EB-5 – Investment Based Immigration

What is an EB-5 Investment Visa?

The EB-5 program, administered by the USCIS, allows an Investor and his/her immediate family members (spouses and children under the age of 21) the ability to become permanent residents of the United States by investing money into the United States. Investment must be either, a minimum of $500,000 if invested in a Targeted Employment Area, “TEA”, or a minimum of$1,000,000 if invested into any other area other than the TEA. INA Section 203(b)(5), 8 U.S.C. 1153, sets out the framework for EB-5 and its regulations are enumerated at 8 CFR Section 204.6.

EB-5 General Requirements for Private Investment

Entrepreneurs may make their own EB-5 investment in any geographic area of the United States. Such investments can be made in any of the following ways:

– Private Investment in a New Business Enterprise. Such investment has the following requirements:

• i. Investment must be at least $1,000,000 or $500,000 if new enterprise is located in a Targeted Employment Area
• ii. Such business must benefit the US economy by providing goods or services;
• iii. Create full-time employment for at least 10 qualified employees;
• iv. Investor must be involved in the day-to-day management or policy making.

– Investment in a Troubled Business

• i. Investment must be at least $1,000,000 or $500,000 if new enterprise is located in a Targeted Employment Area
• ii. Such business must have had a net loss of at least 20% for the last 12-24 months period prior to filing an application;
• iii. Such business must maintain the same level of employment that it had prior to investment for at least 2 years after the investment.
• iv. Such business must have existed for at least 2 years;
• v. Investor must be involved in the day-to-day management or policy making.

– Investment in the Expansion of an Existing Business

• i. Investment must be at least $1,000,000 or $500,000 if new enterprise is located in a Targeted Employment Area;
• ii. Such investment must EITHER
  • a. increase of at least 40 percent in the net worth of the business; or
  • b. Increase the number of employees of the business by 40%.

Type of Capital Investment

An investment can be in the form of cash, equipment, inventory, or other tangible assets. An investor may also offer secured debt, provided that he or she is personally and primarily liable, and provided that the commercial enterprise that is the subject of the EB-5 investment may not be used to secure any of the indebtedness.

EB-5 Immigrants may invest the required amount alone, create the qualifying business with another immigrant investor, or create the business with U.S. citizens. In situations of joint investors, each person seeking classification as an immigrant investor must individually contribute the required amount.

The ten new jobs must benefit U.S. citizens, lawful permanent residents or other immigrants lawfully authorized for employment in the United States. This includes conditional residents, temporary residents, refugees, and a limited number of other people. Nonimmigrant employees do not qualify. Full-time employees are those who are employed at least thirty-five hours per week in jobs that are expected to last at least two years.

Some of the advantages of investing in a private enterprise include having complete control over the business operation and in turn over your investment, direct involvement in the day to day management of the business.

Investment Through a Regional Center

Of the 10,000 EB-5 visas available to foreign investors, 3,000 are set aside specifically for those who invest through a Regional Center.

What is a Regional Center?
A Regional Center is an economic entity, it could be public or private, which is involved with the promotion of economic growth, improved regional productivity, creation of jobs and increased domestic capital investment. All Regional Centers must be approved by USCIS. As of June 2014, there are 532 regional centers which have been approved by USCIS. Regional Centers generally include resorts and service industries (hotels, casinos, resorts, restaurants, golf courses, etc.), as well as agriculture, manufacturing, real estate development, and medical technology development.

What are the advantages of investing into a Regional Center?

When an investments is made through a USCIS-approved Regional Center, the job creation requirement, although it still exists, itcan be indirect rather than by direct hiring. An economic analysis will be used to prove direct, indirect and/or induced job creation in a Regional Center. Another benefit of investing through a Regional Center is that the investor will not be required to be involved in the day-to-day operations of the business and in fact can live and/or work anywhere he or she wants.

Common Questions Concerning Regional Centers:

1. If I invest into a Regional Center, when will I get my money back?
Generally, investing into a project through a Regional center will yield in annual dividends of around 1%-7%, however, the investor can expect to get the full investment back within 5-6 year period. This is just an average number across the country. Recently, there have been reports from investors, who were able to recover their total investment in as little as 6 months to a year. However, it is very important to understand that an investment into a Regional Center, just like an investment into any business, carries a risk. An investor must understand that he or she could lose all or part of this investment. No Regional Centers can guarantee an investment will be returned.

2. Do I have to reside in the State where the Regional Center is located?
One of the most appealing aspects of investing into a Regional Center is that the investor and his or her family will not be required to be involved with hands on, day-to-day operations of the project. The investor, as well as his or her family, if any, will be free to live in any state in the US with very little, if any, operational duties.

3. What kind of projects can I invest in through a Regional Center?
Regional Centers offer hundreds of different project opportunities, which range from real estate, casinos, ski resorts, manufacturing, agricultural developments, restaurants, sport stadiums, and many more.

In recent years, the EB-5 program has evolved from relative obscurity to an unprecedented surge in popularity. There are 10,000 EB-5 visas available annually. In the last years, the amount of EB-5 visas issued nearly doubled from recent years. For example, in 2012, nearly 8,000 EB-5 visas were issued. EB-5 Visas are gaining popularity more and more with each passing year due to new projects that are opening up and availability of various types of investments which have something for everyone.

If you are interested in additional information and want to learn about the EB-5 Visa program, please contact our office and we will gladly go over all details with you.