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Why Making a Direct EB-5 Investment is Advisable

Why Making a Direct EB-5 Investment is Advisable

The EB-5 program is a popular way for foreign nationals to obtain a U.S. green card. Because of the suspension of regional center investment in June 2021, many potential investors are looking for direct EB-5 investment projects. This investment type is regarded as one of the best options for foreign nationals seeking U.S. residency and remains popular.

As of June 22, 2021, the minimum EB-5 investment amount for targeted employment area (TEA) projects is only $500,000, making the program accessible to many foreign nationals. This amount was lowered because the controversial EB-5 Modernization Rule was deemed invalid by the U.S. District Court for the Northern District of California. As a result, guidelines for EB-5 investments reverted to their pre-Modernization Rule status.

However, investors need to act fast: United States Citizenship and Immigration Services (USCIS) has already filed an appeal to reverse the court’s decision, and the minimum investment threshold might increase soon. Interested foreign nationals are advised to invest at the lower amount of $500,000 and start the EB5 investment process, thus securing their status before any further changes are made.

Why make a direct EB-5 investment? There are three key reasons why direct EB-5 investment is a great option for foreign nationals.

1. Investors are Actively Involved in their EB-5 Projects

Since the suspension of the regional center program in June 2021, direct investment is the only option for foreign nationals looking to make an EB5 investment. While regional center investors often have a more passive role in their projects, direct EB-5 investors can choose to be active. Many direct investors want to be involved in the major decisions and are “hands-on” managers of their business. For investors wanting to retain some control over how their capital is used, direct investment is an ideal choice.

2. The Potential for Higher Returns

Direct EB-5 investment also offers greater potential returns. There are fewer people involved with direct EB-5 projects when compared to regional center projects, and the EB-5 investment capital goes directly into the new commercial enterprise (NCE). When direct EB-5 businesses grow, their investors receive a higher rate of return—this greater earning potential should motivate prospective EB-5 investors.

3. A More Secure Path

By selecting the direct EB5 investment path, investors can take comfort in knowing that their investment route is secure for the long term. The recent suspension of the regional center program created concern for investors. In fact, USCIS halted all I-526 petitions related to regional centers, so regional center investors may eventually try to get their funds back.

Direct EB-5 investors do not face these issues. Since direct EB-5 investment is already embedded within the EB-5 program, this investment route is not subject to periodic review. At present, the fact that no petitions from regional centers are being accepted means that there are more USCIS adjudicators available to handle direct investment petitions. This may result in shorter processing times for direct EB-5 investors.

Participating in the EB-5 Program

Now is the best time to make a direct EB-5 investment; the minimum investment amounts could be raised in the near future. Direct investors will appreciate being involved in the management of their business and enjoy the stability and returns associated with direct EB-5 projects.

EB5AN is here to help interested investors with their EB-5 projects. Our experts can connect prospective investors with the direct investment opportunities that best suit their individual needs.