Why is the EB-5 Investment Program Better Than Other U.S. Immigration Programs?

Many foreign nationals dream of moving to the United States. The United States has many immigration programs for foreign nationals to immigrate either permanently or temporarily, but many of these options come with restrictions or do not allow for permanent immigration. For a foreign national looking to permanently immigrate to the United States, the EB-5 Immigrant Investor Program is the best option available.

What Is the EB-5 Investment Program?

The EB-5 investment program is not a conventional immigration program. The program’s basic premise is that a foreign national invests in a qualifying project and then earns U.S. permanent residency status if they fulfill the program’s requirements. The program’s requirements are relatively rigorous, although if a foreign national qualifies, the EB-5 investment program is their safest and quickest path to receiving a U.S. green card.

One of the program’s most difficult requirements to satisfy is coming up with the EB-5 investment amount. For the EB-5 investment program, a foreign national must invest at least $1.8 million in a qualifying U.S. enterprise or business, called a new commercial enterprise (NCE). However, this amount drops to $900,000 if the business is in a targeted employment area (TEA). Finding a TEA-qualified project is, fortunately, a relatively simple process, as most EB-5 regional centers work either exclusively or almost exclusively with TEA projects.

EB-5 investors typically hire an experienced EB-5 attorney to help them navigate the EB-5 investment program’s complex regulations. For instance, EB-5 investors must also prove that their EB5 investment capital is derived from lawful origins. Depending on the source of their investment, this can be a time-consuming and challenging process if an investor does not employ the assistance of an attorney. Investors should also hire an experienced EB-5 attorney who can assist the investor in selecting the best EB-5 project for their needs and help them conduct the necessary due diligence on EB-5 regional centers. Finding a good project is important because an EB-5 investment must create at least 10 new full-time jobs for U.S. workers.

The EB-5 investment also has several benefits not shared by many other U.S. immigration programs. Below are three of these benefits.

EB-5 Investment Participants Can Come from Anywhere

Many employment-based U.S. programs have restrictions for applicants of specific nationalities. The E-2 program, for instance, offers two-year visas for investments made in U.S. companies by foreign nationals from treaty countries. However, the EB-5 investment program has no such restrictions. While the program does disadvantage certain nationalities, with backlogs for some countries meaning that EB-5 investors of certain nationalities have longer waits, any foreign national can make an EB-5 investment and receive U.S. permanent residency rights.

An Investor’s Family Can Also Qualify for U.S. Permanent Residency Status

An EB-5 investor’s spouse and unmarried children younger than 21 can also qualify for EB-5 visas. Under other U.S. immigration programs, minor dependent children must apply for permanent resident status when they turn 18. Children of EB-5 investors, however, automatically receive U.S. permanent resident status.

There are many advantages of U.S. permanent resident status for minors. Children of EB-5 investors can attend public schools for free. When these children start to apply to college, they also have an increased chance of admission to elite U.S. universities and may also receive in-state tuition savings. If they choose, they can also work freely during their studies, unlike F-1 visa students.

EB-5 Investors Can Earn Passive Income

The EB-5 investment program differs from other U.S. immigration programs in that foreign nationals can earn passive income in addition to immigration benefits. Most other employment-based immigration programs offer immigration benefits in exchange for an employed position at a U.S. company, with stringent restrictions on employment outside of the single approved position.

Not all EB5 investments are passive. If an investor chooses to invest directly in an EB-5 project, they will have substantial managerial requirements. However, the vast majority of EB-5 investment participants invest through an EB-5 regional center. Regional center investors are typically limited partners, meaning that they do not need to live near their project and do not have substantial managerial requirements.

An investor’s financial return completely depends on the project they choose to invest in. EB-5 investors have traditionally earned only limited returns due to low-interest rates. However, the 80% increase in the minimum investment amount following the Modernization Rule being enacted in November 2019 may increase investment returns until EB-5 demand increases to pre-enactment levels. EB-5 investors should act soon to increase the chance of earning above-normal returns on their passive EB-5 investment.