By Anayat Durrani
Since the launch of the EB-5 program, it has served as a viable pathway for foreign investors and their families to get American green cards. While the program has since experienced some bumps along the way, including a pandemic, the program continues full speed ahead with EB-5 volumes holding strong.
“The EB5 Reform and Integrity Act has provided a welcome resurgence to the EB-5 industry,” says Connor Irish, co-founder of PRXY, which provides end-to-end fund administration powered by blockchain.
Increasing number of EB-5 projects on the market
The RIA brought stricter oversight and transparency measures for the EB-5 process. Irish says the company built their software platform in response to the new regulation to provide clients with the best tools to navigate the post-RIA world of EB-5.
“We launched the first version of the PRXY platform in Q4 of 2022, specifically in response to the RIA. It’s exciting to see new, protective regulations not only bolster the health of the program but also provide a release valve for pent-up demand in our industry. This has allowed for accelerated performance as we’ve grown in parallel with the new pulse of the program,” Irish said.
“To date in 2023 alone, PRXY has seen 46 new projects onboarded to the PRXY platform and, since our launch in Q4 of 2022, the PRXY software has already recorded over $525M in EB-5 transactions and is growing.”
The platform metrics as of August 1, 2023 show the largest EB-5 offering at $255M, and the smallest EB-5 offering at $2.4M, and an average 2023 EB-5 offering size of $41.1M.
RIA shows positive impact on EB-5 market
Jill Jones, general counsel at JTC, who has been directly involved in more than 600 EB-5 development projects, says while some feared the dearth of guidelines or clarity following the enactment of the RIA would pause the industry, she notes that has in fact not been the case.
“The volume of new EB-5 projects has doubled year over year since the RIA was enacted. It seems industry players are tired of waiting,” says Jones.
She says one interesting result can be seen in the change in where investors are coming from. In comparison to investor volume from 2022 to 2023, she says the number of investors in active projects that come from China has increased by more than 400%. At the same time, investors from South Korea have dropped by 84% and investors from Vietnam have decreased by 63%. She attributed that it is likely due to the RIA’s introduction of reserved visas that allow new Chinese investors to cut to the front of the line.
“This has the dual effect of spurring Chinese investment from investors who had been deterred by protracted wait times, while also making it possible for developers to take advantage of the well-developed EB-5 networks in China rather than spending time educating the less robust markets,” says Jones.
However, she notes that while the leaderboard has shifted, the same combination of a handful of countries still dominate the industry.
“China, South Korea, Vietnam, and India still represent over 75% of the investors in active projects,” says Jones.
DISCLAIMER: The views expressed in this article are solely the views of the author and do not necessarily represent the views of the publisher, its employees. or its affiliates. The information found on this website is intended to be general information; it is not legal or financial advice. Specific legal or financial advice can only be given by a licensed professional with full knowledge of all the facts and circumstances of your particular situation. You should seek consultation with legal, immigration, and financial experts prior to participating in the EB-5 program Posting a question on this website does not create an attorney-client relationship. All questions you post will be available to the public; do not include confidential information in your question.
