The EB-5 Reform and Integrity Act of 2022 created a new set-aside category for infrastructure projects, yet the reality is stark: most projects that appear to qualify actually don’t meet the stringent requirements. In a recent webinar, Jennifer Hermansky, National EB-5 Committee Chair for AILA and Shareholder at Greenberg Traurig, and Peter Calabrese, CEO of CanAm Investor Services, clarified why so few projects make the cut.
Why Most “Infrastructure” Projects Don’t Qualify
Here’s the uncomfortable truth: the vast majority of projects involving infrastructure development, community benefit, or public works do not qualify for the infrastructure set-aside.
“We’ve had projects that we’ve worked on in the past that have definitely fit that first type of definition—train lines, public works that definitely would seemingly be adding to the infrastructure,” Calabrese explained. “But when it comes down to it, it’s meeting that actual definition.”
A project can build critical infrastructure, provide enormous community benefit, create thousands of jobs, and involve government support—and still not qualify. The legal definition is far narrower than most people assume.
The Two-Part Test: Both Requirements Must Be Met
Infrastructure projects must satisfy two distinct requirements under the Reform and Integrity Act. Both must be met completely—there is no flexibility.
Requirement 1: Governmental Entity as Job Creating Entity
The project must be administered by a governmental entity—federal, state, or local agency or authority. But administration alone isn’t sufficient. The governmental entity must also:
- Serve as the Job Creating Entity (JCE) for the project
- Contract directly with the regional center or NCE to receive EB-5 capital
- Act as the borrower under a loan or recipient of equity investment
“It has to be the governmental entity that is going to accept the EB-5 money from the new commercial enterprise,” Hermansky clarified.
This means the governmental entity cannot simply sponsor or support a project—it must take the primary operational role as the entity creating jobs and receiving EB-5 funds.
Why This Eliminates Most Projects: Traditional EB-5 structures place private developers or operating companies in the borrower and JCE roles. Even with significant government involvement—government land, tax incentives, regulatory approvals—if the private entity is the borrower and JCE, it doesn’t qualify.
Requirement 2: Public Works Project
The project must involve “maintaining, improving, or constructing a public works project.” Examples include:
- Roads, highways, and bridges
- Parks and public recreational facilities
- Public transportation systems
- Community redevelopment areas
“It’s not just a highway or a bridge,” Hermansky emphasized. “It’s taking some space and then doing something to it to elevate it for better public use.”
Why This Still Isn’t Enough: Many projects meet the public works definition. The challenge comes when combining it with Requirement 1. A private company can build roads or parks—but unless a governmental entity is the borrower and JCE, it won’t qualify.
Why Public-Private Partnerships Are Problematic
Public-private partnerships (PPPs) face a fundamental structural challenge: USCIS has not provided clear guidance on whether they can qualify.
“A number of times we’ve asked the agency actually if a partnership could work as an infrastructure project. And USCIS has not given any guidance,” Hermansky noted.
Critical Unanswered Questions:
- Can a joint venture between government and private entities serve as the JCE?
- If a project has both public and private components, can the public portion qualify?
- Can a special purpose entity created by government for a specific project qualify?
- Does the governmental entity need to be the majority owner or just a participant?
Given this uncertainty and strict statutory language, the conservative approach is to assume only projects fully administered by governmental entities will qualify.
Real-World Examples: What Fails and What Would Need to Change
Example 1: Private Developer with Public Plaza
❌ Structure That Fails:
- Private developer borrows $50M EB-5 capital for development with public plaza
- City provides tax incentives and approves project
- Developer serves as borrower and JCE
Why It Fails: Private developer is the borrower and JCE.
✅ What Would Need to Change:
- City government must borrow EB-5 capital directly
- City serves as JCE, hiring developer as contractor
- City owns and maintains plaza
- Jobs created by city contracts, not developer operations
Example 2: Public Transportation with Private Operator
❌ Structure That Fails:
- Private company develops light rail line with government approvals
- Borrows $100M in EB-5 capital
- Company operates transit and creates jobs
Why It Fails: Private company is borrower and JCE.
✅ What Would Need to Change:
- State/municipal transit authority must borrow EB-5 funds
- Transit authority serves as JCE
- Private company acts only as contractor
- Authority controls all decisions and fund deployment
Example 3: Public-Private Highway Partnership
❌ Structure That Fails:
- State creates partnership with private construction firm
- Partnership borrows EB-5 capital for highway expansion
- Joint venture serves as borrower and JCE
Why It Fails: Partnership structure muddies governmental entity status.
✅ What Would Need to Change:
- State Department of Transportation must be sole borrower
- State agency serves as JCE without partnership structure
- Private firm acts purely as contractor – No joint venture or shared ownership
What “Administered By” Actually Means
The requirement that projects be “administered by” a governmental entity demands operational control at every level:
Active Management: Direct all project operations, make key decisions, control project execution, manage contractors
Financial Responsibility: Sign loan documents as borrower, receive EB-5 capital directly, bear repayment obligations, control disbursements
Job Creation: Serve as the actual JCE, employ workers or contract for services, meet job creation requirements, document jobs for USCIS
This level of involvement is rare because most infrastructure development happens through private contractors with government contracts, public-private partnerships, or government-backed financing with private developers—all structures that likely fail to meet the standard.
Projects That Could Actually Qualify
- Municipal Park Development: City government borrows EB-5 funds directly, city serves as JCE and hires contractors, jobs created through city construction contracts, city has full operational and financial control
- State Highway Improvement: State transportation department receives EB-5 investment, state acts as JCE and contracts construction work, no private entity involvement in borrowing or JCE role
- Federal Infrastructure Initiative: Federal agency (like Army Corps of Engineers) borrows EB-5 capital, agency serves as JCE for public works project, full federal control of project
- Municipal Utility System: Municipal utility authority receives EB-5 funds, authority acts as JCE and oversees upgrades, authority is true governmental entity with borrowing capacity
Key Verification Steps for Investors
When evaluating a project marketed as an infrastructure set-aside:
- Review Offering Documents: Who is named as borrower? Is it explicitly a governmental entity?
- Confirm JCE Status: Is the JCE 100% governmental with no private participation?
- Understand Fund Flow: Does EB-5 capital go directly to governmental entity accounts?
- Examine Public Works Element: What is the public benefit? How does it serve the community?
- Assess Legal Opinions: Has this structure been approved before? What precedents exist?
Why This Matters for Immigration Success
Projects that don’t meet the requirements won’t receive set-aside benefits:
- Higher investment threshold ($1,050,000 vs. $800,000)
- No access to infrastructure visa allocations (200 annual visas)
- Potential petition denials – Possible reclassification to non-set-aside
As Calabrese emphasized, “Qualifying for the actual set-aside is different and it’s difficult. Finding things that actually meet those criteria can be difficult.”
The Bottom Line
The infrastructure set-aside has a narrow, specific definition. Both requirements—governmental entity as JCE and public works project—must be satisfied completely.
Most projects involving infrastructure development, even with significant public benefits and government support, do not meet this standard because they involve private entities in critical borrower or JCE roles.
While this strict definition limits qualifying projects, it also creates confidence that properly structured infrastructure set-asides will receive USCIS approval and access to dedicated visa allocations.
For investors, understanding why most infrastructure projects fail to qualify—and what specific structural changes would be needed—is essential to identifying the rare legitimate opportunities and avoiding projects that claim set-aside benefits they don’t actually qualify for.
About the Speakers
Peter Calabrese is the Chief Executive Officer of CanAm Investor Services, LLC, the FINRA-registered broker-dealer affiliate of CanAm Enterprises, one of the most successful regional centers in the EB-5 program’s history. Prior to joining CanAm in 2015, Mr. Calabrese worked for 15 years in institutional sales and trading, focusing on equity derivatives and volatility products with firms including ICAP and WallachBeth Capital. He earned a Bachelor’s degree in Business Economics from Brown University and holds FINRA Series 7, 24, 63, and 66 licenses. Under his leadership, CanAm Enterprises has raised over $3 billion in private placement funds and created more than 100,000 U.S. jobs through its EB-5 projects.
Jennifer Hermansky is a Shareholder at Greenberg Traurig LLP in Philadelphia, where she focuses on employment-based immigration and leads the firm’s EB-5 practice. She has structured over $3 billion in EB-5 capital raises and has successfully guided thousands of families through the EB-5 process, filing I-526, I-526E, and I-829 petitions for both regional center and direct EB-5 investors. Currently serving as the National EB-5 Committee Chair for the American Immigration Lawyers Association (AILA), Ms. Hermansky is a recognized thought leader who frequently speaks at national and international conferences. She has been named to EB5 Investors Magazine’s “Top 25 Attorneys” multiple times since 2013 and earned her law degree cum laude from Drexel University’s Earle Mack School of Law.
