EB-5 is an investment based immigration program where foreign investors who invest in the United States and create jobs for American workers can achieve permanent residency or a “Green Card“. 

EB-5 Regional Center:

An EB-5 Regional Center is an organization designated by United States Citizenship and Immigration Services (USCIS) that sponsors capital investment projects for investment by EB-5 investors.  The major advantage for regional center designation is that the regional center can take advantage of indirect job creation. Regional centers help EB-5 investors and project developers because they lessen the difficulty of meeting qualifying job creation requirements under the EB-5 program rules.

EB-5 by the Book:

An immigrant investor who invests $1 Million (or $500,000 in a target employment area) and creates 10 jobs for American workers can achieve permanent residency (or green card) for themselves and qualifying family members. To qualify as an “investment” the investor’s project is required to have risk. Many countries have investment immigration programs but the most popular programs are that of the United States, Australia, Canada and United Kingdom.

The program has various requirements and stipulations such as how the jobs are counted, what documentation needs to be provided and more. There are 2 styles of investment, investing directly or through a federally-designated Regional Center. When investing directly, the investor makes a direct investment into a job creating company. When investing directly, the investor must invest at least $1 Million and can only record jobs that are created through direct hiring of employees.

A USCIS approved Regional Center is a vehicle that has gone through a sort of pre-approval process with USCIS. The Regional Center pilot program’s core purpose is to make the EB-5 investment process easier for the investor, more streamlined for USCIS approvals and further promote U.S. economic growth. The Regional Center essentially can take all the management and job creation responsibilities out of the hands of the investor. The Regional Center is a powerful job creating entity that is granted the capability to pool multiple investors together like a “fund”, and create jobs in multiple direct and indirect capacities. Regional Centers can also invest in Target Employment Areas (TEA’s) which drops the minimum initial investment amount to $500,000. Over 90% of all EB-5 investments go through Regional Centers.

The EB-5 investment is split into 2 phases. In the beginning, the investor is granted a conditional or “temporary” green card. After 2 years and successfully creating 10 jobs through their investment, the conditions are removed and a “Permanent” green card is given to the investor. If investing through our Regional Center, we make this process simple for the investors to complete.

Foreign investors must meet specific United States Citizenship and Immigration (USCIS) requirements to obtain their permanent residency through the EB-5 visa program. In general, the investor must meet capital investment amount requirements, job creation requirements, and ensure that the business receiving the investment qualifies for the EB-5 program. EB-5 visa applicants, their spouse, and their children under 21 will obtain their permanent residency green card once all requirements have been successfully met and approved by the USCIS.

EB-5 Visa Requirements Summary::

  • $1 million capital investment, $500,000 in a TEA

  • The investment must be made in a for-profit U.S. commercial entity

  • The investment must create 10 full-time U.S. jobs for two years

Required EB-5 Investment Amount:

EB-5 visa applicants are typically required to make either a $500,000 or $1 million capital investment amount into a U.S. commercial enterprise. The EB-5 investment can take the form of cash, inventory, equipment, secured indebtedness, tangible property, or cash equivalents and is valuated based on U.S. dollar fair-market value.

The minimum amount of capital required for the EB-5 visa program may be decreased from $1 million to $500,000 if the investment is made in a commercial entity that is located in a targeted employment area (TEA). The EB-5 project must either be in a rural area or in an area that has high unemployment in order to qualify for TEA designation.

High unemployment areas are geographic locations with an unemployment rate that is at least 150 percent of the national unemployment rate at the time of the EB-5 investment. Rural areas are geographic regions that are outside of a city with a population of 20,000 or more. Rural areas can also be geographic regions that are outside of what the U.S. Office of Management and Budget has designated as metropolitan statistical areas.

EB-5 Job Creation Requirements:

The USCIS requires that EB-5 investments result in the creation of 10 full-time jobs for U.S. workers. These jobs must be created within the two year period after the investor has received their conditional permanent residency. In some cases, the investor must be able to prove that their investment led to the creation of direct jobs for employees who work directly within the commercial entity that received the investment.

 

However, the EB-5 investor may only have to show that 10 full-time indirect or induced jobs were created if the investment was made in a regional center. Indirect jobs are those created in businesses that supply goods or services to the EB-5 project. Induced jobs are jobs created within the greater community as a result of income being spent by EB-5 project employees.

EB-5 Business Entities:

There are several types of business entities in which an EB-5 visa applicant can invest. In general, the applicants can invest directly in a new commercial enterprise or in a regional center. New commercial enterprises are lawful for-profit entities that can take one of many different business structures. Such business structures include corporations, limited or general partnerships, sole proprietorship’s, business trusts, or other privately or publicly owned business structures. All new commercial enterprises must have been established after November 29, 1990.

However, older commercial enterprises may qualify if the investment leads to a 40-percent increase in the number of employees or net worth, or if an older business is restructured to such a degree that a new commercial enterprise results. In addition to individual business enterprises, EB-5 visa applicants can also invest in EB-5 Regional Centers. Regional centers administer EB-5 projects. It may be more advantageous for an investor to invest in a regional center-run project because the investor will not have to independently set up the EB-5 projects.

NOTE TO POTENTIAL INVESTORS:

If you do not have $500K available in cash, the best options to fund your investment is through a Gift:

Gifted funds are acceptable for EB-5 investment. Please note that the giftor may be subject to gift-tax. So long as the giftee resides in the U.S. and the giftor resides outside the U.S., gift-tax can be mitigated by filing a 3520 form. You will need to show how those funds were accumulated by the giftor through their tax returns on your source of funds report. We always recommend consulting with a tax professional to determine the tax implications of fund transfers. 

FOR REAL ESTATE DEVELOPERS:

Does EB-5 Work for my Real Estate Project? 

Answer is Yes. EB-5 can work for any project as long as the job creating entity can prove through verifiable means that the EB-5 investors investment will create at least 10 jobs. 

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