Dreams of immigrating to the United States are unwavering among foreign nationals around the globe. Fortunately, there are plenty of U.S. programs welcoming talented immigrants to live and work inside its borders—some temporarily, others permanently. That’s not to say every U.S. immigration opportunity is created entirely equal, however. Depending on one’s personal, career, and overall business goals, there are clear benefits of some programs over others.
The EB-5 Immigrant Investor Program is an optimal choice compared to other available U.S. employment-based immigration options. Three key advantages that make it so:
- EB-5 investors’ qualifying relatives are eligible for green cards under the same investment
- EB-5 investments can garner passive income
- EB-5 investment participants are not restricted based on nationality
Let’s take a deeper dive into each of these benefits and how they compare to some of the other U.S. immigration options out there.
EB-5 Investors’ Qualified Relatives Are Eligible for Green Cards
The single most exciting aspect of this residency-by-investment program for many prospective EB-5 investment participants is that an investor’s immediate family (spouse and unmarried children under age 21) are also automatically eligible for EB-5 visas under the same investment. Additionally, minor children of EB-5 investors gain permanent resident status as a direct result of a successful EB-5 investment by their parents.
This isn’t the case for other immigration programs. Some require applications for every person interested in coming to the United States, and the programs that do allow minor dependents to accompany parents into the United States require a new application to be filed for permanent residency status when they become 18 years old.
Furthermore, minor permanent residency status holders in the United States have access to a number of additional advantages:
- Access to a free public-school education, offering full immersion in English and U.S. culture
- An easier admissions process for public colleges and universities in the U.S.
- In-state tuition savings, when choosing to attend college in the same state where they live
- A pronounced advantage over F-1 visa students due to the ability to work while studying
Beyond the huge advantages the EB-5 program offers to its investors’ families, an EB5 investment can also directly contribute to an investor’s finances.
EB-5 Investment Participants Can Earn Passive Income
This is a defining element of the EB-5 program—while most employment-based immigration opportunities provide U.S. status for employment with a U.S. company, EB5 investment participants enjoy the same (or better) immigration benefits through a passive investment. It is the only program, in fact, offering foreign nationals immigrant status while earning a passive income.
The amount earned on an individual’s EB5 investment capital, as with any investment, depends on the project. Investors who are concerned with return on investment should certainly review new commercial enterprise (NCE) documents with a fine-toothed comb to determine their interest rate, among other things. Normally, an EB-5 investment would garner limited returns due to low interest rates, but after the minimum investment amount nearly doubled with the enactment of the Modernization Rule at the end of 2019, offerings may be improved until EB-5 demand returns to pre-enactment levels. As such, choosing to invest sooner rather than later could garner higher-than-normal returns on a passive EB-5 investment.
It is important to note that not every EB5 investment is passive. Should a program participant elect to invest directly in an EB-5 project, they do have the opportunity to engage more fully in the day-to-day management of the NCE. However, data shows most prospective EB-5 investors wind up choosing to invest through an EB-5 regional center. This popular option allows them to affiliate as a limited partner. Under this kind of arrangement, the investor is only required to vote on important matters. In fact, they are not even required to live near their project.
The other huge advantage of participating in the EB-5 program to meet one’s immigration goals is that EB-5 investors are not restricted based on nationality.
EB-5 Investors Are Not Restricted Based on Nationality
The EB-5 program is open to any foreign national with the means to invest in a qualified EB-5 project, and in exchange for a successful investment, it offers the opportunity to gain permanent residency rights. This is not so for all U.S. employment-based immigration programs. For instance, participation in the E-2 program provides two-year visas only for foreign nationals from treaty countries who make a substantial investment in U.S. companies.
So, while it is true that EB-5 investors from certain countries are subjected to extended backlogs, the longer waits are merely delays. Anyone is free to make an EB-5 investment. Is the EB-5 Immigrant Investor Program right for you? Learn more about participation below.
Participation in the EB-5 Immigrant Investor Program
One key discernment between the EB-5 program and other, more conventional immigration options is that it is a residency-by-investment program model. Any interested foreign national may initiate an EB-5 investment in a program-approved project, and contingent upon fulfilling program requirements, they may earn U.S. green cards for themselves and any of their eligible family members, which allows them to permanently reside in the United States. A number of these investment requirements are designed to protect the integrity of the program, avoid fraud, and ensure EB5 investment capital benefits the U.S. economy.
Eligibility begins with the commitment of a $1.8 million minimum investment in a program-approved new commercial enterprise. The program also offers a substantial incentive for selecting projects in targeted employment areas (TEAs), however—these specific locations are designated based on a higher need for economic stimulus and job growth. The minimum investment required in a designated TEA is half the normal amount required ($900,000). The majority of EB-5 regional centers, like the ones managed through the EB5 Affiliate Network, manage TEA projects exclusively. What this means for investors is that finding a TEA project suitable to an investor’s goals and objectives is relatively simple when working with a regional center.
Another primary program requirement is to provide proof that all EB5 investment capital is derived from lawful origins. This can be a challenging and time-consuming task depending on funding sources, but working with an experienced EB-5 attorney can help streamline this process. Additionally, a seasoned EB5 legal team can provide insights for selecting the best EB-5 project for their needs and can assist in conducting the necessary due diligence.
All these efforts maximize an EB5 investment participant’s chances of choosing the NCE that will ultimately meet program job creation requirements—one of the most important requirements to United States Citizenship and Immigration Services (USCIS). For an investment to be deemed successful, it must have created and sustained for a minimum of two years at least 10 new full-time jobs for U.S. workers.
To learn more about the EB-5 Immigrant Investor Program or for greater insight into whether this program is the right immigration option for you and your family, check out more EB5AN blog topics or reach out to us directly and get the answers you need.