EB5 Investment Options

Flexible options for EB-5 Investors

An EB-5 visa—also known as an investment visa—has become very popular among wealthy individuals and their family members who seek to get permanent residency and green cards or United States citizenship through a substantial investment in a commercial enterprise.

In 1990, the U.S. Citizenship and Immigration Service (USCIS) created the EB-5 program to promote economic growth within the U.S. with new job creation. The EB-5 immigrant visa has changed through the EB-5 Reform and Integrity Act into a program that specifically helps foreign investors and their family members to obtain permanent residency in the United States through the job-creating investment process.

EB-5 investors should conduct due diligence on the two different EB-5 investments: regional center investments and direct investments. Both visa investment options can be funded using wages, business profits, individual gifts, and other means. Proof of these funds, such as tax returns and business documents, will be required for each type of funding used.

EB-5 visas issued and adjustments of status by year

Source: https://www.imidaily.com/intelligence/eb-5-special-how-the-2022-program…

Direct Investment

While most EB-5 investors choose to invest through regional centers, there is a smaller percentage that chooses to invest through direct investment. EB-5 investors who invest through a direct investment will be legally required to place their investment capital into a commercial enterprise that creates at minimum 10 new full-time direct jobs per investor. This investment can be made alone or with a group of investors. However, each investor is responsible for the creation of 10 full-time jobs.

These full-time jobs must be able to sustain at least 35 working hours per week, and the position must last for at least two full years. A commercial enterprise can be organized in several ways, such as a joint venture, sole proprietorship, limited liability company, or partnership. The minimum investment amount is $800,000 if the location of the new commercial enterprise or an existing company is in a targeted employment area (TEA); if it is not located in a TEA, the minimum investment amount jumps to $1,050,000.

Regional Centers

EB5 Regional CentersA large percentage of EB-5 investors seeking an EB-5 visa have a preference for the regional center program option for their capital investment. Investing in EB-5 projects that are sponsored by USCIS-approved EB-5 regional centers count all indirect, direct, and induced jobs that are created from the EB-5 investment project.

EB-5 investors prefer the method of job calculation that goes along with regional centers. This method often results in additional jobs being made available per investor and significantly lowers the immigration risk for all involved EB-5 investors. Similar to direct investment, $800,000 is the minimum qualifying investment if the location of the new commercial enterprise is in a TEA. If the project is not in a TEA, it is $1,050,000. Similar to the direct investment method, an equity investment towards a new commercial enterprise created through a regional center can be organized in several ways.

Regional Center versus Direct EB-5 Investment

For most EB-5 visa investors, deciding on the financial risk of investing through regional centers or a direct investment is a relatively easy decision.

Most often, direct investment is the preferred method by foreign investors to create and run a commercial enterprise of their own in the U.S. These EB-5 investors wish to have more control of their investments with the hopes of building a successful business. Among direct EB-5 investors, a common goal is to eventually expand the operations of their own business into the U.S. and increase profits.

Regional Center versus Direct EB-5 InvestmentOftentimes, this means an investor plans to invest in a business-friendly urban area that could potentially qualify as a targeted employment area due to the rate of local unemployment. Unfortunately, most foreign investors are not looking at rural areas to start new commercial enterprises, even though a rural area would instantly qualify as a TEA. If an EB-5 investor chooses not to build their business in a TEA location, their investment will be $1,050,000 rather than $800,000. Typically, investors who prefer to operate independently and have more control of the investments find that direct EB-5 investments make more sense for them.

By far, the method of EB-5 equity investment into the regional center is the most popular because each EB-5 visa investor is allowed to take part in a new commercial enterprise with as little to no responsibilities as daily management. Regional center investments pool multiple EB-5 investors who together make an investment towards a new commercial enterprise or into real estate projects.

Since the capital in a regional center project oftentimes is a minimal portion of the capital of the total project, this approach of pooled investment usually results in potential security for the EB-5 visa investors, providing over the per investor requirement of 10 jobs. This potential security reduces an EB-5 investor’s stress. Whereas those who choose a direct investment, have a personal responsibility to meet the per-investor-required 10 jobs.

Differences in Investor Filing Processes for Regional Center versus Direct Investments

The visa application process for submitting immigration applications is different for EB-5 investors between a regional center investment and a direct investment.

An EB-5 investor who seeks to make a direct investment is able to submit their visa application on their own. Therefore, direct EB-5 visa investors are generally responsible for gathering all supporting documentation for any investment of commercial enterprises.

An EB-5 investor seeking permanent resident status through a regional center investment will have to work with the regional centers to correctly prepare and obtain the required documentation for the project in which the equity investment was selected.

EB-5 investors who work with regional centers are not required to prepare any documentation that is project-specific because all required project documentation has been assembled and completed by the regional center.

Frequently Asked Questions

What Is the Process For Obtaining a Permanent U.S. Residence?

There are four main steps to the EB-5 application process.

  1. Make your selection of an EB-5 project- direct investment or regional center investment.
  2. File form I-526 or I-526E the investor petition for an immigrant investor visa that allows a foreign national to reside in the U.S.
  3. Upon approval of your petition, you will receive a green card, a conditional permanent residency that will last for two years. A re-entry permit is required if an investor travels abroad for over one year. To enter the United States, you will need to file a DS-260 form in your home country or an I-485 form if you are currently living in the U.S.
  4. File form I-829 to remove any conditions placed on your green card. This must be done two years after you have obtained your conditional permanent residency.

How Much Will It Cost Me?

In addition to the minimum investment amount, there are additional fees you will be required to cover through conventional currency. There are administrative fees collected by the national visa center that averages $70,000, immigration attorney fees of anywhere from $15,000- $25,000, as well as a USCIS filing fee of $3,675.

How Long Should It Take To Get a Green Card?

The processing of an I-526 can take around four to five years.

Can I Expect a Return on My Investment (ROI)?

EB-5 visa investments have varying levels of return potential. Some investments can cap the return immigrant investors will receive, possibly a potential maximum return of no more than 1% per year. Other investments have the goal of providing more opportunities and have the potential to earn higher returns. Give careful consideration and perform due diligence on your offering documents and investment options with your EB5 Visa Lawyer to identify which investment is right for your goals and risk tolerance.

Typical Investments Have a Higher ROI So Why Are EB-5 Investments Different?

EB-5 capital is lower due to the cost of properly structuring an EB-5 investment as well as the uncertainty of when EB-5 funds will become available for the project. To offset these less attractive factors of EB-5 investment visas, a strong project requires significant savings on the cost of EB-5 capital. The savings are reflected in the return investors are offered.

How Can Our Law Firm Help?

Our attorneys at EB5 global adventures have a track record of excellence thanks to our knowledge and experience with immigration. As immigrants who speak multiple languages, we understand the desire and timeliness of your goal to gain permanent residency status. We want to maximize the chance you have to achieve your goal of immigrating to the United States.