Direct EB-5 Resources

The permanent direct EB-5 program has been the focus of new interest, now that the regional center program has expired until the industry can agree on legislation that Congress will agree to pass. Direct EB-5 offers valuable opportunities, and many challenges.

I will write more as time permits, but for the moment note that I have a detailed and well-documented Direct EB-5 Page to address questions about how direct EB-5 works.

I mention this page again, because I am receiving advertisements for direct EB-5 deals that appear non-compliant. I can see that the promoters are accustomed to regional center EB-5, and have not thought through all the implications of a basic direct EB-5 difference: that the New Commercial Enterprise and the Job-Creating Entity must be formally one and the same, meaning that all NCE requirements also apply to the JCE and vice versa. This well-known structural fact has a cascade of less-obvious practical consequences for direct as opposed to regional center EB-5, including differences with respect to preexisting business investment, investment terms, investment structure, investor role, investor source of funds, timing considerations, and exit options. (See my Direct EB-5 page for discussion and examples.)

Direct EB-5 is personal for me because I have written over a hundred direct EB-5 business plans – many of them in 2015-2017 during the surge of direct EB-5 demand that occurred around the last cliff-hanger regional center program sunset date in 2015. Every plan meant a business and entrepreneurs that I got to know, and it’s been satisfying and sometimes painful to follow their stories. I’ve had years now to watch outcomes unfold, in USCIS review and in business development. There have been successes I’d love to see again, and tears that I’d like to help avoid going forward. Everyone attempting direct EB-5, take time to educate yourselves. Work with people who have walked a distance on the direct EB-5 path, and learned the hard lessons of practical experience.

I’ll end with a chart that illustrates how the direct EB-5 opportunity has been used over the years, according to numbers of EB-5 visas issued. Note that direct EB-5 accounted for a majority of EB-5 visas until the regional center opportunity gained popularity following the financial crisis in 2008. Direct EB-5 got another boost around 2015, when the fight over regional center program authorization legislation encouraged people toward the relative stability of direct EB-5. That boost was gradually depressed by long processing times and practical challenges that particularly impact direct EB-5, combined with a complacency around short-term regional center program extensions. Direct EB-5 demand may revive again now in 2021, as the regional center program fights for authorization, and direct investors may be able to skip ahead in waiting lines and take advantage of a temporary window for reduced investment amounts. Note that direct EB-5 investors have historically been more tolerant of higher investment levels than regional center investors. A significant percentage of direct EB-5 visas to date were based on investments at the $1 million dollar level, even twenty years ago.