The possibility of living and working in the world’s strongest economy—even today. The opportunity to attend world-renowned higher education institutes. Easy access to the United States’ state-of-the-art health-care facilities. These are only some of the reasons people from around the globe continue to flock to the United States each year. Besides these real and tangible benefits to residing in the U.S., Hollywood, the world leader in media exports, has certainly done its part in crafting a rose-colored lens to the dream of the American life. The result? Millions of awe-struck visitors lining up along the country’s borders, waiting on their chance to get in.
While some foreign nationals are content with short-term visits like vacationing or spending a semester here for school, many are seeking a more permanent move. Marrying a U.S. citizen or another permanent resident is one option, but not always one that makes sense. The only real permanent immigration path left to most people is through an employment-based program, which isn’t always easy. Sometimes the political climate makes the process more difficult. Other times there are long-standing systemic problems like the H-1B visa’s shift to a lottery system to address excessive demand.
For these reasons, foreign nationals seeking permanent residency in the U.S. who have the means to participate choose the EB-5 Immigrant Investor Program. A single passive EB5 investment of $1.8 million (or $900,000 when invested in a project in a targeted employment area, or TEA) can help an investor and their eligible family members gain U.S. permanent resident status quickly and more easily than many other residency programs in the country. As such, the EB-5 program has successfully paved the way to a new life in the United States for thousands of families each year over the last three-plus decades.
So how does one qualify for the program, and what are the requirements? Let’s take a broad look at how the program works and then dive deeper into the program’s specifics.
The EB-5 Program from a Bird’s Eye View
The history of the EB-5 program lies in the halls of Congress, which passed an immigration bill in 1990 that included several initiatives, one of which was the EB-5 visa program. EB-5 stands for “employment-based fifth-preference,” and its core purpose is to stimulate the U.S. economy, particularly in rural and other high-unemployment regions, through job growth. Since its inception, the program has been responsible for billions in foreign capital being infused into the U.S. economy through projects from coast to coast.
Investors can procure U.S. green cards not only for themselves but for their spouses and unmarried children under the age of 21 in exchange for a minimum EB-5 investment amount. There are a number of stipulations in the investment process, however, and each investor must satisfy certain criteria of the program.
When an adjudicator for United States Citizenship and Immigration Services (USCIS) is presented with an I-526 petition that outlines an EB5 investment that meets the program requirements, USCIS grants the investor two-year conditional permanent resident status. Then, in the last 90 days of the conditional permanent residency period, the investor must submit an I-829 application that demonstrates how their EB-5 investment met the program requirements. If the adjudicator approves this secondary petition, then the conditions are removed from the petitioner’s permanent residency status.
Four EB-5 Program Requirements for Every Investment
Unlike some other immigration programs, the EB-5 program’s requirements are generally less restrictive. For instance, participation in an EB5 investment is not necessarily reliant on an investor’s language skills, their education level, or their professional experience.
What the EB-5 program does require to grant access to U.S. permanent residency rights is a minimum investment of lawfully obtained funds in a qualified project lasting the duration of the investor’s two-year conditional residency. During that period, the EB5 investment must result in the creation of a minimum number of full-time jobs for U.S. workers. Learn more about these individual requirements below.
Minimum EB-5 Investment Amounts
While participating foreign nationals have no upper limits on the capital they can invest in EB-5 projects, they must meet the minimum investment amount of $1.8 million for projects outside TEAs and $900,000 for projects in TEAs. TEAs are designated by meeting at least one of two criteria:
- An unemployment rate of 50% greater than the national average
- A population of under 20,000 inhabitants
Proven Sources of Funds
Investors must provide the proper evidence to prove the sources of capital funds on every investment are legal. That said, this program is flexible in that EB5 investment capital may be sourced from a variety of origins, so long as it’s proven to have come from lawful sources. Working with an experienced EB-5 attorney is an investor’s best strategy in ensuring the proper documents are provided to USCIS for each funding source.
Investments Must Remain “At Risk”
Throughout the entire EB-5 investment process, USCIS requires that a program participant’s capital maintain an “at-risk” status. This does not mean investors should participate in risky business opportunities. Instead, the investment must incur the possibility of both gains and losses from beginning to end. With perpetually problematic backlogs, it is important to know tactics such as redeployment of capital are available to help investors maintain at-risk status even in the face of inordinate delays.
Job Creation Requirement
Since a cornerstone of the EB-5 program is economic stimulation, EB-5 investment funding must result in the creation of 10 full-time employment positions for U.S. workers before the investor can qualify for immigration benefits. Satisfying the job creation requirement may look different depending on whether an EB5 investment is made directly or through an EB-5 regional center. Working with a regional center allows investors to enjoy relaxed requirements.
EB-5 Direct Investments vs. EB-5 Regional Center Investments
Every EB-5 investment participant can either directly invest in a qualifying project or indirectly invest through an EB-5 regional center. Each route has merits, and both lead to the same destination when the investment is deemed successful. Still, most EB-5 investors choose to work with a regional center, largely because doing so is relatively secure and tends to offer the advantage of greater freedom.
The few foreign nationals who opt for direct EB-5 investments tend to be experienced in business management and have loftier goals when it comes to their financial returns. However, direct investment typically requires a lot more day-to-day management of the investor’s new commercial enterprise (NCE). Thus, investors and their families are typically tied to the geographical location of the project itself. Furthermore, a direct investment also means a more stringent job creation requirement. The 10 positions created by the investment capital must be direct hires of either the NCE itself or associated construction jobs that last two years, minimum.
Investing through a regional center means EB-5 investment capital from multiple investors is pooled together in a larger project. Regional centers with proven track records are managed by business-savvy professionals who conduct careful analysis of projects before offering them as investment opportunities. They can also track down and vet projects in TEAs so that EB5 investors have a higher chance of satisfying the minimum investment requirement with the lower amount of $900,000.
Moreover, USCIS usually deems signing on with a regional center project as a limited partner enough to satisfy the investor’s involvement requirement. The agency also recognizes direct, indirect, and induced jobs that are reported by a professional third-party economic impact estimate as satisfying the job creation requirement when working through a regional center.
For those seriously considering participation in EB-5 investments, this comparison is likely making clear the reason most foreign investors elect to invest through EB-5 regional centers. But is the EB-5 Immigrant Investor Program right for every foreign national in the first place?
Understanding Whether the EB-5 Program Is Right for You
Justification for settling permanently in the United States is easy to come by. Figuring out whether the EB-5 Immigrant Investor Program is the best option for you and your family requires a bit more thought. It has been for hundreds of thousands of foreign nationals with the means to invest in this residency-by-investment program over the last three decades—and could be for you as well.
For more information about the intricacies of this program, visit the EB5AN Insider Blog. If you have questions or need specific advice about your immigration plans and can’t find the answer there, reach out to us directly and ask. We are here to help.