An alternative path to U.S. immigration might be available to foreign investors using an investment visa to get to the United States. The longest running of the many investment options is the EB-5 Immigrant Investor Program, which links eligible investment to employment creation to eventually reach permanent U.S. residence if all criteria are satisfied.
EB-5 is both an immigration and investment program so investors need to learn everything about the program, investment structure, project prerequisites, and risks, before they decide to participate.
What Is the EB-5 Program?
The EB-5 program enables eligible foreign investors to apply for permanent residence by investing in a qualifying new commercial enterprise and creating a minimum of 10 qualifying full-time jobs for US workers.
The program is handled by the United States Citizenship and Immigration Services (USCIS). For investment purposes investors have to submit proof to demonstrate that they are able to comply with the relevant standards, including investment standards and requirements concerning the legitimate origin of money.
An EB-5 investment is not necessarily a guaranteed pathway to a green card. Simply making the investment does not create the right to immigrate. The investor must satisfy the legal and necessary conditions and go through the immigration process.
What Is the EB-5 Regional Center Program?
The EB-5 Regional Center Program gives investors the opportunity to invest in eligible projects through the USCIS-designated Regional Centers.
A Regional Center is an entity approved by USCIS to facilitate economic development through eligible EB-5 investment activity within a specified geographic region.
Although there are similarities between a Regional Center investment and a direct EB-5 investment, the demonstration of job creation is a major distinction. In accordance with the requirements, Regional Center investors can use supplemental indirect job creation analysis, which relies on recognized economic methods.
That doesn't mean every investment made by an investor through a Regional Center is suitable or even that the investor's immigration application will be approved. As such, investors need to consider each project, the investment structure, documentation, and risk.
EB-5 Investment Requirements
Depending on the type and location of the investment, the investment amount needed varies.
The EB-5 minimum investment range at the moment is $1.05 million. For a targeted employment area (TEA) or applicable infrastructure project, the minimum is $800,000.
In addition to the investment requirement, investors must also satisfy the relevant requirements related to the new commercial enterprise, job creation, source of funds, and other requirements.
The documentation of the source of funds is probably the most important, source-of-funds information. Investors may be required to demonstrate the source of funds used to fund an investment, and the journey that the capital takes to arrive at the targeted destination. Supporting information can include tax information, bank records, business documents, property sale documents, inheritance documents, etc.
Understanding EB-5 Projects
Projects can be in any industry including real estate, hospitality, infrastructure, healthcare, manufacturing, and commercial businesses.
Every single project has a different business model, capital structure, development schedule, and risk profile. As a result, all investors should perform project-level due diligence rather than jumping on any opportunity simply because it is tied to a Regional Center.
Before investing, review important information such as:
- Business plan and project structure
- Capital stack and financing
- Sources and uses of funds
- Job-creation methodology
- Project development status
- Investment terms
- Potential financial risks
- Exit and repayment strategy
- Economic analysis
- Regional Center and project documentation
An independent professional review may assist the investor by providing a perspective on the immigration and financial aspects of an investment.
How Does the EB-5 Visa Process Work?
EB-5 visa process The steps in the EB-5 visa process can vary significantly depending on the investor's situation and immigration status.
1. Choose a Qualifying Project
Investor investigates the project they are interested in, and familiarizes themselves with the business and immigration documentation of the project. Financial and legal investigation is required before injection of capital.
2. Document the Source of Funds
Documentation required: The investor should attach proof that the invested funds were acquired legally. The specific documentation required will vary according to the origin and origin of the investment.
3. File the EB-5 Petition
What petition do investors file if they are investing through a Regional Center? Usually, investors file Form I-526E, Immigrant Petition by Regional Center Investor.
The petition must establish that the investor and investment are in compliance with the relevant EB-5 requirements.
4. Final Visa Processing or Adjustment of Status
In some cases, the investor may go through the immigrant visa process at a U.S. consulate, or proceed through adjustment of status if the investor is able to apply while within the United States.
The availability of visas can determine whether an applicant can move forward. Investors should check the current visa bulletin of the U.S. Department of State.
5. Meet Conditions for Permanent Residence
In most cases, approved EB-5 investors will be granted conditional permanent residence status before the investor completes the last step of the process. There are specific requirements that you must fulfill to have your removal of conditions approved.
Why Due Diligence Matters
Should You Think of EB-5 as Two Separate Things: Investing and Applying for Immigration EB-5 means both a big financial investment as well as an application for immigration. You should think about these as two separate issues.
A project in EB-5 can carry risk in the areas of construction, financing, market conditions, business performance, and others. Approval of the immigration petition is not an assurance that the capital will be repaid or the expected return will be achieved.
Prior to investing, prospective investors should read the offering documents, financial information, project financing, job-creation analysis, and exit terms of the plans for each product.
Alternatively, the investor may also consult with independent expert U.S. immigration attorneys and financial advisors to determine an appropriate course of action based on their circumstances.
Final Thoughts
Purchasing U.S. investment visas takes investigation, and with respect to the EB-5 program, research is fundamental. Find out about the EB-5 Regional Center Program, personal investigation of EB-5 ventures, how to record the lawfully obtained assets and the most effective method to go in the accompanying section.
The list of countries eligible for 3rd preference visa (2nd preference in case of immediate relatives of U.S. Citizens) per country is available here. The rules of EB-5 and availability of visas may change, and the investors should check official sources before making investment/filing an immigration petition.
