All around the world, foreign nationals have their sights set on immigrating to the United States. There are indeed many immigration programs in the United States that allow talented foreign nationals to set up house in the land of the free, whether permanently or just for a temporary period. But not all U.S. immigration programs are made equal. Some offer clear benefits over others—and it just so happens that the EB-5 Immigrant Investor Program presents considerable advantages compared to many other U.S. employment-based immigration programs.
What Is the EB-5 Program?
The first thing one must understand about the EB-5 program is that it is not a conventional immigration program. The basic premise of the EB-5 program is that a foreign national makes an EB-5 investment in a qualifying project and, contingent on the fulfillment of program requirements, earns a U.S. green card, allowing them to live in the United States permanently. To avoid fraud and ensure the EB5 investment capital is used to the benefit of the U.S. economy, Congress has introduced a number of requirements for investors to satisfy.
One requirement involves the EB-5 investment amount. To be eligible for the EB-5 program, a foreign national must commit a minimum of $1.8 million to their chosen new commercial enterprise (NCE)—but this amount is halved to $900,000 if the NCE is located in a targeted employment area (TEA). Most EB-5 regional centers work exclusively or almost exclusively with TEA projects, so finding a suitable TEA project is relatively simple.
Further requirements include proving one’s EB5 investment capital is derived from lawful origins, which can be challenging and time-consuming, depending on the sources used. The best practice for proving the lawful sources of EB-5 investment funds is to hire an experienced EB-5 attorney. An attorney can also help a prospective investor select the best EB-5 project for their needs and assist them with conducting the necessary due diligence to maximize the chances of investing in an NCE that will meet the job creation requirements. Indeed, one of the most important requirements to United States Citizenship and Immigration Services (USCIS) is the creation of at least 10 new full-time jobs for U.S. workers, meaning EB-5 investments are a boon to the everyday American public.
The EB-5 program also offers a number of benefits that other U.S. immigration programs may not. Three are outlined below.
EB-5 Investors Can Come from Anywhere
Some employment-based U.S. programs restrict applicants by nationality. This is the case with, for example, the E-2 program, which issues two-year visas for substantial investments in U.S. companies by foreign nationals from treaty companies. Conversely, the EB-5 program offers any foreign national the opportunity to make an EB5 investment and gain permanent residency rights. It should be noted that certain nationalities are indeed disadvantaged, as backlogs for certain countries have resulted in longer waits for EB-5 investors from those countries. However, anyone is free to make an EB-5 investment.
An Investor’s Family Is Also Eligible for Green Cards
One of the most important benefits of the EB-5 program is that an investor’s immediate family members—defined as their spouse and unmarried children younger than 21—are also eligible for EB-5 visas. While some other U.S. immigration programs do allow minor dependent children to enter the United States with their parents, they must apply for permanent resident status on their own when they turn 18. EB-5 investor children gain permanent resident status simply as a result of their parent’s EB5 investment.
The advantages of permanent resident status for minors in the United States are many. EB-5 investors can send their children to public schools for free, immersing them in English and U.S. culture. When the children become college-aged, they will have an easier time gaining admission to U.S. universities, and they may be eligible for in-state tuition savings, depending on the school they are applying to. They will also be able to work freely during their studies, giving them a pronounced edge over F-1 visa students.
EB-5 Investors Can Earn Passive Income
The EB-5 Immigrant Investor Program is the only U.S. immigration program that offers foreign nationals immigrant status while earning them passive income. Most employment-based immigration programs offer status in the United States in exchange for an employed position at a U.S. company, but only the EB-5 program offers the same (or better) immigration benefits for a passive investment.
Not all EB5 investments are passive—if an investor elects to invest directly in an EB-5 project, they will be required to engage in the day-to-day management of the NCE. However, most program participants instead make their EB-5 investment through an EB-5 regional center, which allows them to sign on as a limited partner. Under such an arrangement, the investor needs only vote on important matters and are not even required to live near their project.
How much an investor can earn on their EB5 investment capital depends on the project, of course. However, an investor concerned about the return on investment should comb through the NCE documentation carefully and discern the interest rate. Traditionally, EB-5 investors have earned limited returns on their investments due to low interest rates, but the 80% increase in the minimum investment amount, as directed by the Modernization Rule enacted in November 2019, could result in higher investment amounts until EB-5 demand returns to pre-enactment levels. Thus, acting soon could allow an investor to earn higher-than-normal returns on their passive EB-5 investment.