For many EB-5 investors, the ultimate objective is not U.S. permanent resident status but rather U.S. citizenship. While permanent residents enjoy most of the same rights and freedoms as U.S. citizens, there are limitations: permanent residents are barred from taking up political office, and they must avoid spending too much time abroad, lest they risk their permanent resident status. Citizens, however, may run for office and spend any amount of time outside of the United States without jeopardizing their citizenship.
However, the first step to U.S. citizenship is gaining permanent resident status, which, for most foreign investors, is most easily obtained through an EB-5 investment. By making an EB5 investment in a qualifying EB-5 project, proving the creation of at least 10 full-time jobs for U.S. workers, and meeting all other EB-5 Immigrant Investor Program requirements, an investor can obtain U.S. permanent residency rights for themselves, their spouse, and their unmarried children younger than 21. Then, after five years of living in the United States under permanent resident status (including conditional permanent resident status), the investor and their family may apply for naturalization and become U.S. citizens.
Making an EB-5 Investment
Though the EB-5 program is largely seen as one of the quickest and simplest pathways to a U.S. green card, it nonetheless remains a complex program, and due diligence is imperative for any prospective EB-5 investor. Most EB5 investments are successful and garner their investors a green card, but without proper due diligence, an investor could be putting both their EB-5 investment capital and immigration eligibility at risk.
Other obstacle prospective investors should be mindful of is the long processing times they may encounter. Although there are indications that processing times may shorten significantly in 2021—thanks to the EB-5 Reform and Integrity Act and the U.S. Citizenship Act of 2021, two proposed yet as of March 2021 unpassed bills—throughout the 2010s, long wait times have plagued the program. The situation is particularly dire for investors from China and Vietnam, which have experienced heavy backlogs for several years.
There are no guarantees in the EB-5 program, but those considering making an EB5 investment should familiarize themselves with the best practices for a smooth EB-5 journey.
Work with a Reputable Regional Center
Affiliating with an EB-5 regional center is not mandatory, but it is recommended, and it’s indeed the path taken by most foreign nationals who make an EB-5 investment. Regional centers pool together EB-5 investment capital from a number of different investors, allowing them to funnel investment funds into larger projects. Those investing through a regional center need not involve themselves in the daily management of the new commercial enterprise (NCE), and the job creation requirement is easier for them because they can count indirect and induced jobs. Another benefit is, naturally, the expertise and experience of the regional center operators, who can help protect an investor’s interests and streamline their EB5 investment experience.
When seeking an EB-5 regional center to invest through, an investor should examine a prospective regional center’s track record of approved I-526 and I-829 petitions, the center’s relationship with the project developer, and its history with similar projects. Determining whether past investors have received repayments for their EB5 investment is also wise. Look through the backgrounds and credentials of both the regional center operators and the project developers, and inspect the business plan of the NCE. It’s also a good idea to check the job creation buffer, whether the project qualifies for targeted employment area (TEA) status, and the exit strategy of the EB-5 investment.
Applying to the EB-5 program strategically can also have an impact on the speed and smoothness of the process. One area that trips up a lot of investors is the requirement to prove that all their EB-5 investment capital was obtained legally, which, depending on the sources, can be extremely difficult and time-consuming. Investors would be wise to work with an experienced EB-5 immigration attorney to determine which fund sources are easiest to document—failure to do so increases an investor’s risk of receiving a request for evidence (RFE).
Another strategy involves backlogged countries, but the option is only available to a minority of investors. As of March 2021, the countries with EB-5 backlogs are China and Vietnam, but more countries, such as India, South Korea, Brazil, or Taiwan, could join in the future. If an investor hails from a backlogged country but their spouse does not, they are advised to use their spouse’s country of origin on their I-526 petition, which could dramatically accelerate their path toward a green card.
Applying for U.S. Citizenship
Following five years of permanent residency in the United States, starting with the two-year conditional permanent resident status an investor applies for after obtaining I-526 approval, EB-5 investors and their immediate family members may apply to become citizens of the United States. To be eligible, they must maintain their permanent resident status, which generally prohibits travel outside of the United States for more than six months of the year. Permanent residents must also pay all U.S. taxes they owe and abide by U.S. laws to be eligible to apply for citizenship.
To file for U.S. citizenship, a green card holder must file Form N-400, alongside all supporting documentation, and pay the associated fees. Online applications are possible, though an in-person biometrics appointment may be required. The next step is an interview, a citizenship test (which tests an applicant’s knowledge of U.S. history and politics), and an Oath of Allegiance ceremony. The processing times for naturalization applications vary by location.