The EB-5 Immigrant Investor Visa Program, provides a method for eligible Immigrant Investors to become lawful permanent residents — also known as “green card” holders — by investing at least $1,000,000 to finance a business in the United States that will employ at least 10 American workers. Most immigrant investors who use the EB-5 program invest in a targeted employment area (TEA) a rural area or area with high unemployment — which lowers the investment threshold to $500,000.The EB-5 program is intended to encourage both foreign investments and economic growth.
Applicants have the choice of investing individually or they can choose to work through a Regional Center (RC), which is a federally approved third-party intermediary that connects foreign investors with developers in need of funding, and take a commission. Regional centers are usually private, for-profit businesses that are approved by the U. S. Citizenship and Immigration Services (USCIS). If an EB-5 investment is made in a regional center, the jobs may be created indirectly through economic activity, as opposed to a direct investment, where the investment vehicle must directly employ the 10 U.S. workers.
Most investors — about 80 percent — come from five countries — China, South Korea, Taiwan, United Kingdom, and Hong Kong. Others have come from Canada, India, Mexico, Iran, Japan, Central, and South America. EB-5 investors who use RC intermediaries are free of the day-today active management of a business. Investors who are concerned about maximizing profits should consider investing individually in their own company.
Job Creation Requirements
An EB-5 investor must invest the required amount of capital in a company that will create full-time positions for at least 10 qualifying employees.
- For company not located within a regional center, the full-time positions must be createddirectly by the company.
- For a company located within a regional center, the full-time positions can be created either directly or indirectly.
- Direct jobs are those jobs that establish an employer-employee relationship between the company and the persons it employs.
- Indirect jobs are those jobs held outside of the company but that are created as a result of the company.
- In the case of a troubled business, the EB-5 investor may rely on job maintenance.
- The investor must show that the number of existing employees is being, or will be, maintained at no less than the pre-investment level for a period of at least 2 years.
Capital Investment Requirements
Capital means cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur is personally and primarily liable and that the assets of the company upon which the petition is based are not used to secure any of the indebtedness. All capital shall be valued at fair-market value in United States dollars. Assets acquired, directly or indirectly, by unlawful means (such as criminal activities) are excluded.
The immigrant investor must establish that he or she is the legal owner of the capital invested. Capital can include a promissory note that is guaranteed by other assets owned by the investor.
Required minimum investments are:
- General. The minimum qualifying investment in the United States is $1 million.
- Targeted Employment Area (High Unemployment or Rural Area). The minimum qualifying investment either within a high-unemployment area or rural area in the United States is $500,000.
To summarize, there are several options to obtain Lawful Permanent Residence (Green Card) through investment, as follows:
- Passive Investment: Invest $500,000 in a Regional Center project, normally as a five-year loan, which typically pays between .5% and 1% interest per year.
- Active Investment: Invest $1 million in your own business and create 10 jobs over a two to three year period.
- Active Investment: Invest $500,000 in your own business that is in a high unemployment or rural area, and create 10 jobs over a two to three year period.
- Targeted Employment Area A “Targeted Employment Area” is defined as one in which unemployment is 150% of the national average. We work with state governments to help your business meet this definition, by taking into account areas of high unemployment that are close by, even though your operations are not within a jurisdiction with a high rate of unemployment.
- Troubled Business: If your company has suffered a 20% loss of its net worth in the past 12 or 24 months, you can invest funds in order to preserve existing jobs, instead of creating new jobs. We find this approach to be especially useful for companies in the process of building their business, which have not yet realized a profit.