Investing in Multiple EB-5 Projects: Is Diversification Possible?

The EB-5 Immigrant Investor Program offers a pathway to a U.S. Green Card through capital investment. A common strategic consideration for investors is diversification—spreading risk across multiple ventures. This article explores the feasibility and implications of investing in more than one EB-5 project simultaneously.

Understanding EB-5 Investment Requirements

The fundamental requirement of the EB-5 program is a minimum capital investment, which must be maintained for the duration of the conditional residency period. Currently, this threshold is typically $1,050,000, or $800,000 if the investment is made in a Targeted Employment Area (TEA).

The "One Investment, One Petition" Rule

Crucially, each investor must make a single qualifying investment linked to a single Form I-526 petition. You cannot pool funds from one investment across multiple petitions.

• Single Source: Each investment must be traceable to the investor's lawful source of funds.
• Separate Documentation: Each investment requires its own set of financial documentation and supporting evidence for the I-526 application.

Mechanisms for Investing in Multiple EB-5 Projects

While you cannot use the same $1,050,000 to fund two separate projects simultaneously for two separate petitions, an investor with sufficient capital can certainly make multiple, distinct investments.

Scenario 1: Sequential Investments

The most common approach is to invest in Project A, file the I-526 petition, and then, once the initial investment is secured (or even while the petition is pending, provided the funds are legally sourced and available), make a separate investment in Project B, filing a second I-526 petition.

Caution: Investors must ensure that the capital for the second investment is demonstrably available and traceable, separate from the capital already committed to the first project.

Scenario 2: Investing Through Different Structures

Diversification can also be achieved by choosing different investment vehicles for each commitment:

1. Investment 1: Direct Investment in a commercial enterprise.
2. Investment 2: Investment through a Regional Center project (often preferred for job creation counting).

Benefits and Risks of EB-5 Diversification

Diversification is primarily a risk mitigation strategy, but it introduces administrative complexity.

Potential Benefits

• Mitigating Project Failure: If one EB-5 project fails to create the requisite jobs or faces insolvency, the second investment remains independent, preserving the path to a Green Card through that separate petition.
• Exposure to Different Markets: Investing in projects based in different geographic locations or different industries (e.g., real estate vs. technology infrastructure) reduces sector-specific risk.

Key Risks and Considerations

Managing multiple EB-5 investments requires careful oversight:

1. Capital Commitment: The investor must maintain the required capital threshold for every active investment tied to a pending or approved petition.
2. Administrative Burden: Each investment requires separate due diligence, monitoring, and reporting to USCIS.
3. Source of Funds Scrutiny: USCIS will rigorously examine the source of funds for each investment to ensure legality and proper documentation.

For example, if an investor commits $1.05M to Project A and later commits another $1.05M to Project B, the total capital outlay is $2.1M, and two separate I-526 petitions are required, each relying on its own set of job creation evidence.

Conclusion

Yes, diversification across multiple EB-5 projects is possible, provided the investor has the requisite capital for each investment and adheres strictly to the "one investment per petition" rule. This strategy effectively hedges against the failure of a single venture, but it doubles the administrative complexity and requires meticulous financial tracking to satisfy USCIS requirements for each separate filing.