What does the future of EB-5 fundraising mean to foreign investors? Now that China’s EB-5 visa backlog has stretched well into the 2030s, the powerful Chinese visa agents — who once controlled the flow of information to the majority of the industry’s investors — have largely gone away. Who, or what, will replace them?
In this week’s featured article, Kurt Reuss, CEO of EB5 Deals, suggests that the decline in influence of home-country visa agents is leading to the “democratization” of the EB-5 marketplace. Increasingly, he argues, investors are able to learn about project options and review multiple offering documents themselves online, and changes to the ways EB-5 investments are registered and advertised are helping to accelerate this shift.
The challenges facing issuers of EB-5 qualified private placements today are significant: an unpredictable U.S. Customs and Immigration Service, a steep decline in a major overseas market, and an oversupply of offerings. All of these forces have made a slow-down inevitable. However, the EB-5 marketplace is actually maturing.
In this landscape, Reuss says, it may be digital deal platforms — directories hosted by broker-dealers — that most successfully fill the information void. How ever much the minimum investment amount for foreign investors increases, the future of EB-5 fundraising will not be the same.
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