EB5 Investor Visas

Green Card Investors: The EB5 Employment Creation Immigrant Visa

There are only 4 ways to obtain permenent residence or a “green card” in the US and one of these is through employment. The “EB5” is the fifth preference classification in the employment-based system. It’s important to note that the official title of the EB5 category is the employment creation immigrant visa because the emphasis is not on the amount invested but the jobs created. Whether you are investing $500,000 or several million, each investor is still responsible for establishing that he or she created or retained at least 10 jobs for American workers.

The U.S. currently has two variations of the EB-5 program; the Regular program and the Regional Center program. To qualify for a green card under the Regular program, the following three basic requirement must be met: investment in a new commercial enterprise; investment of at least $1million (or $500,000 in certain cases) into the business, and creation of employment for at least 10 fulltime U.S. workers. The investor will play a direct management role in directing and developing the investment enterprise to create the requisite jobs.

Investments may inlcude various forms of capital such as cash, equipment, inventory, property and other tangible assets. The original programs call for investments of at least $1million, but $500,000 is permissableto qualify if the business is located in a specific Targeted Employment Area (“TEA”). A TEA means a geographical area that has experienced unemployment of at least 150 per cent of the national average rate or a specifically defined rural area.

The second program within the EB5 category is called a Regional Center program. This variation does not require the investor to play a direct management role. In fact, the investor is normally one of a number of limited liability partners and is involved in setting company policy but not in the day-to-day decisions of running the company operations. Additionally, the Regional Center program allows for an expansive reading of the requirement to create or retain at least 10 fulltime US jobs. It permits indirect employment creation and enables the investor to qualify by proving a combination of 10 direct and/or indirect employees who are new to the Regional Center.

Moreover, since the investor does not play an active daily management role in the US business operations, he or she is not required to live in the place of investment, thus allowing the investor and family the total freedom of choice and ability to live and/or work anywhere in the US. The Regional Center concept has proven to be the closest thing the US has to offer as a retirement option.

Each Regional Center program must be pre-approved by the US Immigration Service to enable individual investors to become eligible to qualify for green cards or permanent residence. This should not, however, be interpreted that the Regional Centre investment has been “underwritten” or “guaranteed” by the US Immigration Service. Simply that the Regional Center has met the basic regulatory requirements for the program. There are now over 200 Regional Center programs.

The procedure for filing an EB-5 Investor Regional Center Green Card petition is relatively clear-cut. Each applicant is responsible for documenting his or her source and transfer of funds from the investor directly to the enterprise. The money can be the investor’s own personal funds or can be a loan or a gift, thus permitting a parent to gift a son or daughter the funds for investment, for example. Once the investment is made, the investor files a petition with the US Immigration Service to qualify for eligibility for the EB5 Green Card. The government will then consider the application and, if approved, the investor will then file a personal application to claim the green card based on the EB5 eligibility. This is typically done from either within the US or at a US Consulate in the investor’s home country. The entire process generally takes less than one year.

The investor will be given a green card which is valid for a period of two years. At the end of the two-year period, the investor will submit a second petition to the US Immigration Service to seek to have the two-year condition lifted and have full permanent residence granted. At that time, the applicant must show that his or her investment created or retained the 10 full-time jobs in the US.

In summary, this is an excellent way for those with suitable funds to risk to seek permanent residence in the US. That said, it is especially critical for any investor to conduct a full and thorough due diligence of any prospective investment to ensure that not only will the funds be invested as described, but also that the project is viable, will create the required 10 US jobs within the two year period, is likely to provide a return on the investment, offers an exit strategy at some future point and is highly likely to lead to the main goal, i.e., permanent residence in the US. With an investor choosing wisely and understanding the risks and benefits involved, it is a program that should be considered as an option for green cards.