreign nationals should start the EB-5 process soon to take advantage of the lowered threshold, before further changes are instated. However, the process of finding an EB-5 project that suits their purpose can be overwhelming. EB5 Affiliate Network (EB5AN) is here to help investors with the entire EB-5 visa process. We have the expertise and experience required to help investors complete the process successfully. Our team of experts provides guidance in many different areas, helping investors comply with USCIS regulations and receive their green cards.