Starting an EB-5 Investment with a Partial Payment of Less than $800K: Weighing the Pros and Cons

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EB5AN is a leading EB-5 regional center sponsor, fund manager, and consulting firm. Founded in 2013, we have helped over 2,300 EB-5 visa applicants from over 60 countries through the EB-5 regional center investment process. We have closed and funded EB-5 transactions representing several billion dollars of development, with a 100% USCIS project approval rate. Our regional centers cover the entire continental United States as well as Washington, D.C., and Puerto Rico.
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When embarking on the EB-5 investment journey to secure U.S. permanent residency, prospective investors often face a crucial decision: whether to, at the time of filing an I-526E Petition, make a full investment ($800,000) or opt to start with a partial investment (less than $800,000). This choice carries significant implications, and understanding the pros and cons is essential.
The EB-5 Investment Process in Brief
Before diving into the partial investment option, it’s crucial to grasp the basics of the EB-5 program. Investors must first select a project and then commit to the required capital investment. The minimum investment amount is $800,000 if the project falls within a Targeted Employment Area (TEA), rural, or urban region. For projects outside these areas, the minimum investment is $1.05 million. These funds are typically placed into an escrow account, safeguarding the investment prior to being deployed to the EB-5 project itself.
Full vs. Partial EB-5 Investment
In the EB-5 landscape, two primary investment structures exist: full and partial investments.
Full EB-5 Investment: This requires EB-5 investors to disburse the entire capital amount upfront. This approach satisfies EB-5 program requirements by demonstrating that the investment is fully committed from the start.
Partial EB-5 Investment: Partial investments involve contributing a specific portion of the required capital, often around half, and committing to providing the remaining amount within a predefined timeframe. This option also complies with EB-5 program criteria, as it signifies that the investment is “in the process of being made.”
Evolution of Partial EB-5 Investment
Historically, prior to the EB-5 Reform and Integrity Act of 2022 (RIA), full payment at the time of I-526 petition submission was the norm. This was because of concerns that investors might change their minds midway through the EB-5 immigration process.
However, partial investments gained traction, especially among investors filing before the June 30, 2021, deadline (renewed in March 2022 with RIA). This allowed them to secure a lower investment amount or protect their children from aging out. Even after RIA, partial investments remain a viable option because of the $800,000 investment threshold and the limited liquidity potential many investors face.
Advantages of Partial EB-5 Investment
Partial EB-5 investment offers several advantages:
Priority Date: Investors can secure an early priority date while gaining additional time to complete the full investment.
Flexibility: It allows investors to liquidate assets like stocks or real estate at favorable terms rather than selling at a loss or below-market prices.
Timing Alignment: Investors expecting funds from asset sales on specific dates (i.e. restricted stock units with blackout dates) can use partial payments to match their investment with those timelines.
Risk Mitigation: In uncertain economic climates or with volatile financial markets, partial investments provide an element of risk mitigation.