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.