By Clem Turner
On Jan. 1, 2027, the $800,000 minimum investment required under the EB-5 Reform and Integrity Act (RIA) will increase by approximately 12.5%, at a minimum. Most expect the revised minimum investment to fall between $900,000 and $937,500, depending upon the annual inflation rate and how U.S. Citizenship and Immigration Services (USCIS) interprets the statute’s inflation adjustment provisions.
Regardless of the final amount, every EB-5 issuer intending to accept investments supporting petitions filed on or after Jan. 1, 2027, will need to evaluate and likely revise its Offering Documents to reflect the new minimum investment amount and related offering terms. Having advised EB-5 issuers as securities counsel since 2010, I expect many of those revisions will be mechanical. The 2027 increase, however, presents a broader opportunity to reconsider how the offering itself is designed.
One important consideration is whether the offering should continue to assume that every EB-5 investor will fully fund the investment at closing or whether it should intentionally accommodate installment investment structures. Following the increase from $500,000 to $800,000 after the enactment of RIA, many issuers adopted installment investment structures, often referred to as “partial subscriptions,” to reduce the immediate financial burden on investors. As the minimum investment amount increases again, more issuers may decide to adopt or expand that approach.
If they do, however, the decision should extend well beyond generating an installment payment schedule. Accommodating installment investments affects the design of the offering itself. It requires issuers to determine how the relationship between the investor and the issuer should operate during the funding period, what rights and protections each party should have, what remedies should be available if the investment is never completed, and whether those decisions can be consistently administered throughout the life of the offering.
Immigration practitioners have written extensively about the consequences installment investment structures present for investors. This article addresses a different question. It examines how EB-5 issuers should design an installment investment structure that is internally consistent, operationally practical, and capable of being administered in accordance with the Offering Documents.
DESIGNING AN INSTALLMENT INVESTMENT STRUCTURE
Establish the Issuer’s Objectives
Once an issuer decides to permit installment investment structures, the first step is not drafting revised Offering Documents—it is determining the objectives those documents are intended to accomplish. The design of the installment investment structure should reflect the issuer’s priorities.
Should the offering maximize marketability by making participation as attractive as possible to investors? Should it preserve flexibility if an investor defaults? Should it maximize the likelihood that the remaining investment can be collected? Or should it simplify administration throughout the life of the offering?
Different issuers may legitimately prioritize these objectives differently. Those priorities will naturally influence every aspect of the installment investment structure. There is no universally correct approach. The important point is that the structure should be intentionally designed to advance the issuer’s objectives.
Define the Investor Relationship
Once the issuer establishes its objectives, it should determine its legal relationship with a partially funding investor, in a manner consistent with its objectives.
When Does Ownership Attach?
One of the earliest decisions is when the investor becomes a full-fledged owner of the Issuer’s equity. If the issuer is a limited liability company, an owner of equity is referred to as a “member.” If the issuer is a partnership, the investors with equity are referred to as “limited partners.” This article will use the word “owners” to denote investors who are admitted into the issuer as a member or limited partner and “partial subscribers” to denote investors who have not been legally recognized as such.
What Rights Come with It?
Some issuers may recognize investors as owners upon acceptance of the subscription and receipt of the initial installment. Others may defer admission until the investment has been fully funded. That decision extends beyond corporate formalities. It determines what rights accompany ownership. Should a partially funding investor receive notices? Exercise voting or consent rights? Participate in distributions? Or should those rights arise only after the investor has fully satisfied the subscription obligation?
Delaying ownership will prevent a partially funding investor from exercising the rights that accompany ownership, which is advantageous to the issuer. Conversely, admitting the investor immediately may simplify other aspects of the corporate relationship and better align with the investor’s expectations and preferences. Certain immigration attorneys have argued that partial investors should be admitted as owners, because investors must demonstrate engagement in management and/or policy formulation when filing. However, an issuer’s remedies following a default may be faster and simpler if the investor has not yet become an owner.
The question, therefore, is not simply whether the investor should become an owner immediately or only after completing the investment. Rather, it is whether the practical consequences of that decision are consistent with the issuer’s objectives and the overall structure of the offering.
Whatever approach is selected, it should be reflected consistently throughout the Offering Documents.
Determine Issuer Protections
After defining the investor relationship, the issuer should determine the protections it requires while the investment remains outstanding.
Should the existing contractual protections contained in the Offering Documents be expanded? Should the investor execute a promissory note for the unpaid balance? Should that obligation be secured by collateral? These decisions affect not only the issuer’s available remedies, but also the likelihood that the remaining investment can ultimately be collected.
Issuers should also recognize that the Department of Homeland Security (DHS) issued proposed regulations on July 2, 2026, that may affect this analysis. If adopted, those regulations should be considered when designing the installment investment structure.
Planning for the Possibility of Default
These protections become particularly important if the investor never completes the investment. While every issuer expects investors to satisfy their subscription obligations, these documents should anticipate the possibility that some will not.
Some issuers may prioritize flexibility and marketability by avoiding rigid installment deadlines, providing generous cure periods, or allowing investors to withdraw and receive a full refund of their partial subscription. Issuers that value retaining as much capital as possible may allow investors to withdraw, but the issuer will retain all or a portion of the investor’s partial subscription. Others may prioritize collection of the full investment amount by requiring stronger contractual protections and limiting the circumstances under which partially funded investments may be returned.
The issuer’s objectives and decisions naturally determine the remedies the issuer will ultimately implement.
Select Issuer Remedies
Once the issuer determines the rights it intends to protect, it should evaluate the remedies available to enforce those rights. More importantly, it should consider the practical consequences each remedy creates. There is no single approach appropriate for every offering.
Option 1: Return the Investor’s Capital
An issuer that prioritizes marketability, flexibility, or administrative simplicity may elect to return a defaulting investor’s capital contribution. Although this approach efficiently removes the investor from the offering, it also requires the issuer to locate a replacement investor. The issuer loses the time and expense devoted to an investor who ultimately failed to complete the investment. If the investor’s funds have already been deployed to the Project, returning those funds may also create additional legal, operational, and logistical challenges.
Option 2: Require a Promissory Note or Other Payment Obligation
An issuer that prioritizes collection of the remaining investment amount may instead require the investor to execute a promissory note or other enforceable payment obligation. While this may improve the issuer’s legal position, it does not necessarily produce a prompt solution. Collection proceedings may be expensive and time-consuming, particularly if collateral must first be liquidated before the issuer can obtain the funds necessary to complete its financing of the Project. Unsecured collection actions may take even longer, with a smaller likelihood of success. Moreover, stronger enforcement provisions may reduce the offering’s attractiveness to prospective investors.1
Option 3: Admit the Investor as a Proportional Owner
Another alternative is to retain the investor’s partial investment while recognizing the investor as an owner whose ownership interest is proportionate to the amount contributed. Although this approach may be relatively simple to administer, it carries significant consequences. The investor may have substantial capital committed to a “low interest” investment that no longer serves its intended immigration purpose. At the same time, the retained capital becomes additional “paid-in capital” of the issuer. If the issuer later fully subscribes the offering, the maximum offering amount (e.g., “the ceiling on total capital the offering is authorized to raise”) may be exceeded, creating potential corporate and securities law concerns. It also raises a practical question: if the issuer ultimately receives additional capital, will the Project accept those additional proceeds? If not, the issuer must ensure that the immigration objectives of its fully subscribing investors will be satisfied.
Regardless of the structure ultimately selected, these decisions should not be made independently. Each should support the issuer’s objectives and operate consistently with every other aspect of the offering. The Offering Documents should tell a single, internally consistent story. Otherwise, the issuer—and any Fund Administrator responsible for administering the offering—will eventually confront operational questions the Offering Documents never answered.
CAN YOUR OFFERING BE ADMINISTERED?
The questions discussed throughout this article are not merely drafting considerations. Every one of them ultimately becomes an operational question.
At some point, the issuer will request a disbursement to the Project. Before that disbursement occurs, the Fund Administrator must determine whether the proposed transfer is consistent with the Offering Documents. The answer depends entirely upon how the issuer designed the installment investment structure.
Have the conditions for capital deployment established by the Offering Documents been satisfied? What happens if the investor defaults on a future installment payment? Do the Offering Documents authorize the requested disbursement under these circumstances? What are the rights and procedures for any partial subscriber wishing to withdraw from the Offering?
WHOSE DECISION IS IT?
Those are not questions the Fund Administrator decides. They are questions the Fund Administrator answers by applying the Offering Documents the issuer has created.
This distinction is fundamental. A Fund Administrator does not establish the compliance framework for an EB-5 offering. The issuer establishes that framework through its business decisions and the Offering Documents that implement them. The Fund Administrator’s responsibility is to administer the offering in accordance with that framework.
The same principles apply when an issuer elects not to engage a third-party fund administrator and opts instead to provide annual audits to USCIS and its investors. The issuer’s obligation to administer an offering in accordance with its Offering Documents is a corporate and securities law responsibility; it does not arise from immigration laws. The absence of a Fund Administrator does not eliminate those obligations; it simply requires the issuer to fulfill them without the benefit of an independent administrator. If the documents are incomplete or internally inconsistent, the issuer must resolve those operational questions itself.
When the Offering Documents clearly address installment investment structures, the Fund Administrator—or the issuer, if performing that function internally—can determine whether investor funds are being administered consistently with those documents. When the Offering Documents are silent or internally inconsistent, operational and compliance uncertainty inevitably follows. Questions that should have been resolved during the drafting process instead arise during the administration of the offering.
Ultimately, successful Fund Administration does not begin when investor funds are received. It begins when the issuer intentionally designs an offering that can be administered consistently from the first subscription through the final distribution.
TAKING ADVANTAGE OF THE OPPORTUNITY AHEAD
The 2027 increase in the EB-5 minimum investment amount will require every issuer with an active offering to revise its Offering Documents. While updating subscription amounts and related offering terms will be necessary, the revision process presents a broader opportunity to reconsider how the offering itself is designed.
For some issuers, installment investment structures may become an effective tool for maintaining marketability in a changing investment environment. If that approach is adopted, however, it should result from intentional offering design rather than ad hoc accommodation of individual investors. Decisions regarding investor ownership, investor rights, issuer protections, default remedies, capital deployment, and fund administration should operate as components of a single, integrated framework rather than a series of independent business decisions.
That framework ultimately finds its expression in the Offering Documents. They do more than define the parties’ legal rights and obligations. They establish the operational blueprint for administering the offering throughout its lifecycle. Whether administration is performed by an independent Fund Administrator or by the issuer itself, the Offering Documents should provide clear guidance long before operational questions arise.
As January 1, 2027, approaches, issuers have an opportunity to do more than revise their Offering Documents. They have an opportunity to redesign their offerings intentionally. Those that approach the 2027 increase as a design exercise—not merely a drafting exercise—will be better positioned to respond to investor demand while reducing legal, corporate, and operational uncertainty throughout the life of the offering.
After practicing securities law for more than thirty years — including the past fifteen representing EB-5 issuers — I’ve found that the most difficult problems rarely arise from what the Offering Documents say. They arise from what the Offering Documents never addressed. The 2027 increase allows issuers to resolve those questions before they become operational problems.