The EB-5 Immigrant Investor Program is subject to constant change as United States Citizenship and Immigration Services (USCIS) modifies its regulations and processing standards. In recent months, the program has undergone several new changes, with additional changes to come in the near future. Here are the answers to a few of the top questions about the changes to the EB-5 program.
Will the EB-5 program continue?
Foreign nationals can directly invest in EB-5 projects indefinitely. However, more EB-5 investors choose to take the regional center route, as it requires less managerial input from the investor and relaxes restrictions around the EB-5 job creation requirement. The EB5 Regional Center Program is extended periodically, with the most recent extension valid until September 30, 2020, and updates posted on the USCIS website.
What is the minimum required investment for an EB-5 project?
For close to 30 years, the EB-5 minimum investment amount remained the same, but in November 2019, the new EB-5 Modernization Rule went into effect, increasing the minimum investment amounts significantly. Now, for EB-5 projects that are in a targeted unemployment area (TEA), the minimum required investment amount is $900,000. For EB-5 projects without TEA designation, the minimum investment amount is $1.8 million. These amounts are set to increase in line with inflation every five years, with the first increase expected in 2024.
What options do investors have for investing in EB-5 projects?
There are two pathways to EB-5 investment: direct investment and regional center investment. Both pathways are part of the same program and, upon successful completion, result in the same lawful permanent resident status for investors and their spouses and children.
The direct investment program is better suited to EB-5 investors who wish to be heavily involved in the management of the project. This is a good option for EB-5 investors who would like to run their own business and have more control over their investment. It offers the potential of greater financial returns, if the EB-5 investor is a skilled project manager.
The regional center program is better suited to EB-5 investors who prefer to have limited managerial involvement in the project and desire the added financial and immigration security regional center investment offers. This is a better option for EB-5 investors whose main objective is obtaining a green card, not earning high returns on investment. Regional center EB-5 projects can also count indirect and induced jobs toward the EB-5 job creation requirements, which makes it easier for regional center EB-5 investors to successfully complete their investment.
A commonly held belief is that only regional center EB-5 projects qualify for the lower $900,000 minimum investment amount, but the truth is that both types are eligible as long as the project is located in a TEA. The myth might have come about due to regional centers primarily choosing to work with EB-5 projects located in TEAs.
How long does it take to complete the EB-5 process?
There is no one answer to this question because it depends heavily on each investor’s individual situation. As of March 2020, USCIS takes approximately three to four years to process I-526 petitions.
Factors that may impact the length of an EB-5 investor’s EB-5 journey include the following:
- Citizenship from a backlogged country (as of March 2020, Mainland China, India, and Vietnam)
- The complexity of the investor’s I-526 petition, including the difficulty of tracing the source of the investor’s EB-5 capital
- The previous track record of the EB-5 project
How are I-526 petitions processed?
The traditional processing method for I-526 petitions has been a first-in-first-out (FIFO) approach. At the time of writing, USCIS is still using the FIFO approach in its I-526 processing.
However, effective March 31, 2020, USCIS will switch to a visa-availability I-526 processing approach. Under the new regulations, USCIS will prioritize I-526 petitions from investors whose countries have visas immediately available. This will benefit applicants from underrepresented EB-5 countries by potentially speeding up their pathway to a U.S. green card, but it will hurt Chinese, Indian, and Vietnamese investors by potentially elongating the time it takes them to complete the EB-5 process.
Who is the EB-5 program for?
The EB5 program is for foreign national investors who wish to obtain a green card to live permanently in the United States. Qualifying investors may add their spouse and unmarried children younger than 21 to their application to obtain green cards for the whole family. An EB-5 green card offers grantees numerous benefits, including the freedom to work, live, study, travel, and do business anywhere in the United States as well as facilitated access to U.S. universities.
Who qualifies to be an EB-5 investor?
Foreign nationals with the appropriate capital ($900,000 for a project in a TEA or $1.8 million for a project outside a TEA) who can prove the lawful source of their funds qualify to participate in the EB-5 program. Foreign nationals can invest from abroad or while already living in the United States on a different visa, but those already residing in the United States must be accredited investors to qualify.
Can a loan be used as EB-5 capital?
EB-5 funds may take any number of forms. In addition to income, investments, and the sale of assets, EB-5 capital may also come from inheritance, loans, and gifts. This is a non-exhaustive list.
Can investors work or study as conditional permanent residents during the EB-5 process?
Conditional permanent resident status offers grantees the right to live, work, and study anywhere in the United States. EB-5 regional center investors are not required to live near their EB-5 project, so it is possible to invest in an EB-5 project in Florida and reside in Hawaii. Since regional center investors do not need to be heavily involved in the management of the EB-5 project, they have plenty of time to work, study, or live as they wish in the United States.
What is the first step to an EB-5 investment?
Foreign nationals interested in participating in the EB-5 program should first consult an EB-5 immigration attorney to ensure that the program aligns with their needs and goals. If you are interested in pursuing an EB-5 visa and would like more information about the program and its processes, don’t hesitate to contact the EB5AN team.