What Is the EB-5 Program?

There is a high global demand for U.S. permanent residency. With some of the best universities and health care facilities, families around the world look to fulfill the American dream by relocating to the United States. The U.S. economy has continued to grow despite the hits dealt by the COVID-19 pandemic. But the economy isn’t the only draw—the beauty of national parks and the richness of museum exhibits across the country lure people to the United States. Although it is comparatively easy to visit the United States, it is much harder to permanently immigrate.

Even if a foreign national qualifies for a visa to live in the United States, their residency often comes with a list of extensive restrictions. For example, university students on an F-1 student visa are generally not allowed to work or intern during their studies.

While other visas do offer a path to permanent residency in the United States, one of the most straightforward paths is through the EB-5 Immigrant Investor Program. An EB-5 investment requires a one-time investment of $1.8 million or $900,000, depending on if the area qualifies as a targeted employment area (TEA). The EB-5 visa program also allows visa applicants to relocate with their families because if the investor qualifies for a green card, their spouse and unmarried children under the age of 21 are also eligible. The EB-5 program has become one of the most efficient ways to immigrate to the United States, and thousands of investors and their families relocate to the United States each year under the program.

What Is the EB-5 Program?

In 1990, Congress formed the EB-5 program to help stimulate the U.S. economy and introduce new jobs in rural communities or areas with high unemployment rates. In return for making a successful EB5 investment in U.S. communities and the economy, qualifying investors are eligible for a green card.

Potential investors must present an I-526 petition to United States Citizen and Immigration Services (USCIS), who will then evaluate whether or not they believe that the investor is likely to fulfill the requirements of an EB-5 visa. Once an investor is granted I-526 approval, they may apply for two-year conditional permanent resident status. Then, in the last 90 days of the conditional residency, the petitioner must submit an I-829 petition showing how the EB-5 requirements were met. If the I-829 petition is successful, the foreign investor will be granted permanent resident status.

EB-5 Requirements

Most U.S. immigration programs have restrictive requirements. The EB-5 investment program’s primary requirements include a committing a minimum investment amount of lawfully sourced capital to an EB-5 project, maintaining the at-risk status of the investment for the entire two-year conditional residency period. The project must meet a quota of newly created jobs for U.S. workers. Unlike many other visa categories, the EB-5 program does not require language skills, an educational background, or professional qualifications.

Minimum Required Investment Amount

The minimum amount EB-5 investors are required to invest in a project is $1.8 million—but an EB5 investment in a TEA project only requires $900,000. For an area to qualify as a high-unemployment TEA, an area must have an unemployment rate 50% higher than the national average. Alternatively, an area may qualify as a rural TEA if it has a population of less than 20,000 people.

Lawful Source of Funds

EB-5 investment capital must be lawfully sourced—and the investor has to demonstrate its legality in their I-526 petition. Depending on the sources of the EB-5 capital, this can entail a lengthy process of requesting documentation from banks, companies, and other entities. It is encouraged that potential foreign investors consult with an experienced EB-5 immigration attorney to determine which funds are best to document. As long as funds are lawfully sourced, however, they can come from anywhere.

“At Risk” Status

Potential investors must invest in a project where their EB-5 investment capital will be “at risk” for the duration of the investment. In theory, an EB-5 investment should take two years—the investor’s period of conditional residency. But in practice, lengthy backlogs have driven up the EB5 investment timeline for nationals from certain countries. To keep their capital at risk, investors may need to redeploy their investments while waiting for their petitions to be approved.

“At risk” doesn’t mean “risky.” Investors should conduct careful due diligence to ensure they’re making a financially wise investment. All “at risk” means is that the investment incurs both the possibility of gain and the risk of loss. There can be no guarantees, but an investor need not dive into a high-risk investment.

Job Creation

The final key requirement for EB-5 investors in that their investment must generate at least 10 new, full-time jobs in the United States that last at least two years. This requirement stems from the goal of the EB-5 program to stimulate the economy and decrease unemployment rates, especially in TEAs. Those who invest through a regional center generally have an easier time meeting the job creation requirement because regional centers offer relaxed job creation criteria.

Direct EB-5 Investment vs. Regional Center EB-5 Investment

Foreign investors must decide whether they want to make a direct EB-5 investment or an investment through an EB-5 regional center to get their U.S. green card. There are benefits to both types of investment, but ultimately, most EB-5 investors opt for the regional center route because they can enjoy more security and freedom.

An EB5 investment in a regional center is a generally passive investment. A regional center sponsors an EB-5 project that multiple EB-5 investors put money into. The regional center operators—reputable business experts—manage the investments, allowing investors to benefit from the expertise of seasoned EB-5 professionals. Regional centers primarily work with TEA projects because the required investment amount is lower, making an EB-5 investment more enticing to foreign nationals. Partnering with a regional center also makes it easier for investors to meet the job creation requirement because induced and indirect jobs also count toward the total number of jobs created.

While investing through a regional center makes the process more streamlined, experienced business managers may choose to make a direct EB-5 investment and employ their own expertise. Direct investors must be willing to live near their project, as they will have to be involved in the day-to-day decisions. To meet the job creation numbers, the investor must fund the creation of 10 direct jobs.

Why Invest in the EB-5 Program?

An EB-5 visa opens up a world of opportunities for foreign nationals to achieve the American dream. Permanent residents can apply for U.S. citizenship after five years of permanent resident status in the United States. But obtaining citizenship isn’t necessary—permanent residents can access the renowned medical facilities and public education system in the United States, enjoying almost all the same rights and privileges as citizens.