Hi everyone. This is Sam Silverman, managing partner of EB5AN. Thank you for taking some time to join us on today’s webinar. Today I’m joined by my partner, Michael Schoenfeld. Today we’re going to be covering eight green card benefits for EB-5 investors. Obviously, when EB-5 investors are considering making an investment, there’s a number of different reasons why that investment is attractive to them. And today, we’re going to try to cover some of the most important ones that tend to come up, and, you know, they’ll probably be some that you weren’t aware of. And so, hopefully, this will be helpful. Before we jump in, a lot of investors at this stage of the process are considering what project they’re looking at investing in. It’s important to confirm that a project is located in a targeted employment area, TEA area, and we’ve developed and launched a new map that will automatically tell you instantly if a project does, in fact, fall in one of these TEA areas, which means you only have to invest $900,000 instead of $1.8 million. So, take a look at that, if you’re considering a specific project with an address. Also, another free resource, also updated last month, in 2020, is our EB-5 guidebook. The information in this webinar and a lot of other information, FAQs, are also in this book—it’s completely free. You can download it at eb5guidebook.com or get a hard copy on Amazon as well.
So, as you probably are aware, the EB-5 Immigrant Investor Program offers foreign nationals permanent residency in the US, effectively known as a green card, in exchange for a qualifying investment of either $900,000 in a TEA, or targeted employment area, or in a non-TEA area at $1.8 million.
So, as, kind of, an overview before we dive into the specific different benefits, what are some of the main reasons why investors find a green card very attractive? First, unrestricted employment options, better admission rate for college and undergrad and grad [school], lower college tuition, opportunity to travel freely, additional support during retirement, and other benefits as well that you probably wouldn’t normally think of.
So, first, we’re going to chat about unrestricted employment options. So, as a green card holder, compared to a non-green card holder… so let’s talk about non green card holders first, since that’s how all these investors would start at it. So, if you’re in the US, you’re limited to working at companies where you can get a work authorization, right? So, that typically means only a small subset of the total companies that you could potentially work for because not many companies are willing to go through the visa process, get approved, and then, you know, incur the additional expense and flexibility on timing, right? So, you’re typically forced to limit your job search to larger, layered corporate organizations like Microsoft or Google—big companies. Typically, very few small entrepreneurial or startup companies are willing or able to go through the work authorization process.
It’s temporary. So, you’re always looking over your shoulder, looking to consistently monitor changes in immigration rules and regulations and different security restrictions as well. As a green card holder, you can work with pretty much any type of company—startups, smaller companies, larger companies. You can terminate employment at will, leave to a new company as often or regularly as you like—you don’t have to worry about immigration work authorization or visa concerns. You can work anywhere. You can work in Alaska, Puerto Rico, Florida, New York, California, Texas, wherever you want, when you want. You could have multiple businesses, you could start your own business, and you’re going to be eligible for retirement-related employment benefits as well. The main thing is, you can change jobs, seek different employers without fear of losing sponsorship. And you just have a lot more flexibility in terms of working in the United States.
And this is probably the largest benefit that we see. What many EB-5 investors are looking for is not being beholden to the H-1B visa and not having, just, restricted employment opportunities within the US, because it’s getting more and more challenging to get that employment sponsorship.
So, one other important driver of demand is college admissions. So, you know, as you probably know, it’s much easier to get admitted to a U.S. college or university if you’re applying as a domestic applicant. Colleges break up the number of slots they have available between international and domestic applicants, and there’s just a lot more spots available for domestic applicants. And so, as a result, the admission rate is higher just simply by being a non-international applicant. So, that right there is very important—not something that a lot of people realize, and, you know, it doesn’t affect all potential investors. Some investors are moving for retirement, and their kids are already working, and they’re not looking to go back to school. But a lot of younger families, education is really important, especially for the kids, graduate and undergraduate.
So, that’s a really important advantage to being a U.S. resident. Along the same vein is the tuition cost. So, when you compare the same idea of out-of-state or international students versus in-state students, you get a similar advantage, this time financially, in terms of cost savings, right? So, tuition $167,000 versus $54,000, very significantly different. If you’re an in-state resident, right, versus an out-of-state or international student, it’s going to be significantly [lower], right? So, you know, when you’re looking, kind of, at the entire EB-5 investment, what’s the total cost, what’s the benefit, how much, how long—this is an important line item to factor into that overall analysis if you have children who are going to be potentially going to undergraduate or graduate programs as a result of the, kind of, move to the US from the foreign country. Another really important reason is travel flexibility, right?
So, on a lot of the work authorizations and other visa categories, there’s always, you know, potential issues leaving the country, coming back in, you know—is the I-9 up to date, and, you know, are you going to get a border officer who’s going to give you a hard time, or are they going to, you know, just kind of wave you through and not ask you a lot more detailed questions? You basically avoid all of that when you have the green card, because you’re a permanent resident. And so, it’s just a lot lower stress, and it allows you to travel anywhere in the US you want, obviously, and then easier in and out of the US internationally. And then, furthermore, if you decide that you want to pursue citizenship or naturalization, within five years after holding the green card, then you get the US passport, which opens you up, which gives you visa-free travel to, you know, hundreds of countries around the world.
Another item that isn’t so commonly discussed or known is some of the retirement benefits. So, there’s pension benefits if you’re a retired green card holder, and there’s also health care benefits, including Medicare and other social welfare programs for older green card holders. Additionally, in terms of health care benefits, you’re also going to be getting access to state-of-the-art health care, right? The U.S. health system has some of the most advanced health care technology. And so, you know, as a resident, you’re going to have easier access to a lot of those technologies, you know, for retirement, but also, you know, for the treatment or care of a serious illness, et cetera.
Yep. So, there’s also a couple of other kind of operational items that are worth noting. First, you know, as an EB-5 investor, this green card benefit is going to be applicable to yourself, your spouse, and any unmarried children under 21 at the time of the filing. So, it’s kind of a whole family deal. Second, when you’re in the US, it’s much easier to obtain a mortgage with a green card, and in additionally to that, it’s just much easier to get financing, kind of in general—that doesn’t only apply to purchasing a home, but also for leasing a car or for taking a loan to start a business, or for getting a credit card, or setting up bank accounts and things. It’s just much easier to exist and do financial transactions in the United States if you have a green card.
It’s just significantly easier because every financial option is pretty much available to you—the same that would be available to a U.S. citizen. But if you don’t have a green card, then you’re an alien resident. And so, the number of companies that provide financial services to alien residents is very, very small compared to the total number of financial companies operating and serving green card holders and citizens. And so, that typically means, you know, much harder to get a loan or get financial services, and it typically means if you can get them, you’re going to pay a premium because you’re in the minority seeking that service, and there’s few competitors. Additionally, it’s easier to get health insurance and life insurance, and it’s just going to be easier to, you know, exist, and, you know, meet your health care needs with a green card, with more vendors being available, competing for your business.
There’s lots of these soft benefits where you are treated as a U.S. person at that point. And it makes many facets of daily life a lot easier, including the financing, the health care, and all of those things. It all becomes easier with a green card.
Yep. And kind of as a sidebar to that, Mike and I both attended college, university in the United States, and we were both recruited for professional jobs following graduation. We saw a lot of our friends who had, you know, come from international backgrounds, and the number of companies available that were able to recruit and go through the visa process for H-1B was just… there was just significantly fewer options available for international students. And so, that’s unfortunately just how a lot of the U.S. companies operate. But that also kind of falls under the soft, you know, soft benefits and work authorization benefits of obtaining the green card as well.
We’re now going to open it up to a few questions that we got. So, one of the questions is, what’s the timing around obtaining citizenship, and is it required? So, to answer that, citizenship is optional. You don’t have to become a United States citizen if you don’t want to. If you do want to, you can pursue that after you’ve held the green card for five years, right? So, once you have the green card in your hand, fast forward five years, and then, if you wanted to become a citizen, actually get a U.S. passport, then you’d be able to pursue that path if you wanted. The primary differences for that, citizenship versus the green card, are going to be the right to vote, the option to serve in the U.S. military, and then the passport are to be the major differentiators between green card versus citizen.
Yup. So, another common question we got is about the timing of the filing of the I-526 petition, and then the age of any children at the time of filing and what the treatment is for that in terms of, you know, when that application gets processed and approved. And the kind of high-level idea is that once the application is filed, then at the time of filing, that children’s age is frozen. Let’s say that they were 17 when they applied. And then, you know, a few years later, they got approved. They’re frozen during the review process, or the I-526 petition. When they become unfrozen, and where there can sometimes be a problem, is when the I-526 does get approved, and then there’s a gap between approval time and then, when they actually get the visa. Typically, if the visa category for that country is current, then that’s usually only three to six months.
And it’s pretty quick, and it’s usually not a problem. But if the investor’s from China, and there’s currently a seven-, eight-year or however long waiting period, then that investor[’s child] could age out beyond the 21-year age cutoff, because now they’re having to wait another seven or eight years after their I-526 is approved because the visa category for China’s not current, right? So, basically, as long as you’re not from China, Vietnam, or another country in the future that does become with a visa backlog, you know, then it’s not going to be a problem.
If we look back at the hundreds of investors who have filed in our projects, [the processing time is] typically one or two years. The posted processing times tend to be longer. I believe it’s around two to three years now in the USCIS website, although they’re constantly adjusting that, mainly because they want to limit the number of responses that have to be given to people if you’re outside of the processing time. So, what they’ll do is they’ll just expand it, even though it’s really taking less time, to avoid a lot of questions coming in. But historically, I would say a good estimate is about two years, to be safe. You know, if you have a really complicated source of funds with many, many different sources and it’s really complicated, it might take a little bit longer for them to review it. But typically, you know, the most important part of the application is the project.
When the government’s reviewing these applications, they’re reviewing both the project component and the personal component. So, on the project side, it’s, where’s the project, how much money is it? How many jobs does it create? Business plan, all the details on the project. But then they’re also reviewing the person. So, you know, John Patel from, you know, India, age 35, wife, two kids, where’s he from? Where did he work? And where is his $900,000 from, right? So the government’s going to approve both of those at the same time. And only when both of those are approved together is the I-526 going to be approved. So, that’s kind of mechanically how it works. So, we ran a little bit over today, but we’ll leave it there. Any other questions, please reach out to us. We have a lot of videos on our YouTube channel as well. This webinar, if you want the slides for this webinar, send us an email at email@example.com, and we’re happy to send them over. And if you want to watch the video, again, you should get a link to it automatically, or you can check our YouTube channel and it will be posted there early next week. So, thank you again for joining, and we hope that was helpful for you.