The below information does not constitute investment advice, and is presented purely for informational purposes, and reading it does not constitute the establishment of a client-provider relationship. Always be sure to seek professional advice before making any EB-5 investment related decisions, whether you hail from China or elsewhere in the world.

China is by far the biggest source market for the EB-5 Visa Program, followed by India, Vietnam, South Korea, Brazil and Taiwan. 

The EB-5 program has a per-country visa allocation limit of approximately 7% of the total annual EB-5 Visa quota for any single country.

This means that no single country could receive more than approximately 7% of the available EB-5 visas in a fiscal year.

Where the per-country demand exceeds the available visa quota, so-called EB-5 retrogression can occur.

And when this happens, it can lead to significant delays for EB-5 investors from that country in receiving their conditional lawful permanent resident status (i.e. Green Cards).

Chinese applicants, in particular, are negatively impacted by EB-5 retrogression, and over the years have frequently faced extremely long processing delays. 

Choosing the best type of EB-5 project for Chinese citizens – or for any EB-5 applicant, for that matter – can depend on a variety of factors, including the applicant’s investment goals (outside of gaining a Green Card), their preferred asset type, as well as their tolerance for risk. 

And while retrogression-driven delays are a challenge most acutely felt by Chinese investors, Indian and Vietnamese applicants can face similar risks.

All other things being equal, Chinese applicants’ considerations may therefore include:

  1. Application processing speed (and avoiding retrogression, specifically): 
  2. Capital preservation (i.e. downside risk mitigation):
  3. Minimum hold period (i.e. the associated opportunity costs):
  4. Upside potential (most real estate based EB-5 projects tend to offer projected yields of around 1%).

Choosing an EB-5 Rural Project offers the advantage of so-called visa set-asides, which can solve the issue of visa retrogression for Chinese nationals. 

While all EB-5 capital has to be “at risk” in order to meet the program’s requirements, there are many sensible risk mitigation steps that can be taken, both by developers, and by the prospective applicants appraising them.

It is always advisable to work with reputable professionals during the EB-5 due diligence process with a view to avoid any potential missteps.

It must be noted, however, that EB-5 real estate projects in rural areas tend to pose serious challenges in terms of achieving even nominal returns against acceptable timelines. 

These rural RE projects also face difficulties in keeping investors’ principals safe – and for related reasons:

Demand for both short-term and long-term accommodation tends to be lower in the non-urban areas in which Rural EB-5 real estate projects are situated.

Rural E-B5 projects in non-property sectors may offer a potential viable alternative. 

Introducing a new breed of Rural EB-5 Investment Projects for 2024 – in the Oil and Gas sector…

One example of such an alternative industry is the Oil and Gas sector:

EB-5 Rural Oil and Gas projects typically feature shorter hold periods, as cash flow tends to comes quicker on – for example – horizontal fracking projects than with real estate development projects.

(Bearing in mind that since the EB-5 Reform and Integrity Act of 2022 took effect, the minimum investment period to meet the EB5 program’s requirements is just two years (24 months), down from 5 years+.)

To be frank, few EB-5 real estate projects (if any) could realistically expect to complete construction – let alone reach meaningful cash flow – within this reduced time frame.

Whereas with horizontal fracking projects in proven reserves, on the other hand, achieving this milestone within two to three years is typically a lot more viable.

This new EB-5 Oil and Gas EB5 project offers principal returns between 2.5-3 years, with significant profit participation beyond exit:

And all participating EB-5 investors stand to earn an equal share of project profits around the end of Year 6.

Of course, Oil and Gas projects tend to face a range of geological and market pricing related risks. So whilst the featured EB5 energy project offer significant projected returns at the end of Year 6 (i.e. Project Month 72), adequate due diligence is essential…

The bottomline

Ultimately, there is no one-size-fits-all answer to the best type of EB-5 project for a Chinese national. 

It’s essential to carefully evaluate your personal circumstances, goals, and the specific details of the projects you are considering to make an informed investment decision. 

Additionally, the rules and regulations governing the EB-5 program can and do change periodically, hence it is crucial to stay up-to-date with the latest requirements and guidance from US Citizenship and Immigration Services (USCIS).

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