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Since the expiration of the regional center program in June 2021, the direct EB-5 investment model has enjoyed wide acclaim and prevalence. Though it was previously less widely used compared to its direct counterpart, EB-5 investors have had to make the transition to the direct investment model, and so far, the adaptation has been successful. Despite the doubt and inconvenience that arose from the suspension of the regional center program, direct EB-5 offerings have been largely responsible for maintaining the continuation of the EB-5 program and have since brought in millions of dollars of investment capital. (The regional center program will be reauthorized in mid-May 2022.)
The information below outlines some points prospective investors need to know to select an EB-5 project that adheres to the criteria mandated by United States Citizenship and Immigration Services (USCIS).
Adherence to USCIS Criteria
One essential condition that direct EB-5 businesses must fulfill is generating, per each EB-5 investment, a minimum of 10 jobs. The jobs must be actual positions created by the project itself (contract work, indirect and induced positions don’t count) and employ qualified U.S. workers. They must be full time (35 hours a week or more), be present on the business’ payroll, and exist for a minimum of two years. Amongst other forms of employment documentation, investors must keep records of W-2 and W-4 forms, salary statements, and Form I-9.
Prospective investors should also take note of a business’s past credentials within the EB-5 industry. Specifically, if a business’ past ventures have been unsuccessful or different prospective investors have previously applied for I-526 petitions but had them rejected, that is indicative of the business’ instability. Investors should seek out direct EB-5 businesses with I-526 petitions that are in good standing within the industry.
Economic Potential
Assessing an EB-5 project’s profit potential is also essential to making a good EB5 investment. Investors should be prepared and go into the process with a concrete plan of action and practical monetary projections. A business’ future is precarious if there is too much dependence on EB-5 funding. A promising project will eventually accumulate substantial capital, leaving the EB-5 funds to be a small fraction of the project’s total funding.
The direct EB-5 investment model is becoming increasingly utilized. Prospective investors who are interested in beginning the process should reach out for counsel from an immigration lawyer.
