Every EB-5 investment carries inherent risks. These risks vary across different project types but can generally be categorized under two groups: immigration risk and financial risk.

These two risk categories align with the primary motivations for EB-5 investors. The main reason why foreign nationals invest in EB-5 projects is U.S. immigration, so immigration risk is the first consideration.

Additionally, with a substantial amount of money involved, protecting this investment is crucial, leading us to the second consideration—financial risk.

EB-5 investors are advised to meticulously evaluate the immigration and financial risks associated with any EB-5 project. It’s crucial to steer clear of projects that present high levels of either type of risk. Fortunately, there are low-risk projects available, and investors are encouraged to be discerning in their choices.

In this article, we will explore the two types of risks involved in EB-5 investments, and delve into what investors can do to mitigate these risks.

What Is Immigration Risk?

Immigration risk involves any factor that could hinder an investor’s main objective of securing a permanent Green Card to become a lawful permanent resident in the United States.

Mitigating immigration risk means tackling the key factors that lead to the denial of EB-5 immigrant petitions. Individual risks for EB-5 investors arise from their background and the accuracy of their petitions. Petitions can be rejected by the United States Citizenship and Immigration Services (USCIS) for reasons such as fraud, false representations, illicit sources of EB-5 investment capital, and other specific shortcomings related to an investor. To minimize these personal risks, EB-5 investors are advised to carefully choose their immigration counsel.

For investors who submit accurate applications in good faith, in addition to having clean backgrounds and legitimate source of funds, the most common reasons for the denial of EB-5 immigrant petitions involve lapses in compliance by regional centers or issues with the project itself, particularly a failure to generate the required number of jobs.

Compliance with EB-5 Requirements

USCIS requires strict compliance with the EB-5 program’s regulations. Navigating the EB-5 rules has always been complicated, requiring expertise to successfully set up projects that are eligible for EB-5 investments. The enactment of the EB-5 Reform and Integrity Act of 2022 made it even more important to have an experienced and well-informed regional center sponsor to guarantee EB-5 compliance.

To minimize immigration risk, EB-5 investors are encouraged to choose projects associated with independent, third-party regional centers that are not affiliated with the project’s developers. It’s crucial that the operator of the regional center has considerable experience and a track record of meeting all EB-5 program requirements. Ensuring accountability is essential for establishing trust, so investors should choose projects where regional centers are committed to regular updates and value transparency.

Fulfillment of Job Creation Requirements

EB-5 immigration risk is closely linked to the requirement of job creation. The EB-5 program’s core objective is to spur economic growth within the United States, particularly in rural areas or regions with higher-than-normal unemployment rates. The program gauges economic development by the amount of money invested and the number of jobs created.

For an investor to be eligible for permanent residency, a minimum investment of $800,000 is required for projects in a targeted employment area (TEA), or $1,050,000 for projects situated outside of a TEA. A TEA is designated based on rural status or high unemployment levels.

Beyond the financial commitment, the EB-5 program requires the creation of at least 10 full-time, permanent positions for U.S. workers per investor. In the case of projects sponsored by regional centers, employment numbers are calculated using economic models. For these projects, both the jobs created directly by the project and those that come from the surrounding economic activity can be considered.

Investors are advised to steer clear of projects that only aim to meet the bare minimum job creation requirement. Projects that are expected to generate a significant number of additional jobs are preferable.

According to EB-5 regulations, investing in successful projects that have already created jobs is allowed. Therefore, the safest projects for investment are those that have already surpassed the job creation requirements for all prospective EB-5 investors.

What Is Financial Risk?

Financial risk refers to any factor that could jeopardize the complete return of the capital an EB-5 investor has placed into an EB-5 project.

To minimize financial risk, it’s essential to focus on the fundamental aspect of any investment: the ability of the developer to not only complete the project and achieve financial success but also to return all the invested capital.

Certain EB-5 projects are heavily reliant on EB-5 capital for their success, and without achieving a critical level of EB-5 investment, these projects may fail. These projects have not secured alternative financing to cover all necessary expenses and may struggle to find the required funding to proceed. Such scenarios pose considerable immigration and financial risks to EB-5 investors, as a project’s inability to reach completion as intended could lead to insufficient job creation and the potential partial or total loss of the investors’ funds.

Projects that exhibit the lowest financial risk to EB-5 investors are those that have already secured enough funding to ensure the completion of the development and/or operations and do not depend on EB-5 investments for their success. In these cases, EB-5 funds serve as an alternative to more costly financing options.

Choosing Projects with Minimal Risk

EB-5 investors should carefully assess projects and only select projects that offer excellent regional center compliance, have already created enough jobs for the maximum number of EB-5 investors, and are not reliant on EB-5 capital to succeed.

EB5AN is pleased to offer several such projects.

For more information on EB5AN’s best-in-class, low-risk EB-5 projects, please schedule a free one-on-one call with our team today.

South African citizens with the financial means for investment and a wish to relocate their families to the United States might find the EB-5 Immigrant Investor Program an attractive pathway. This program is often seen as one of the most straightforward and fast routes to securing the benefits and liberties that come with being a lawful permanent resident in the U.S.

Introduced in 1990 by Congress, the EB-5 program aims to stimulate economic growth and create jobs for American workers.

To qualify under the EB-5 program, an investor is required to invest a specified minimum amount of capital into a new commercial enterprise that will generate at least ten full-time jobs for American employees. This investment enables the investor and their immediate family members to gain permanent residency.

This status offers several privileges and rights similar to those of U.S. citizens, including:

• The liberty to live and work across the U.S.
• Access to U.S. healthcare and education systems.
• Comprehensive protection under U.S. law.
• The ability to travel internationally with ease.

Moreover, it sets the stage for eventual U.S. citizenship.

Each year, a set number of EB-5 visas are allocated, with a cap that restricts any single country to a maximum of 7% of the total visas to prevent monopolization by applicants from countries with high demand, such as China. This system leaves ample opportunity for nations with lower application volumes, such as South Africa.

This guide outlines the EB-5 program, addresses the potential obstacles South African EB-5 investors may encounter, offers solutions to these challenges, and explores the steps to secure permanent residency through the EB-5 visa.

Benefits of the EB-5 Green Card for South African Investors

There are several pathways for foreign nationals to get permanent residency in the U.S., granting them the right to live and work in the country without limitations. These pathways include:

• Becoming an immigrant investor via the EB-5 program.
• Marrying a U.S. citizen.
• Gaining approval as an immigrant worker.
• Obtaining refugee or asylum status.
• Securing a Green Card through the diversity lottery.

For South African nationals, investing under the EB-5 program opens the door to obtaining a permanent U.S. resident visa (Green Card), which also extends eligibility to their dependent family members (spouse and unmarried children under 21).

The EB-5 program requires a substantial investment into a new commercial enterprise (NCE) that positively impacts the U.S. economy. This investment threshold is set at $800,000 for projects within targeted employment areas (TEAs) or $1,050,000 for those outside of TEAs.

A core requirement of the EB-5 initiative is the generation of employment. Each investment must lead to the creation of at least 10 permanent, full-time positions for eligible U.S. workers, which must be maintained for a minimum of two years.

The EB-5 program offers two investment options: direct investment in an EB-5 project or through a regional center.

Regional centers are entities designated to oversee and channel EB-5 investments into qualifying new commercial enterprises. This model, often favored by South African investors and those from other countries, typically sponsors real estate projects and NCEs of significant scale, making it a prominent choice within the EB-5 community.

EB-5 Green Card Application Process

The initial step towards gaining permanent residency in the U.S. for an investor via the EB-5 program is selecting an eligible EB-5 project and regional center.

For investments in projects located within a targeted employment area (TEA), the investor is required to deposit the minimum investment of $800,000 into the regional center’s investment pool. The investor must prove that the investment funds are personally owned and have been acquired through lawful means, such as earnings, dividends, gifts, inheritance, real estate sales, or stock transactions.

Then, the investor must submit Form I-526E to the United States Citizenship and Immigration Services (USCIS), the federal agency managing the EB-5 program under the Department of Homeland Security, through an immigration lawyer.

In this submission, the investor needs to verify that:

• The necessary investment has been made in a project that meets EB-5 criteria.
• The investment, if at the $800,000 minimum, is in a project situated within a TEA.
• The investment funds were obtained legally.
• The investment will result in the creation of the required number of jobs.

Following the approval of Form I-526E, the investor is eligible for an EB-5 visa and must undergo a health screening. For those residing outside the U.S., a Form DS-260 immigrant visa application must be filed with the U.S. Department of State. Investors already in the U.S. on a non-immigrant visa should file Form I-485 instead. These investors may be eligible for concurrent filing of Form I-485 at the same time as their I-526E.

After the medical check and obtaining the EB-5 visa, investors can relocate to the U.S. as conditional residents, a status that is valid for two years.

To remove the conditional status, investors must file Form I-829 with USCIS within 90 days before the two-year Green Card expires. Approval of this petition grants the investor and their dependents lawful permanent residency and permanent Green Cards in the U.S.

South African EB-5 investors are eligible to apply for U.S. citizenship after living in the U.S. for five years. The two-year conditional residency also counts toward this time requirement.

History of EB-5 Visas for South African Nationals

In April 2020, the system of processing I-526E petitions on a first-come, first-served basis was revised in favor of a new approach that gives priority to petitions from countries with visas readily available, significantly benefiting South Africans by shortening their wait times.

There was a remarkable surge of 226% in the issuance of EB-5 immigrant visas to South Africans from the fiscal years 2017 to 2019. The subsequent decrease in the issuance of EB-5 Green Cards during 2020 and 2021 was mainly due to the global halt in consular services abroad triggered by the COVID-19 pandemic and the lapse of the regional center program.

The South African embassy and consulates then continued processing EB-5 Green Card applications, and the regional center program was reauthorized in June 2022.

With these issues resolved, it was anticipated that the EB-5 visa would regain its popularity among South Africans, seeing a significant uptick in interest and applications.

Based on the number of EB-5 visas issued via consular processing in the last three years, South Africa indeed has the highest number among African nations, with Nigeria and Egypt following closely behind. In FY2023, this number was 65 for South African investors, through consular processing alone. South Africans became the fourth largest EB-5 investor group among all countries to receive EB-5 visas during the first quarter of FY2024.

Obstacles South African EB-5 Investors Face

In addition to fulfilling the criteria of the EB-5 program, South Africans must navigate the foreign exchange controls implemented by the South African Reserve Bank (SARB), which monitors the movement of capital into and out of the country.

South African citizens aged 18 and above are allowed to transfer up to R 1 million abroad without needing a tax clearance from the South African Revenue Service (SARS) or SARB’s approval. This limit can be extended to R 10 million annually, if they obtain both SARB clearance and a tax clearance certificate for foreign investments.

For investments surpassing the R 10 million mark, South Africans are required to seek special approval from both SARB and SARS.

The EB-5 program’s minimum investment requirement of $800,000 for projects in a targeted employment area (TEA) is approximately R 15 million, exceeding the R 10 million threshold. However, investing in an EB-5 project in the U.S. offers South Africans the opportunity to earn returns on an active investment, along with the possibility of a timely capital return if the project is low-risk.

Given the significant financial implications of migrating to the USA from South Africa, prospective investors are encouraged to consult with an immigration lawyer who has extensive experience in the EB-5 industry.

How to Overcome These Obstacles

Despite restrictions imposed by the South African government on overseas money transfers, South African investors have options to move the necessary capital for an EB-5 investment.

• Investors with pre-existing funds in international portfolios may bypass the need for South African Reserve Bank (SARB) approval or tax clearance from the South African Revenue Service (SARS).
• Each adult South African is entitled to transfer up to R 10 million abroad annually for legitimate reasons. Investors can pool their allowable transfer limit with that of their spouse and/or adult children to meet the investment requirement each year.

It is advisable for EB-5 investors to engage with an experienced foreign exchange intermediary based in South Africa to ensure full compliance with SARS and SARB regulations.

Employing these strategies not only facilitates the transfer of investment funds but also ensures that the investor and their family members maintain eligibility for EB-5 visas, in line with United States Citizenship and Immigration Services guidelines, assuming all funds are legally sourced and properly documented.

Approximate Timeline for Approval

Every EB-5 investor should be prepared for their Green Card process to span multiple years, with the processing of the I-526E petition potentially extending over two years. That said, the processing times for any Green Card category by United States Citizenship and Immigration Services tend to change. This timeline can also heavily depend on the investor’s choice of EB-5 project; investing in a rural project can significantly reduce wait times.

Petitions from South African investors are also processed faster than those from countries facing EB-5 backlogs, as South Africa is in “current” status as of the April 2024 visa bulletin.

How to Start the EB-5 Process

As mentioned above, those investing in rural targeted employment area (TEA) projects may benefit from priority processing of their Form I-526E, which makes this an ideal time for South African investors to pursue permanent residency in the United States.

Prospective investors are encouraged to consult an immigration attorney who has experience with South African laws.

If you are a South African national, book a free call with our EB-5 team today to learn more about your options leading to an EB-5 Green Card.

The appeal of using EB-5 investment financing as a main source of funding is clear in many industries, such as business and real estate development. This is mostly because of the attractive, often below-market interest rates it offers.

The EB-5 Regional Center Program has significantly contributed to the growth of the EB-5 investment industry. This program allows EB-5 visa applicants to invest their funds through entities known as regional centers, which then distribute this capital to their business or real estate projects.

After a temporary halt in 2022, the regional center program was reinstated on June 24, 2022, by a decision from a U.S. federal district court. Since the regional center option has typically been the preferred choice for EB-5 investors, there has been a consistent upsurge in new regional center projects. This has also translated into more applications for new regional center designations or purchases of existing ones.

In this article, we will cover every aspect of EB5 regional center acquisitions.

Characteristics of the EB-5 Regional Center Program

The regional center model for EB-5 investments pools funds from several investors, allowing for larger-scale projects and typically decreasing the immigration risk for foreign nationals. On the other hand, the direct EB-5 investment model is limited to a single EB-5 investor.

A distinctive advantage of EB-5 regional center projects is the recognition of indirect and induced job creation. For EB-5 visa eligibility, an investor needs to show their investment contributed to the creation of a minimum of 10 jobs in the U.S. While direct jobs created by an EB-5 investment must be maintained for no less than two years on a full-time basis, regional center projects can also include indirect and induced jobs generated through construction spending and operational revenue in their job creation count. This method allows for the job creation criteria to be met through the documentation of construction expenses and verified revenue generation.

This flexibility in meeting EB-5 visa job creation requirements not only increases investors’ chances of visa approval but also boosts the attractiveness of regional center investments.

Benefits of Acquiring a Regional Center

Both private and public business structures, including limited liability companies (LLC) and limited partnerships (LP), are eligible to submit Form I-956 to obtain a regional center designation from the United States Citizenship and Immigration Services (USCIS). The I-956 submission is required to prove compliance with USCIS guidelines and to affirm that the regional center’s projects will advance the EB-5 program’s objectives of stimulating economic growth and creating jobs. Achieving regional center designation enables an organization to receive investments from numerous EB-5 investors and collaborate with top-tier businesses and real estate developers.

Minimized Costs

Receiving a regional center designation from USCIS comes with significant expenses. Filing Form I-956 requires a comprehensive business plan and economic analyses. As of April 2024, the application fee for Form I-956 and Form I-956F are set at $47,695.

However, acquiring an existing regional center bypasses the need for a new USCIS designation.

Immediate Access to EB-5 Capital

New regional center owners need to be prepared for the potentially long Form I-956 processing times. As of March 2024, no specific processing times are reported for this form on the USCIS processing times page. This might pose a challenge for entities like real estate developers who need to start raising EB5 capital without delay.

An established regional center for sale, on the other hand, could already have a good reputation among EB-5 investors and developers, making the capital raising process smoother. An existing EB-5 regional center that has a successful track record and is ready to receive funding is more likely to facilitate collaborations with EB-5 promoters, migration agents, immigration attorneys, and other industry professionals.

Purchases of approved regional centers typically occur through equity acquisition, where the regional center’s equity is completely transferred to the new owner, including both assets and liabilities.

Individuals who are interested in buying or selling a regional center must be aware of the complexity of these transactions, which require vast knowledge of corporate dealings, mergers and acquisitions, and EB-5 immigration law.

Promoting Your Regional Center for Sale

Owners who would like to sell their regional centers are advised to seek guidance from an EB-5 expert on the sales process. A skilled EB-5 specialist can facilitate connections with prospective buyers while ensuring compliance with USCIS regulations throughout the acquisition.

Regional center owners also have the option to approach other regional centers that may be looking to broaden their geographical reach. Platforms such as EB-5 industry websites, publications, and both in-person and virtual conferences offer great opportunities for promoting a regional center available for sale.

Managers intending to sell their regional center should remember that the new proprietors will inherit responsibility for any ongoing EB-5 projects sponsored by the regional center.

Due Diligence When Buying a Regional Center

The Importance of Thorough Due Diligence

Before making a purchase decision, potential buyers of a regional center need to conduct due diligence. They will assume the responsibility of overseeing active projects and ensuring compliance with USCIS regulations for accounting and transparency, adherence to marketing guidelines and the Securities and Exchange Commission (SEC) regulations, among other responsibilities related to the sponsorship of an EB-5 project.

It is also critical to understand that the capital from EB-5 investors must remain “at risk” in the project until the investor submits the I-829 petition to secure permanent residency status.

If a regional center on the market has been inactive for a long time, there’s a risk of USCIS terminating its designation because it fails to contribute to economic development and job creation.

Inspecting the Records of the Regional Center

Prospective buyers are advised to thoroughly review the regional center’s corporate, fiscal, securities, and legal documentation as part of their due diligence efforts. Essential documents for evaluation include:

• Organizational documentation such as articles of incorporation, formation and operating agreements, an Employment
• Identification Number (EIN) notice, and LLC agreements where relevant.
• Annual communications with shareholders, documentation of any mergers, acquisitions, or changes in administration, and an outline of the regional center’s management hierarchy.
• Documentation related to the regional center’s equity, such as stock certificates, stock purchase agreements, licenses pertaining to the issuance or transfer of securities, and promotional materials for the regional center’s financial offerings.
• Information on the regional center’s financial obligations, including debts, loans, and other liabilities.
• History of any legal disputes or audits that have involved the regional center up for sale.

Evaluating Documentation from USCIS

Inspecting the USCIS documentation of the regional center is also a critical part of the due diligence process. The seller is expected to provide the I-956 approval notice, Form I-956G, and any I-924A annual certifications previously submitted to USCIS, along with records of compliance audits and any major changes to the regional center’s management or operational framework post-designation. (The introduction of several new forms for regional centers by USCIS, following the EB-5 Reform and Integrity Act of 2022 in March 2022, means that existing regional centers might need to present older versions of these forms.)

If there have been any USCIS inquiries such as a request for evidence (RFE), a notice of intent to deny (NOID), or a notice of intent to terminate (NOIT), the seller must demonstrate that these were promptly and effectively addressed to resolve compliance issues. A regional center that has lost its USCIS designation is disqualified from managing EB-5 investments.

Navigating the Acquisition of Regional Centers

After the prospective buyer concludes the due diligence process and chooses to proceed with the acquisition, both parties are required to draft and prepare the necessary contracts and documentation for the transaction.

Usually, the buyer formulates the initial terms of the acquisition in a letter of intent (LOI) and forwards it to the management of the regional center for their consent. This document, which precedes the final purchase and sale agreement, outlines key details such as the agreed-upon purchase price, any escrow agreements, the potential involvement of a broker, and the specifics of the closing procedure.

The Role of Escrow in Transactions

If there is an arrangement for holding a portion or the entirety of the buyer’s funds in escrow prior to their distribution, both parties sign an escrow agreement. This contract details the conditions that must be fulfilled for the escrowed funds to be disbursed, specifies the bank acting as the escrow agent along with its responsibilities, and outlines the fees incurred throughout the escrow period.

A portion of the buyer’s funds might remain in escrow pending the USCIS’s approval of the Amendment of Regional Center Designation.

Finalizing the Purchase

For the transfer of the seller’s membership interest in the regional center to the buyer, both parties are required to sign an assignment of membership interest agreement. This document outlines the sale price and the specific portion of membership interest being transferred without recourse. Additionally, all members of the regional center’s management team must provide official resignation letters.

Next, a formal membership interest purchase agreement is signed by the parties. This agreement includes the terms from both the assignment of membership interest and escrow agreements. It confirms that the regional center being sold doesn’t have any hidden liabilities or major legal issues. It also includes details about any previous notices of intent to terminate (NOITs) issued, the responsibilities of each party in the event of a contract violation, and attachments verifying the regional center’s USCIS designation, its geographical operational scope, and other features.

Amendment of Regional Center Designation

A crucial element of the membership interest purchase agreement involves specifying the procedure for submitting the Amendment of Regional Center Designation to USCIS. This amendment informs USCIS about the changes in the regional center’s name and ownership, providing essential details on the ownership transition, the date on which the final sale agreement was formalized, and the new ownership framework of the buyer.

USCIS’s response to the regional center amendment could be an approval, a request for evidence (RFE), or a notice of intent to deny (NOID). The transaction documentation should include a well-defined plan for addressing any unfavorable decisions from USCIS. If the amendment faces rejection after all appeals and other administrative remedies have been exhausted, the buyer’s funds held in escrow may be returned.

If the amendment receives approval, the standard procedure is for any funds still in escrow to be released to the seller.

The sale of the regional center usually represents a material change, defined by USCIS as a considerable change in the regional center’s ownership structure. So, the buyer should be aware of how this change in ownership could affect investors in ongoing projects sponsored by the regional center. Investors in these active projects must be informed about the change in ownership.

Seeking Professional Assistance with Regional Center Acquisitions

When buying or selling an EB-5 regional center, seeking help from the right industry experts can make all the difference.

EB5AN is a leading EB-5 industry consultancy, project manager, and regional center operator. We own over 10 EB-5 regional centers that cover the entire continental United States, and we have facilitated the sale of over 10 regional centers. We encourage prospective EB-5 project operators and regional center owners to book a call with our EB-5 team to learn more about how to buy or sell an existing regional center.

The EB5 visa program offers one of the quickest routes to obtaining permanent residency in the U.S. It enables investors who make a substantial investment in the U.S. economy to secure Green Cards for themselves and their direct family members, including spouses and unmarried children under the age of 21. Holding permanent residency (Green Card) allows investors and their families to live and work anywhere in the United States, enjoy unrestricted travel, and removes the requirement for an H-1B visa, an employment sponsor, or a visa sponsor.

In this article, we will look into the details of how the EB-5 program works, its requirements, and the two types of EB-5 investments along with their pros and cons.

EB-5 Visa Application Process

After investing in a new commercial enterprise (any for-profit business started or restructured after November 29, 1990), participants of the EB-5 visa program must submit either Form I-526E or Form I-526. Following approval from USCIS, EB5 investors outside the United States need to file Form DS-260. Those who are already within the U.S. must file Form I-485, Application to Register Permanent Residence or Adjust Status. Since March 2022, investors residing in the U.S. are no longer required to wait for the approval of their I-526E petition before filing Form I-485; they have the option to submit both applications simultaneously.

EB-5 Investment Requirements

• EB-5 investments must either establish a new commercial enterprise, invest in an existing commercial enterprise, or revive a struggling business, with the latter requiring significant changes to the business.
• EB5 investments need to generate a minimum of 10 employment opportunities for individuals authorized to work in the United States. These positions must be full-time, and should be maintained for at least two years. Although each job must be sustained for two years, it doesn’t have to be the same employee who occupies the role throughout this period. Employment of investors’ family members within the business does not count toward the job creation requirement.
• EB-5 investors must demonstrate the lawful acquisition of their investment capital, such as earnings or gifts, through detailed evidence including bank records and tax documents.

Comparing Direct EB-5 Investments and Regional Center Projects

EB-5 investments come in two forms: direct investments and investments within a new commercial enterprise that is sponsored by a regional center. Each investment type has its own set of requirements and procedures, with varying levels of risk and potential rewards. The suitability of either a regional center investment or a direct investment depends on the objectives of the investor. After committing to an EB-5 investment, an investor is unable to change from one investment type to the other, making it crucial for investors to thoroughly evaluate their options and make a well-informed decision prior to investing in a project.

Direct EB-5 Investments

With direct investments, EB-5 investors allocate their capital directly into a new commercial enterprise. This method is appealing to investors seeking greater involvement in the business’s decision-making and operational aspects. Direct investors are often expected to play an active role in the business.

Under the EB-5 Reform and Integrity Act of 2022 (RIA), a new commercial enterprise under a direct investment can be funded by only one investor, preventing the pooling of capital from multiple investors for a single project.

For direct investment ventures, the job creation requirement is strictly tied to full-time, W-2 employees of the enterprise, and investors are required to show evidence that their investment has led to the creation of 10 jobs, each lasting at least two years.

Regional Center Investments

Introduced in 1992 as a pilot program requiring regular reauthorization by the federal government, the regional center-sponsored investment model offers an alternative to direct EB-5 investments. In this model, investments are channeled into projects sponsored by regional centers. Foreign nationals can have less control over business operations compared to direct investments.

Pros and Cons of Direct and Regional Center Investments

Job Creation

One significant distinction between direct investments and regional center investments is that indirect jobs can be counted toward the job creation criteria with regional center investments.

This approach utilizes econometric analyses to calculate the broader economic effects of an investment. Within regional center projects, indirect and induced jobs can account for as much as 90% of the total jobs generated by the project.

 
This regulation simplifies the process for investors to demonstrate compliance with the job creation criteria of their EB-5 investment.

Pooled Funds

The privilege of pooling investments from multiple EB-5 investors is exclusive to regional center projects. This implies that developers wishing to combine funds to meet the financial requirements of a project must work with a regional center, which can accommodate multiple investors. This characteristic makes regional center investments appealing to individuals with limited resources or those interested in investing in projects that require more capital than a single investor can supply.

Moreover, many projects associated with regional centers are situated in Targeted Employment Areas (TEAs), allowing investors to commit a reduced investment of $800,000 instead of $1,050,000.

Ease of Application

Regional centers are entities designated by USCIS, assuring investors that their investments in regional center-managed projects are valid for the EB-5 visa program. Regional centers also typically have a group of EB-5 experts as part of their team, who can help EB5 investors through every step of the application process and beyond. This support ensures investors can navigate the EB-5 program requirements smoothly and prevent expensive errors.

While participants in regional center projects face less bureaucratic effort to demonstrate their investments’ compliance with the EB-5 program, they can also benefit from less responsibility regarding the day-to-day management of the business.

Financial and Immigration Risks

Given that regional centers already have USCIS approval, they generally represent more secure investment opportunities, potentially increasing investors’ chances of getting their visas approved and their funds repaid.

Choosing the Right Investment Path

For investors aiming for U.S. permanent residency, opting for a regional center-sponsored project might be the best choice, as these investments are generally considered safer. They usually require less hands-on management from investors, although both investment types necessitate some level of involvement. Regional center investments are also advantageous for those who prefer the flexibility to live away from the investment’s location. This flexibility is beneficial for investors with family members interested in working or studying in different parts of the United States, without being bound to a specific area.

On the other hand, direct investments cater to investors who prefer greater control over business operations and decision-making. This investment model can also potentially offer higher financial returns in the long run. However, direct investors must be aware of their obligation to create 10 direct full-time jobs and to invest the full investment capital alone, without the opportunity to co-invest with other foreign nationals.

Additional Guidance for EB-5 Investment Choices

The nature of each investor’s circumstances plays a significant role in which EB-5 investment option would be the best choice for them. This is why prospective investors should seek help from a reliable consulting firm before making these important decisions.

EB5AN has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. Our expert team has more than a decade of experience, and offers clients first-rate, low-risk EB-5 regional center projects with 100% USCIS project approval rate to date.

If you would like to learn more about your investment options, book a call with our team today and get support throughout every step of your EB-5 process.

The E-2 Treaty Investor Visa, commonly known as the E2 visa, is a non-immigrant visa for citizens of countries that have a commerce and navigation treaty with the United States. Individuals who invest significantly in a U.S. enterprise are entitled to live and work in the U.S., with the option for unlimited visa renewals.

While the E2 visa comes with its set of advantages, it also has certain limitations. It does not automatically grant permanent residency or a Green Card. E2 visa holders are expected to have the intention to leave the U.S. when their visa expires.

However, transitioning from an E-2 visa to a Green Card is possible. In this article, we will explore how transitioning from an E2 visa to a Green Card can allow foreign nationals to access benefits not available with the E2 visa.

Advantages of Transitioning from an E-2 Visa to a Green Card

U.S. permanent residence (Green Card) enables the holder to live and work freely across the United States, offering many rights similar to those of a U.S. citizen. After five years of holding permanent residency, it also paves the way for U.S. citizenship. Transitioning from an E2 visa to a Green Card brings numerous advantages, including:

• The possibility to sponsor relatives for Green Cards.
• Easier travel in and out of the U.S.
• Eligibility for social security benefits.
• Broader employment opportunities.

It’s important to note that E2 visa holders face employment limitations, being allowed to work only within their own investment businesses. With a Green Card, these limitations are lifted, offering greater freedom.

Green Card holders are also free from the requirement to intend to leave the U.S. and their status is not dependent on the success or existence of a particular business. So a Green Card offers a more stable and long-term solution for those looking to make the United States their permanent home.

Steps of Converting Your E-2 Visa into a Green Card

There are several ways to convert an E2 visa into a Green Card. These include increasing the investment amount to qualify for an EB-5 visa, securing sponsorship from a family member or employer, or applying for a National Interest Waiver.

Foreign nationals are advised to seek guidance from an immigration lawyer during this process to ensure a smooth transition to Green Card status.

Increasing Your Investment

A key benefit of the E2 visa is that there’s no set minimum for the investment required. However, it’s generally advised to invest at least $100,000 to ensure the investment is deemed substantial by the United States Citizenship and Immigration Services (USCIS). E2 visa holders can pave the way to permanent residence by increasing their investment, thereby meeting the criteria for an EB-5 Green Card.

The EB-5 program provides a straightforward path for foreign nationals to secure a U.S. Green Card. E2 visa holders looking to transition via the EB-5 route need to familiarize themselves with its specific investment demands.

To qualify under the EB-5 program, investors are required to generate at least 10 full-time jobs and invest a minimum of $800,000 in a new commercial enterprise. This means E-2 investors must increase their investment until it totals at least $800,000 to comply with EB-5 requirements.

Investing in a Regional Center Project

E2 visa holders have the flexibility to invest in an EB-5 regional center project instead of directly into a business, while still maintaining their E2 operations. Regional center projects are often organized as limited partnerships, where the investors take on roles as limited partners. These projects commonly pool funds from multiple EB-5 investors, simplifying the process of meeting the job creation criteria.

The requirement for these regional center investments includes the generation of at least 10 jobs for U.S. workers. Unlike direct investments, this total can include not only direct but also indirect and induced jobs, which are determined through economic models. This approach makes it much easier to meet the job creation requirement.

Sponsorship by an Employer or Family Member

E2 visa holders may also secure a path to a lawful permanent residency through employment if a U.S.-based employer extends a job offer to them. This requires the employer to demonstrate the absence of suitable U.S. workers to fill the role, and treaty investors would need to change their status before accepting a job offer.

In another scenario, E2 investors have the option of obtaining a family-based Green Card through sponsorship by an immediate family member. This includes spouses, parents, and children of either U.S. citizens or current Green Card holders.

Securing a National Interest Waiver

Investors with exceptional skills who seek lawful permanent residency may explore the option of the EB-2 National Interest Waiver. This waiver eliminates the need for employer sponsorship and labor certification by arguing that the investor’s exceptional talents will significantly benefit the U.S. economy. An approved National Interest Waiver allows investors to secure a Green Card independently.

To be eligible for a Green Card through the National Interest Waiver, applicants must:

• Show that their business venture is of significant merit and national importance;
• Have the necessary skills for the success of the business;
• Explain the advantages to the United States of waiving the usual EB-2 immigrant visa requirements, including the absence of need for family or employer sponsorship. The National Interest Waiver is specifically available to individuals with extraordinary abilities or advanced degrees in areas like science, arts, and business.

Timeline for Converting an E-2 Visa to a Green Card

Depending on the chosen pathway, converting an E-2 visa can take several years.

One of the most popular options, the EB5 visa route, entails a few different stages. Initially, applicants must file an I-526 petition, and upon approval, they are eligible to obtain a conditional Green Card that is valid for two years. The I-526 petition’s processing time can depend on several factors, including the type and location of the EB-5 investment, the complexity of the immigration case, and the applicant’s country of birth.

After the two-year conditional residency period, foreign nationals are required to submit Form I-829 to remove the conditions on their EB5 Green Card and obtain permanent residency status. This permanent EB-5 Green Card can be renewed every 10 years.

In the meantime, after five years of residency in the United States, EB-5 investors can apply for citizenship by naturalization. The two-year conditional residency period counts toward this, so the EB-5 visa offers a relatively fast track to U.S. citizenship.

The EB-5 Green Card application process demands detailed personal and financial documentation. This includes, but is not limited to, evidence of investment in a qualifying EB-5 project, documents tracing the source of the investment funds, tax records, scans of passports, certificates of birth and marriage, and many more.

How to Start the Transition Process

Opting for the EB-5 program might be the most straightforward and secure route to changing your E-2 status into permanent residency. Before starting this intricate process, it is important to get help from reliable industry leaders.

EB5AN has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. Our team has more than a decade of experience, and offers clients first-rate, low-risk EB-5 regional center projects with 100% USCIS project approval rate to date.

If you’re interested in exploring your U.S. investment visa options in more detail, book a call with us today and our expert team will be happy to guide you through every step of the process.

Intercreditor agreements take place among two or more lending parties, typically involving a senior and a junior lender, to establish certain safeguards for the involved entities. Without such agreements, there could be legal complications among the parties.

EB-5 projects have access to various loan types, and the choice of financing impacts the specifics of the intercreditor agreement, which usually benefits the senior lender. This is why it’s crucial for junior lenders and borrowers to closely review the terms and conditions.

In this article, we explore the different loan options, the framework of intercreditor agreements, and the advantages and disadvantages of securing one for an EB-5 investment.

Types of EB-5 Financing

The EB-5 financing structure incorporates a special purpose vehicle (SPV) set up to receive funds from EB-5 investors and channel these funds as loans to the EB-5 project. This financing arrangement carries a risk of financial loss for both parties, making it essential for both to have sufficient resources or alternatives in the event of project failure, and for the loan conditions to be explicitly detailed in the offering documents.

Senior, subordinate, junior, and mezzanine loans represent the typical financing options available to an EB-5 borrower.

Senior Loans

Senior loans are backed by collateral, like real estate, and have priority over subordinate loans. This entity is the principal lienholder and is entitled to payments on senior debt.

Subordinate Loans

Subordinate loans are positioned after senior loans in terms of rights to assets, encompassing both junior and mezzanine loans. It is crucial for investors to fully understand the conditions of a subordination agreement.

Junior

A junior loan, like a senior loan, is a subordinate loan that is secured by collateral.

Mezzanine

A mezzanine loan is secured by a company equity pledge or assets by the borrower.

Considerations When Selecting a Loan

EB-5 borrowers must scrutinize the offering documents, especially when the SPV is a regional center or a company with several affiliates involved. Key points to consider include:

• What’s the loan amount, and is there flexibility to increase it through an accordion option?
• What are the defined minimum and maximum loan amounts, and under what conditions can these change?
• When will interest start to accumulate, and when are payments due? Is the interest calculated on a simple or compound basis?
• What are the terms for the repayment of the loan?
• What fees are associated with the loan, are they justified, and to whom are they payable?
• Are there any loan terms that restrict fund distribution?
• What guarantees and assurances are provided in the agreement?
• What purpose do affirmative or negative covenants serve in the agreement?
• Is collateral securing the loan, what form does it take, and what is its value?
• Does the lender hold a primary or secondary position in the case of repayment?
• Is the project’s equity substantial enough to cover both senior and junior debts in a foreclosure scenario, emphasizing the importance of a robust capital structure for the EB-5 project?
• What are the consequences of a borrower’s default, including potential interest rate hikes or immediate loan repayment demands?
• Is there a guarantor for the loan, and are they financially capable of fulfilling their obligations if needed?
• How affiliated are the parties involved, and are they reliable?

The Basics of EB-5 Intercreditor Agreements

An EB-5 intercreditor agreement outlines specific conditions between a senior and junior lender, clarifying their mutual relationship and their connection with the EB-5 investor obtaining the loan. Sometimes, intercreditor agreements may also occur between two senior lenders, which can significantly affect EB 5 investors.

For the subordinate lienholder, it’s critical to act swiftly on their rights to mitigate the threat of substantial financial loss due to defaults or bankruptcy, as well as to avert potential immigration issues for the borrower. If the junior lender defaults, it could jeopardize the EB-5 investors’ eligibility for U.S. visas.

Advantages and Disadvantages

There are potential advantages and disadvantages of an intercreditor agreement for a subordinate lienholder to consider. Keep in mind that these may not all be applicable, as each intercreditor agreement is different. This is why it is essential to understand the complete range of terms.

Benefits of an Intercreditor Agreement

The junior lender might benefit from:

• Receiving notice of default.
• Having the chance to remedy a default and assume control of the project.
• The option to enforce a mezzanine pledge.
• Lowering loan expenses owing to the senior lender’s use of administrative infrastructure, which provides updates on project progress and loan disbursements without requiring additional resources.

Drawbacks of an Intercreditor Agreement

The subordinate lienholder could face the loss of:

• The ability to receive principal or interest payments.
• The power to sanction a plan of action during bankruptcy proceedings.
• The right to seize collateral through foreclosure.
• The privilege to seek remedies from guarantors shared with the senior lender.
• The capacity to amend the terms of the subordinate loan agreement.

The Importance of Intercreditor Agreements

The intercreditor agreement aims to protect the interests of all parties involved, ensuring that lenders can repay EB-5 investors in case the project runs into financial issues.

However, it’s common for intercreditor agreements to primarily benefit senior lenders, who often have priority over collateral and decisions in default situations. Therefore, entering into an intercreditor agreement might not always serve the best interest of a junior lender unless they, or the borrower, have significant negotiating power to secure favorable terms.

Such negotiating power for an EB-5 lender could come from having the financial capability to independently complete the EB-5 project without the senior lender’s involvement, or when their loan contribution is critical to the project’s success.

Borrowers who have a positive track record with their senior lender, or the flexibility to switch lenders easily, also hold valuable leverage that can lead to a more advantageous agreement.

Crucial Aspects of EB-5 Intercreditor Negotiation

Without enough bargaining power, it might be better to go without an intercreditor agreement unless required by the senior lender, as such agreements can potentially increase the risk for investors. While reviewing the offering memorandum, both the junior lender and borrower should assess various aspects to decide on their course of action.

The junior lender ideally needs:

• The capacity to foreclose on the subordinate collateral.
• The power to put a temporary halt on the senior lienholder’s foreclosure actions.
• The privilege to be paid back the owed amount.
• The option to intervene and complete the project if there is default.
• The opportunity to acquire the senior debt during a default scenario.
• Adequate financial resources to assume control of the project in the event of the borrower’s failure, or a partnership with a capable entity.
• Proven experience in finalizing projects of a similar nature, or access to necessary resources.

While these criteria may not always be fully satisfied in the offering memorandum, if many of them are, it will be more advantageous for both the borrower and the junior lender.

Navigating EB-5 Intercreditor Agreements

Intercreditor agreements play a vital role for EB-5 investors and lenders, as they outline the specific terms of the EB-5 loan and protect the rights of the junior lender. However, it’s important to note that not all intercreditor agreements provide equal protection, and some may even harm the rights of the junior lender. This is why EB5 investors should carefully review the offering documents and seek help from qualified industry professionals.

EB5AN has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. Our expert team has more than a decade of experience, and offers clients first-rate, low-risk EB-5 regional center projects with 100% USCIS project approval rate to date.

For detailed insights into how intercreditor agreements work with EB-5 investments, book a call with our EB-5 team today.

The E-2 treaty visa is designed for foreign nationals who wish to live and work in the United States by investing in a U.S. business. This visa allows entrepreneurs to make a meaningful economic impact through investment, granting them E-2 visa status in return.

While E-2 is not an immigrant visa, which means it does not provide investors with a direct pathway to a U.S. Green Card or citizenship, it can offer a viable non-immigrant alternative to individuals who would like to set up a business in the United States.

In this article, we will take a closer look at the E-2 visa for foreign investors, while providing detailed insight into the investment requirements.

E-2 Visa at a Glance

One of the key advantages of the E-2 visa is its lack of a fixed minimum investment requirement, setting it apart from other investment-based visas that demand high initial investment amounts. This flexibility makes the E-2 visa an accessible and appealing option for many. The U.S. Citizenship and Immigration Services (USCIS) requires the investment to be “substantial,” which is measured relative to the total value of the business.

To qualify as substantial, the investment must be able to:

• Acquire an existing business or start a new one;
• Demonstrate the investor’s serious financial commitment to the business;
• Ensure the investor’s ability to effectively manage and grow the business.

Although there is no specific minimum investment amount for the E-2 visa, immigration experts often advise not to invest less than $100,000. The rationale is that a larger investment can more convincingly show the investor’s commitment to the business, potentially simplifying the application process.

Investors are required to demonstrate that their E 2 investment is substantial and committed to a legitimate enterprise, putting them at financial risk if the business fails. To meet this requirement, investors can present a variety of evidence, including:

• Copies of money orders and checks;
• Relevant personal and business bank account statements;
• Detailed lists of goods and materials purchased with accompanying financial records for the investment;
• Lease agreements;
• Initial agreements such as term sheets, letters of intent, or memorandums of understanding;
• Bills of sale;
• Escrow agreement documents;
• Documentation of loans and mortgages;
• Tables showing how the business is capitalized;
• Analyses assessing the value of the business’s assets;
• Agreements for purchasing;
• Studies valuing company shares;
• Agreements for buying shares, along with records of meetings, stock ledgers, certificates, and proof of payment for shares.

To be eligible for the E2 treaty visa, an investor must hold citizenship in a country that has a treaty of commerce and navigation with the United States. The list of these E-2 treaty countries includes over 70 nations.

Once granted, the E-2 visa permits a stay of two years, which can be extended in two-year increments indefinitely, as long as the investor maintains the intention to leave the U.S. once the visa expires or is terminated.

There are no specific educational requirements for the E2 visa. However, since the treaty investor will have a significant role in managing and operating the business, they need to prove their ability to do so effectively. The investor’s skills and experience should be directly applicable to the business venture, ensuring they can execute their business strategy successfully.

Engagement in Management Activities

How much a treaty investor needs to be involved in the management of the business depends on how the investment is structured. However, the E-2 program requires treaty investors to be actively involved in business operations.

Every treaty investor must show they plan to play a hands-on role in the management and operation of the E 2 business soon after arriving in the United States. If they don’t, their investment might be seen as passive.

Filing an E-2 Visa Application

Investors Living in the U.S.

E 2 visa applicants located in the United States on a valid nonimmigrant status are required to file Form I-129 along with identification documents and proof of legal status to the USCIS. Additionally, Form I-539 is necessary for each of the investor’s dependents (namely, their spouse and any children under the age of 21) involved in the application.

Those applying from inside the United States can opt for premium processing for an additional fee, which shortens the processing time to roughly 15 days. Without premium processing, the standard timeline for processing an E-2 visa application spans several months, depending on each case.

Investors Applying From Abroad

E-2 visa applicants from outside the United States must apply through the U.S. consulate or embassy in their home country. The process and requirements for E-2 visa applications can significantly differ from one consulate to another, with some requiring applications to be mailed in, others accepting submissions via email, and more variations. Applicants are advised to consult the website of the relevant consulate to understand the specific instructions before beginning their application.

All applicants are required to complete Form DS-160, and most consulates also ask for Form DS-156E.

After the consulate reviews the submitted application and documents, applicants will be invited to schedule an interview. A successful interview leads to the issuance of an E-2 visa.

Application Fees for an E-2 Visa

As mentioned above, when applying from within the U.S., principal investors must file Form I-129, and their dependents need to submit Form I-539. As of March 2024, the filing fees for these forms are $460 for Form I-129 and $370 for Form I-539. With the USCIS price increase in filing fees, these will increase on April 1, 2024, to $1,015 and $420, respectively.

For those applying from outside the U.S., Form DS-160 must be completed by each applicant, with the filing fee typically around $200, although this can vary across different consulates.

While the submission of Form DS-539E is required by many consulates, it does not come with a filing fee. A nominal fee is also charged upon the issuance of the visa to the investor, which differs from consulate to consulate. It’s common for investors to retain an immigration lawyer while preparing these applications.

Throughout the E-2 visa application process, applicants may encounter various other expenses, including fees for legal services and business plan, biometrics, and business setup costs.

Key Info to Keep in Mind

• The choice of business venture to invest in is left to the investor, as long as it meets the E-2 criteria. While investors have the liberty to select from a broad range of businesses, the E2 enterprise must not be marginal. In other words, it should generate sufficient income to sustain the investor and their family, while also making a meaningful contribution to the U.S. economy.
• Even though the minimum investment requirement for the E-2 visa is relatively low, there’s still the risk of losing time and money if the venture doesn’t succeed.
• Seeking a specialized immigration attorney’s help can offer significant advantages to E-2 investors. The success of an E 2 visa application heavily relies on the performance of the business, which makes strategic planning very important.
• E-2 investors are expected to submit a detailed business plan with their application. This plan should outline the investment’s purpose, confirm its adequacy for making the business operational, and demonstrate its potential to achieve growth targets. The business plan must comply with specific E-2 guidelines. A well-constructed business plan increases the chances of application approval and minimizes the risk of receiving a request for evidence (RFE) or denial. Consulting firms can assist investors in developing a comprehensive business plan.
• Dependents of the investor, regardless of their nationality, typically receive the same duration of stay as the treaty investor, with the option to extend their stay as needed. Children of the investor are permitted to study in the U.S., and spouses are eligible to seek employment authorization, allowing them to work outside of the E-2 business, unlike the primary investor.
• The E-2 visa does not cap the number of times a treaty investor can renew their stay permit, offering the freedom to travel internationally without restrictions on the duration spent outside the U.S. However, E-2 visa holders should carefully monitor their visa status during travel to avoid complications that might occur if the visa expires while they are outside the United States.

How to Start the E-2 Visa Process

The E-2 visa is known for its flexible investment threshold and provides a cost-effective path to the United States, with many investors opting for an investment near the $100,000 mark.

With the help of experienced industry professionals, the E-2 visa can also serve as a step toward obtaining the EB-5 visa, which offers a direct pathway to permanent residency with a subsequent opportunity to apply for U.S. citizenship.

EB5AN has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. Our expert team has more than a decade of experience, and offers clients first-rate, low-risk EB-5 regional center projects with 100% USCIS project approval rate to date.

If you would like to learn more about the E-2 visa, please book a call with our team, who can assist you in successfully obtaining an investment visa in the United States.

Foreign nationals looking to live in the U.S. have several visa paths available, investment visas being one of them. Under U.S. investment visa categories, two popular options are the E-2 treaty investor visa and the EB-5 immigrant investor program.

This article will explore these two visa options, delving into their similarities, differences, and requirements.

Eligibility Criteria for an E-2 Visa

The main factor that determines E-2 visa eligibility is the applicant’s nationality. Treaty investors must be citizens of an E-2 treaty country. This includes any form of legally obtained citizenship, including naturalization.

Currently, the United States holds E-2 treaties with more than 70 countries.

Key Requirements

Candidates for the E2 visa are required to invest in a U.S. business and plan to leave the U.S. upon visa expiration. However, the E2 visa can be renewed, allowing treaty investors to remain in the U.S. well beyond the initial two-year term, despite the requirement to eventually leave.

Unlike other investment visas that specify a minimum investment amount, the E2 visa does not have a fixed minimum investment requirement. Instead, E-2 treaty investors must make a significant investment that is enough to buy or establish a business, demonstrating a serious financial commitment to managing and growing the business.

The business in question must be a legitimate, for-profit enterprise engaged in entrepreneurial activities.

A core purpose of the E-2 visa is to create jobs for American workers, which means that the business must be able to generate substantial income to support the investor and their family, as well as contribute positively to the American economy.

While no exact minimum investment amount is required, industry experts often suggest an investment of no less than $100,000 to ensure a viable application, as smaller investments may not be deemed significant enough to qualify.

A larger investment amount typically strengthens the investor’s case by showing their financial commitment to the business.

The investment must meet the “at risk” criteria for the E2 visa, meaning it must be fully committed to the business without guarantees of return.

This commitment is evidenced by funds already spent or in the process of being spent at the time of the E2 visa application.

Typically, an E-2 treaty investor should hold a minimum of 50% ownership in the business, hold an executive position, or have a role that provides control and operational oversight.

Pros and Cons

• The E2 visa grants an initial stay of two years, with the possibility of indefinite renewal in two-year intervals. There’s no cap on the number of renewals an E-2 visa holder can obtain, as long as the business continues to operate and meet the criteria of the E2 program.
• E-2 visa holders enjoy the liberty to travel in and out of the U.S. without any limitations, and there’s no restriction on the duration of travel. However, it is important to be aware of the visa’s validity, as complications may arise if the visa expires while the investor is outside the U.S.
• The E2 visa is known for relatively faster processing times, although the exact timeline can vary depending on the details of each case.
• Employment for E-2 visa holders is confined to the business in which they have invested.
• Prospective investors must note that the E-2 visa is a non-immigrant visa, which means it does not offer a direct pathway to a U.S. Green Card or citizenship.

E-2 Visa Eligibility for Family Members

The E2 visa also extends eligibility to the dependent family members of the investor, which includes their spouse and unmarried children under 21 years of age.

If these dependents receive E-2 approval, they are granted the same duration of stay as the primary treaty investor. The nationality of dependents does not have to match that of the main applicant.

Spouses are eligible to apply for a work permit, while children under 21 can pursue education in the U.S.

However, dependency under the E2 visa has its limitations; children will lose their dependent status upon reaching the age of 21, making them ineligible to remain on their parent’s visa as dependents.

Ideal Business Ventures for E-2 Investors

An E-2 treaty investor has the flexibility to invest in various business types, depending on the investor’s personal interests, as long as the business complies with E2 criteria and all relevant regulations. Popular choices among investors include multinational companies, franchise operations, restaurants, and consultancy firms.

How to File an E-2 Visa Application

For a successful E-2 treaty investor visa application, investors need to fulfill all eligibility criteria and carefully navigate the application process.

Applicants must file several documents for the E2 visa, including Form DS-160, the Online Nonimmigrant Visa Application, and Form DS-156E, the Nonimmigrant Treaty Trader/Investor Visa Application.

The necessary documents for an E2 visa application also include a current passport, evidence of business premises through a lease or purchase agreement, state business registration or a sales license, and a federal employer identification number. Financial statements, acquisition contracts, valuation of assets, and proof of payments are critical for demonstrating the establishment of the business.

Moreover, the source of investment capital must be documented, with items like loan documents and receipts from the sale of assets.

Where relevant, additional details on business operations should be provided, including but not limited to customer contracts, share certificates, escrow fund evidence, partnership agreements, billing documents, and financial records.

A critical component of the E2 visa application is a detailed business plan, further discussed below.

E-2 Visa Business Plan

A comprehensive business plan must be included in an E2 visa application. This plan should outline future projections and the deployment of investment towards the success of the business. Essential components of this plan include financial, operational, staffing, and marketing strategies, alongside the applicant’s qualifications and background.

The business plan must present a profit and loss forecast for the upcoming five years, demonstrating that the investment will fulfill growth expectations and generate employment throughout the visa’s validity.

The plan needs to be realistic and achievable. Investors seeking to extend their E2 visa must show evidence of realized business objectives, as detailed in the initial plan.

While there is no minimum amount of investment required, the invested capital must be significant relative to the total business cost. It falls upon the investor to justify that the investment is substantial when the business and its demands are considered.

To support their claim, a treaty investor might present various documents such as business bank statements, income proofs, loan agreements, and receipts of business expenditures, demonstrating the assets at risk.

The E2 visa supports various business models, requiring investors to outline a clear plan for how their business will operate. Since E2 visa holders will be managing and growing a business, having a well-defined management structure is crucial.

The business plan must also prove the investor’s capacity to employ U.S. workers, detailing the number and nature of the positions to be created.

Furthermore, a marketing strategy should be set up within the business plan to explain the economic benefits of the investor’s funding to the U.S. economy. The inclusion of U.S. contacts or signed letters of intent can help with this.

E-2 applicants are required to show that their expertise and experience directly align with the business venture. Those with exceptional skills may also explore the O-1 visa as an option, although it offers a significantly different immigration pathway.

Why Professional Advice is Crucial for E-2 Visa Applicants

Securing an E2 visa may require a lower investment amount compared to other investment options, but applicants face the potential loss of both time and resources if their E2 visa application is incomplete, incorrect, or fails to meet the necessary criteria.

This is why collaborating with an immigration lawyer can greatly improve the chances of meeting all E2 visa requirements. Experienced immigration attorneys are also well-positioned to connect the treaty investor with other experts within the industry as needed.

The Differences Between E-2 and EB-5 Visas

The EB-5 visa, like the E2 visa, is an investor visa, granting foreign nationals the opportunity to live and work in the U.S. by making a significant investment in a new commercial enterprise (NCE). Yet, there are significant differences between these two types of visas.

Unlike the E2 visa, the EB-5 visa specifies minimum investment thresholds. For investments in a targeted employment area (TEA), the minimum is set at $800,000, while investments outside these areas require at least $1,050,000.

The EB-5 visa offers a pathway to conditional permanent residency in the U.S. for a period of two years, granting the right to live and work anywhere within the country. This can lead to obtaining a permanent Green Card. While the E2 visa permits holders to temporarily live in the U.S., it restricts employment to the business involved in the investment.

A crucial distinction to note is that the E2 visa falls under the non-immigrant category and does not offer a direct route to permanent residency. Although it can be renewed indefinitely as long as the holder meets the visa requirements, it doesn’t promise a permanent stay or eventual citizenship.

EB-5 visa holders, on the other hand, can transition from conditional to permanent residency after two years, obtaining the freedom to live and work anywhere in the U.S., no matter where the NCE is located.

Moreover, after five years of residing in the U.S. through the EB-5 program, individuals become eligible to apply for U.S. citizenship. Their two years of conditional residency in the U.S. can count towards this residence requirement, which makes the U.S. naturalization process even shorter for EB-5 investors.

How to Select the Best Option

Due to the differences between EB-5 and E-2 visas, investors are advised to conduct thorough research to determine which option aligns best with their goals and preferences.

Seeking assistance from experienced industry professionals during the due diligence and application stages can be advantageous for prospective investors.

EB5AN has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. Our expert team has more than a decade of experience, and offers clients first-rate, low-risk EB-5 regional center projects with 100% USCIS project approval rate to date.

If you’re interested in learning more about the E-2 and EB-5 visa options, book a call with us today to discuss the specifics of your immigration plans.

Finding an experienced and knowledgeable immigration attorney is one of the most crucial decisions an investor can make to streamline the EB-5 process.

The Importance of Hiring a Qualified EB-5 Attorney

There are many decisions that individuals must make when applying for a United States Green Card through the EB-5 Immigrant Investor Program, but perhaps none is as important as choosing the right EB-5 attorney. A lawyer with experience and expertise in the EB-5 visa application process can help applicants better understand the several complex requirements of the EB-5 program. Failure to submit paperwork in a timely manner or neglecting certain details on one of the many necessary forms could lead to significant delays in the processing of an EB-5 application. As such, finding a competent, knowledgeable, and attentive EB-5 lawyer is essential for effectively navigating the process.

The Crucial Role of an EB-5 Lawyer in the Visa Application Process

Given the complexity of the EB-5 process, hiring an experienced immigration attorney is crucial. An experienced immigration attorney should have a comprehensive understanding of the intricacies of the EB-5 program, especially given the changes brought on by the enactment of the EB-5 Reform and Integrity Act (RIA) in 2022. From the initial step of filing a Form I-526E to the final step of filing a Form I-829, an EB-5 lawyer is crucial for guiding investors through the entire process of obtaining U.S. permanent residency.

A qualified EB-5 lawyer will effectively act on the behalf of investors every step of the way. This includes a wide variety of functions, including ensuring accurate completion of every form, coordinating necessary submissions to United States Citizenship and Immigration Services (USCIS) and other government agencies, helping to prepare the investor’s source of funds (SOF) documentation, keeping the investor updated on the status of the new commercial enterprise in which they invested, preparing investors for their embassy interview, and much more.

The entire EB-5 application process can take several years, and incomplete forms or missed deadlines can further delay the process, costing investors time and money. In worst-case scenarios, mistakes can even lead to outright rejection of an EB-5 investor’s application. A qualified EB-5 attorney will have expertise in immigration law – as well as knowledge of what makes for a sound EB-5 investment – that will help prospective immigrants make the most informed decisions throughout the entire process.

How to Ensure an EB-5 Attorney Has a Track Record of Successfully Filing I-526E and I-829 Petitions

It’s important that every EB-5 investor does their own due diligence throughout the process, and choosing an EB-5 lawyer is no exception. Attorneys with a proven track record of success are always the safest options. In order to identify an EB-5 lawyer who has successfully navigated the process many times before, prospective immigrants should ask a series of questions to make an informed decision on which attorney to hire.

Before making a hiring decision, every EB-5 investor should ask prospective immigration lawyers how many successful Form I-526Es and Form I-829s they have filed, as well as their approval rates on these petitions.

Form I-526 – or, far more likely, Form I-526E, for prospective immigrants who invest through the USCIS-approved regional center program – is the very first form in the EB-5 process. The form grants the investor and their eligible dependents conditional United States Green Cards, and is submitted once they have selected a project in which to invest. The I-526E petition asks for personal information from the investor, specific documentation about the project, proof that the required minimum investment has been made, and information about the source of their investment funds.

Three months before the conditional Green Card expires, EB-5 investors are required to submit an I-829 petition, which proves that they have successfully met all USCIS requirements, thereby allowing them to live in the United States permanently.

Forms I-526E and I-829 are, in a sense, the first and last steps in the EB-5 process, respectively. Every qualified EB-5 attorney will have filed both forms countless times, and will be able to provide their approval rates. The more times an immigration lawyer has navigated the process from beginning to end, and the higher rate of success they have attained, the more confidence a prospective EB-5 investor can have in the approval of their own application.

How to Find an EB-5 Lawyer with Experience Demonstrating Lawful Source of Funds

Every EB-5 investor needs to clearly lay out the source of funds (SOF) for their investment in their I-526E petition, whether in the form of bank statements, stock or real estate transfer documents, proof of inheritance or gifts, or various other forms of documentation. USCIS requires detailed evidence that an investor’s funds were legally sourced, which often requires that investors provide a lengthy history of transactions. Insufficient proof that every transaction in that chain was lawful can result in application delays or rejections.

Regardless of the source of the investor’s funds, and especially in instances of mixed sources of funds, an experienced EB-5 lawyer will have a clear strategy for compiling all of the necessary documentation. Failure to provide the level of detail required by USCIS is among the most common stumbling blocks in the entire process, so the most competent EB-5 lawyers will have a thorough plan for compiling the information needed.

How to Identify an EB-5 Attorney with the Right Experience for an Investor’s Unique Circumstances

Every EB-5 application is unique, so every investor should look for an EB-5 lawyer with experience and knowledge that fits their circumstances. The documentation required by USCIS may be in a different format than what is easily attainable by an applicant, depending on their home country. As a result, finding an EB-5 attorney with experience processing a significant number of applications from an individual’s home country is imperative.

In addition, every competent EB-5 attorney should be able to provide a list of prior clients, ideally from the applicant’s country, who can provide testimonials about their experience. The quantity and quality of these testimonials, as well as how similar they are to the applicant’s own circumstances, can go a long way in providing assurance that a particular EB-5 attorney has the experience to successfully guide an investor through the process.

Prospective EB-5 investors should always do their own due diligence before hiring an EB-5 attorney to help lead them through the process. For 10 years, EB5AN has worked with several excellent EB-5 attorneys, and is committed to helping investors identify the lawyer with the right experience for their unique circumstances. To request a list of EB-5 lawyers that we are proud to endorse, please contact us here, or reach us via phone, text, or WhatsApp at +1 (561) 386-5356.

Established in 1990, the EB-5 Immigrant Investor Program aims to stimulate economic development in the United States. By investing in a qualifying New Commercial Enterprise (NCE), EB-5 investors, along with their dependent family members, become eligible for an EB5 Green Card.

Participants in this program obtain lawful permanent residency in the U.S., with the opportunity to seek U.S. citizenship afterward.

However, interested individuals should first do some research into whether they qualify for a Green Card through investment. The EB-5 program eligibility depends on several factors, and understanding these factors can greatly benefit EB-5 investors throughout their application process.

In this article, we will explore the requirements to get a U.S. Green Card, specifically through the EB-5 Immigrant Investor Program.

EB-5 Green Card Eligibility

The two key criteria for EB5 eligibility are the minimum capital investment and participation in the New Commercial Enterprise (NCE) management. The necessary investment amount varies depending on the EB-5 project; an NCE located within a Targeted Employment Area (TEA) requires a lower investment amount than in areas outside of TEAs.

The source of the invested capital is not restricted, but it must be lawfully acquired, which is demonstrated through the EB-5 source of funds process. Additionally, the investor’s level of involvement in the NCE can differ based on the NCE’s organizational structure.

For all EB 5 requirements, sufficient evidence must be presented to the United States Citizenship and Immigration Services (USCIS), which operates under the Department of Homeland Security, to prove compliance with these conditions.

EB5 immigrant investors are not required to have prior business experience or training. There are also no education or nationality limitations.

EB-5 Investment and Job Creation Types

Prospective EB-5 investors have the option of selecting either direct or indirect (Regional Center) investment approaches. Regardless of this choice, all successful investments yield the same ultimate benefit: U.S. permanent residency. However, the choice of investment type can make a difference in the simplicity, ease, and feasibility of the EB-5 process. Investors need to fully grasp both alternatives before deciding.

EB-5 Job Creation

The primary difference between direct and Regional Center investments lies in job creation, so it’s important to understand this requirement before deciding on the investment type. Every EB-5 project must generate at least 10 jobs per investor. Depending on the investment route, these can be counted across three different employment types: direct, indirect, and induced jobs.

Direct Jobs

Direct jobs are created directly by the NCE, such as positions in construction or operations. Only full-time jobs can be counted towards this requirement. While part-time roles do not qualify, job-sharing arrangements may be acceptable.

Indirect and Induced Jobs

Indirect jobs stem from the investment’s economic influence on the local area, such as when the business’s purchases of materials and services create new jobs.

Induced jobs occur when employees spend their earnings locally, further stimulating the economy.

Direct EB-5 Investments

Only a minority of EB5 investors opt for direct investments, as this model only allows for direct jobs to be counted towards the job creation requirement. However, some investors who seek greater control over the day-to-day management of their EB-5 business favor this option.

EB-5 Regional Center Investments

The majority of EB-5 investors prefer the indirect investment route via a USCIS-designated EB-5 Regional Center, offering a more passive investment approach. This method allows for the inclusion of direct, indirect, and induced jobs in the job creation count, which makes it easier for investors to fulfill the EB-5 requirements.

How Much Does an EB-5 Green Card Cost?

Introduced in 1990, the EB-5 program initially required a capital investment of $1,000,000, with a reduced threshold of $500,000 for investments in Targeted Employment Areas (TEAs).

In 1992, the establishment of the EB-5 Regional Center Program offered an alternate pathway for investment. These investment minimums stayed the same until 2019, when the EB-5 Modernization Rule was enacted, raising the minimum investment to $1,800,000 for standard areas and $900,000 for TEAs.

In 2022, with the introduction of new legislation, the minimum investment amount for the EB-5 visa was reduced. The current minimum investment requirements are $1,050,000 for non-TEA projects and $800,000 for TEA projects, with public infrastructure projects also qualifying for the lower investment threshold.

TEAs are defined as areas in need of economic revitalization and job creation. Investing in a TEA costs less than in non-TEA areas, which helps regions in need of economic development attract more capital from foreign investors.

TEAs are categorized into rural TEAs and High Unemployment Areas. A rural TEA must have a population under 20,000, not be located next to a city with a population over 20,000, and lie outside a Metropolitan Statistical Area (MSA). High Unemployment Areas are characterized by unemployment rates of at least 150% above the national average.

How Long Should EB-5 Investors Keep Capital Invested?

The EB-5 timeline varies for each investor, but in some cases, the process can span several years. EB5 investors need to keep their investment committed to the business until project completion. Additionally, the investment must be “at risk,” meaning that the return of capital is not guaranteed.

Depending on whether the investor is already in the U.S. or not, they are eligible to apply for a two-year EB-5 Green Card following the approval of their I-526 or I-526E forms, or petition to adjust status at the same time as the I-526 filing depending on visa availability.

Investors are required to submit Form I-829 within the final 90 days of their two-year conditional residency. This form is used to demonstrate to USCIS that the EB-5 project has followed its business plan and fulfilled all requirements, especially in terms of job creation. Once approved, the investor receives a permanent Green Card, which can be renewed indefinitely.

How Many EB-5 Visas Are Available Each Year?

U.S. immigration processes are based on a quota system, limiting the number of visas available to foreign nationals annually. This system applies to the EB-5 Immigrant Investor Program as well, with the U.S. Department of State (DOS) determining the EB-5 visa allocation each fiscal year.

With the enactment of the EB-5 Reform and Integrity Act, the allocation rules were revised. Currently, 32% of the yearly EB-5 quota is set aside for TEA investments and infrastructure projects—20% for rural TEAs; 10% for high-unemployment TEAs; and 2% for infrastructure projects.

If any of these designated visas remain unclaimed by the fiscal year’s end, they carry over to the next year within the same categories.

Additionally, each country is limited to receiving no more than 7% of the total annual EB-5 visas. Countries with high demand often surpass the allocated number, leading to a backlog known as visa retrogression.

The new visa set-aside provision offers a significant advantage for EB-5 investors from backlogged countries, allowing them to bypass the waitlist and secure their EB-5 visas more quickly. As of March 2024, individuals born in Mainland China and India are facing backlogs in the unreserved categories, while set-aside categories are current for all EB-5 investors.

What Does the Visa Bulletin Mean?

During an EB-5 visa retrogression, the Department of State implements cut-off dates for applicants from the affected country to manage how they can proceed with their EB5 applications. These cut-off dates have two categories: final action dates and dates for filing.

Final action dates show the date when investors are eligible to receive an EB-5 Green Card. On the other hand, dates for filing indicate when investors can submit their applications to the National Visa Center for adjustment of status. The investor’s priority date is what determines how these dates affect them. Priority date is the day the USCIS receives an investor’s I-526 petition.

The Visa Bulletin, published monthly by the DOS, provides the cut-off dates for each country. If an investor’s priority date is earlier than the cut-off date listed on the latest Visa Bulletin, these limitations don’t apply to them and they can proceed with their EB5 immigration process. However, those with priority dates that come after the cut-off date must wait until a visa becomes available.

In the past, these backlogs meant long wait times for EB-5 investors from certain countries, like China and India. Today, with the new visa set-asides, foreign nationals can enjoy faster processing times regardless of their nationality.

By investing in one of the set-aside categories, investors can get their EB-5 Green Card faster than ever before.

How to Start the EB-5 Process

There are several decisions prospective EB-5 investors need to make before filing their I-526 petitions, like whether they want to invest directly or indirectly, which EB-5 project to invest in, how to structure their investment, etc. This is why it’s important for investors to work with the right EB-5 service providers and seek expert advice from immigration attorneys to avoid potential delays, denials, and loss of capital.

To discuss the case-specific details of how you can obtain a Green Card through investment, please schedule a call with our EB-5 team today.