The EB-5 Immigrant Investor Program, an employment-based U.S. immigration program established in 1990, has been offering foreign investors a valuable opportunity to obtain permanent resident status in the United States for decades. It was designed to be mutually beneficial to foreign investors and the U.S. government—in exchange for a hefty EB-5 investment in a new commercial enterprise (NCE) that results in job creation and economic stimulation, a foreign national and their immediate family members are granted permanent resident status in the United States. Given the numerous benefits of U.S. permanent residency, including easier access to world-renowned educational institutes, state-of-the-art health-care facilities, and unparalleled freedom, foreign investors from around the world have flocked to the program.
Minimum Investment Amount
The EB-5 program stipulates a minimum EB5 investment amount that investors must satisfy to be eligible for a U.S. green card. For nearly 30 years following the program’s creation, the minimum investment amount was maintained at a clean $1 million, with targeted employment area (TEA) projects qualifying for a lower minimum investment amount of $500,000. The EB-5 program then suffered a severe blow in November 2019, when the Modernization Rule came into effect and increased the minimum investment amounts to $1.8 million for non-TEA projects and $900,000 for TEA projects.
A TEA project is an EB-5 project located in a high-unemployment or rural area. By incentivizing EB-5 investment in more deprived areas through a lower required investment amount, the U.S. government hopes to foster the economy in areas that stand to benefit more from the infusion of foreign capital. A high-unemployment TEA is defined as an urban area with an unemployment rate at least 150% that of the national average, while a rural TEA is classified as an area with fewer than 20,000 inhabitants.
Key EB-5 Investment Requirements
The EB-5 program is open to foreign investors from any country, and they are also welcome to apply for U.S. green cards for their spouse and unmarried children under the age of 21. To successfully complete their EB5 investment and obtain permanent resident status in the United States, however, investors must fulfill a number of requirements:
- The investor must prove that they have injected the relevant minimum investment amount into the EB-5 project—$1.8 million for a non-TEA project or $900,000 for a TEA project.
- The investor must provide documentation that shows the legal sources of their EB-5 investment capital.
- The investor must maintain their EB5 investment in the NCE for the entire two years of their conditional permanent residency period, keeping it at risk the entire time.
- The investor must demonstrate that their EB-5 investment has created at least 10 new, full-time jobs for U.S. workers lasting at least two years.
Investing through an EB-5 Regional Center
Prospective EB-5 investors must make a choice between directly investing in their chosen EB-5 project and investing through a qualifying EB-5 regional center. While both paths offer certain benefits, the vast majority of investors prefer investing through a regional center.
Investors with extensive managerial experience who wish to be intensively involved in the day-to-day operations of the NCE tend to be attracted to the direct investment route. This type of EB-5 investment allows them to exercise more control over their capital, potentially resulting in a larger return on investment.
Conversely, investors with less managerial experience or who simply do not want to be heavily involved in the management of the NCE are generally more drawn to the EB-5 regional center route. With a regional center EB5 investment, an investor can usually satisfy the requirement of involvement with the NCE simply by signing on as a limited partner, which gives them the freedom to settle somewhere far away from their project—investing in a project in Fort Lauderdale, Florida, but settling in Seattle, Washington, is entirely possible.
Another key advantage of regional center investment is that it offers relaxed job creation requirements. In direct investments, United States Citizenship and Immigration Services (USCIS) accepts only jobs listed directly on the NCE’s payroll. In contrast, investors working with an EB-5 regional center can count indirect and induced jobs toward the requirement, making it significantly easier to demonstrate the creation of at least 10 full-time jobs.
Ultimately, both paths lead to permanent resident status if the EB-5 investment is successful. Each investor must weigh the pros and cons and determine which option works better for them and their goals.