The EB-5 visa program is open to foreign investors and their families all over the world with the means to invest in EB-5 projects, as long as they meet certain requirements. Those who are successful in their EB-5 investments receive U.S. green cards for themselves, their spouse, and their unmarried children under the age of 21.
EB-5 investors must fulfill several requirements to receive U.S. permanent resident status:
- Investors are required to invest the stipulated required investment amount ($900,000 or $1.8 million, depending on targeted unemployment area, or TEA, designation) into an EB-5 project in the United States.
- Investors’ EB-5 capital must create (or, alternatively, preserve) 10 full-time jobs for U.S. citizens or residents that last at least two years.
- Investors’ EB-5 funds must remain at risk for the entire duration of the EB-5 process.
- Investors must document the sources of their EB-5 funds (both the $900,000 or $1.8 million investment amount and the additional $50,000–$80,000 in administrative fees) to prove that they were obtained legally.
- Investors must take on a concrete role in the new commercial enterprise (NCE). EB-5 investors investing directly must be heavily involved in the management of the project, while those investing through regional centers can simply assume a role as a policymaker.
How Do EB-5 Investors Make Their Investments?
The first step is to find a suitable EB-5 project with low financial and immigration risk. EB-5 investors should take their time to carefully assess a project’s documents and conduct due diligence to evaluate a project’s risk levels. Upon selecting an appropriate EB-5 project, investors should work with their immigration attorney to review the applicable laws and regulations before moving the required funds into the account designated in the project documents. In many cases, this will be an escrow account.
How Can EB-5 Investors Qualify for the Lower Investment Amount?
Investors working with EB-5 projects that meet the requirements for TEA designation are eligible to invest only $900,000 as opposed to the regular amount of $1.8 million. There are two types of TEA projects: projects in a high-unemployment urban area and projects in a rural area, which is defined as having a population of less than 20,000.
What Qualifies as an EB-5 Project?
An EB-5 project must be an NCE, which is defined as a lawful business that conducts for-profit activity. Many different types of businesses qualify, including corporations, limited partnerships, sole proprietorships, business trusts, and joint ventures. Furthermore, the NCE must have been established after November 29, 1990, when the EB-5 program was enacted.
What Does the Job Creation Requirement Entail?
One of the key requirements of the EB-5 program is the need for each investor’s capital to create at least 10 new full-time jobs in the United States. This requirement differs depending on the investment path the investor chooses.
Investors who invest directly in an EB-5 project must fund the creation of at least 10 full-time direct jobs. Direct jobs are defined as construction jobs or jobs on the NCE’s payroll.
Investors who invest in an EB-5 project via a regional center must fund the creation of at least 10 full-time direct, indirect, or induced jobs. Indirect jobs are jobs at external businesses that produce supplies or provide services to the NCE. Induced jobs are jobs created in the local community through the money spent by the workers of the NCE. The job creation must be estimated by a professional third-party economist using accepted economic or statistical calculation approaches.