Oftentimes, the ultimate goal for EB-5 investors and their eligible family members isn’t to garner profits from their capital investment, nor is it necessarily to gain U.S. permanent resident status. For many EB-5 investors, their eye is on the real prize of U.S. citizenship. Sure, permanent residents enjoy the majority of rights and freedoms afforded to U.S. citizens, but there are some limitations. No permanent resident may take up political office, for instance. They must also concern themselves with jeopardizing their residency status by spending too much time abroad. Citizens of the United States needn’t worry about either of these issues.
Gaining permanent resident status is, however, an important first step in becoming a U.S. citizen, and participating in an EB5 investment is one of the easiest pathways to residency. Through an EB-5 investment in a qualified project, the submission of proof of creating a minimum of 10 full-time jobs for U.S. employees, and meeting all other program requirements, EB5 investment participants may obtain permanent residency rights for themselves and eligible family members.
Following five years of life as a permanent resident in the United States, including time spent as a “conditional” permanent resident, the opportunity to apply for naturalization and become a U.S. citizen opens. Learn a little more about the pathway from prospective EB-5 investor to U.S. citizen below.
What to Know About the EB-5 Investment Process
Although investing through the EB-5 program is by and large one of the swiftest routes to obtaining a U.S. green card, it is not without its own set of unique complexities. Planning to conduct the proper due diligence is imperative as a prospective EB-5 investor. Most EB-5 investments end in success, their eligible participants all obtaining green card status, but not before spending time evaluating both financial and immigration eligibility risks of any project within an investor’s consideration set.
Extended processing times are another consideration to make when planning an EB-5 journey. Although key indicators (and the latest proposed legislation, the EB-5 Reform and Integrity Act and the U.S. Citizenship Act of 2021) point to drastically reduced processing times in 2021, over the last decade, long wait periods have plagued the program. Chinese and Vietnamese investors in particular have suffered heavy backlogs for years.
Complete honesty about the obstacles an investor is likely to face on their EB-5 journey is key to successful EB-5 investment. Understand that, as with any investment, there are no guarantees in the EB-5 program, but familiarizing yourself with best practices and common work-arounds to these obstacles is the best way to ensure a smoother EB-5 journey.
How Reputable Regional Center Partnership Makes a Difference
Affiliating with an EB-5 regional center is not mandatory, but it is recommended. Indeed, it is also the most-travelled path among foreign nationals choosing to invest in an EB-5 project, and there are a number of reasons for that:
- Regional center investors have access to the unparalleled industry experience and expertise of seasoned regional center operators, which can help protect their EB-5 investment and streamline the experience.
- Investing in a regional center changes the level of required investor involvement—for investors too busy to engage in daily management for the new commercial enterprise (NCE), participation in high-level activities like board decisions and voting is sufficient.
- Regional centers pool EB-5 investment capital resources from multiple investors and funnel them into larger, often more prominent projects.
- Regional centers are also afforded the ability to count both indirect and induced jobs toward an individual investor’s job creation requirement.
Some of the things prospective investors should thoroughly examine when considering an EB-5 regional center are the entity’s track record for gaining I-526 and I-829 petitions approvals, its history with projects similar to your project of interest, and its ongoing relationship with a given project developer. Even going so far as to verify regional center operators’ and project developers’ backgrounds and credentials is necessary. If you get this far, inspect the NCE business plan.
Determining whether past investors have received repayments for their EB5 investment is also wise. Look through the backgrounds and credentials of both the regional center operators and the project developers, and inspect the business plan of the NCE. It’s also a good idea to check the job creation buffer, whether the project qualifies for targeted employment area (TEA) status, and the exit strategy of the EB-5 investment.
What Applying Strategically to the EB-5 Program Can Do
There are a number of areas within the EB-5 investment process that can prove tricky to navigate. Applying strategically can greatly impact the speed and efficacy of the process. Meeting the source-of-funds requirement, for instance, can become complex fairly quickly depending upon where an investor’s capital came from. Proving that all EB-5 investment funding was legally obtained is often difficult and time consuming. An experienced EB-5 immigration attorney can help devise a strategy that considers which fund sources are easiest to document, and hiring one is one way to decrease an investor’s risk of receiving a request for evidence (RFE), which is bound to delay the EB-5 investment process.
Another good example of strategic application might involve specific groups of investors from backlogged countries. Let’s say an investor’s country of origin is China or Vietnam (both with known backlogs as of March 2021), but their spouse is from a country that is not currently backlogged. An experienced EB-5 professional might advise the couple to file their I-526 petition under the spouse’s country of origin to dramatically accelerate their EB-5 journey.
Every EB-5 investor’s path is unique, and having seasoned professionals available to them can make all the difference in their strategic application to the EB-5 program. But what about after an investor has successfully completed the investment process and has lived in the United States for years? What next?
Applying for U.S. Citizenship
Even before the end of an EB-5 investment, an investor’s clock to U.S. citizenship has already begun ticking. Once I-526 approval is obtained and the two-year conditional permanent resident status has been granted, that time is counted toward the five-year permanent residency status, whether the investor ultimately decides to apply for citizenship or not. After five years is up, EB-5 investors and their immediate family members are eligible to apply for citizenship in the United States. Note that permanent residents must meet the following criteria to be eligible for U.S. naturalization:
- Refraining from travel outside of the United States for more than six months of a given year
- Paying all U.S. taxes owed
- Abiding by all U.S. laws throughout your time in the United States
Once an EB-5 visa holder determines they meet all of these (and any other) eligibility requirements, to file for U.S. citizenship, they must file a Form N-400, which should be accompanied by necessary supporting documents and associated fees. This form can be filed online, but in-person biometrics appointments are often required. Once these steps have been completed, an interview will be conducted, a citizenship test covering U.S. history and politics administered, and an Oath of Allegiance taken. Naturalization application processing times vary by location.