Read on to better understand the EB-5 investor visa cost and what that means for prospective visa applicants.
Here’s what we’re going to cover:
What is an EB-5 Investment?
Since 1990, the EB-5 Immigrant Investor Program has provided the quickest route to U.S. citizenship available to foreign nationals. An investor, their spouse, and unmarried dependent children can receive permanent resident status when they meet the minimum capital investment amount in a qualifying “for-profit” enterprise established after 1990. These businesses must fulfill the requirements of United States Citizenship and Immigration Services (USCIS). Furthermore, the invested capital must be considered “at-risk” so there is no guarantee of returned funds.
How Much Does an EB5 Visa Cost?
The minimum EB5 capital investment amount is $800,000 for projects inside targeted employment areas (TEAs) and $1,050,000 for projects outside of TEAs. On top of the investor visa USA cost, investors should be prepared to cover additional charges throughout the immigration process, such as administrative fees and lawyer services.
What are TEAs?
A targeted employment area (TEA) is a region in need of economic stimulation and job creation. There are two types of TEAs: rural and high unemployment.
A rural TEA is defined as an area that houses less than 20,000 inhabitants, is not within a metropolitan statistical area (MSA), and does not border a city or town with a population over 20,000.
To be classified as a high-unemployment TEA — the more common of the two — a region must be an urban area that shows an unemployment rate of at least 150% of the national average.
An EB5 minimum investment into a TEA project benefits the American government by promoting economic growth and lowering the EB-5 visa cost. Additionally, the lower EB5 minimum investment of $800,000 entails lower financial and immigration risks.
EB-5 Regional Center vs. Direct Investment
Created in 1992, the EB-5 Regional Center Program provides indirect investments in projects sponsored by regional centers. These are favored by the majority of EB-5 investors compared to direct investment (that is, projects not sponsored by a regional center), due to more flexible job calculation.
Regardless of whether a project is sponsored by the regional center program, investors must fulfill the same requirements: provide legally obtained funds to meet the EB5 minimum investment amount and create 10 full-time jobs for American workers that last for at least two years.
However, the direct and regional center investment models count created jobs differently. Direct investments can only count direct jobs, while regional center investments can include direct, indirect, and induced employment.
Direct jobs, such as ongoing operational jobs, are those created by the project. It is important to note that the following are excluded from direct job creation totals: positions occupied by people who work on the site but are not employed by the New Commercial Enterprise (NCE); positions filled by the investor or their immediate family; part-time positions combined to create positions equivalent to full-time. Additionally, direct investments into businesses located in TEAs must employ workers stationed within the designated TEA.
Indirect jobs are created by regional centers projects’ spending in the region on goods and services that are provided by local companies, such as equipment. Induced jobs come from employees of the project spending their wages. Indirect and induced jobs are calculated through an economic impact study.
While projects sponsored by a regional center can count all three types of jobs, indirect and induced jobs cannot make up more than 90% of the EB-5 employment requirement.
Application Fees for Filing Petitions
For a successful immigration process, three separate petitions must be filed with USCIS:
- Form I-526 (Immigrant Petition by Alien Entrepreneur)
- Form I-485 (Application to Register Permanent Residence or Adjust Status)
- Form I-829 (Petition by Entrepreneur to Remove Conditions on Permanent Resident Status).
Supplemental filing fees for these petitions add to the total EB-5 visa cost. (The following filing fees are up to date as of April 2022.)
Filing cost: $3,675
As the first petition investors must file, the purpose of Form I-526 is to prove the funds provided to meet the chosen EB5 investment amount were legally obtained and that the proposed project will meet EB-5 requirements. Upon approval of Form I-526, an investor receives conditional resident status that remains valid for two years.
Filing cost: $1,140 plus $85 for biometric services
Form I-485, which can be filed concurrently with Form I-526, determines an investor’s eligibility for immigration to the United States. Supporting documents can include but are not limited to medical records, birth certificates, criminal background information, and biometrics.
Filing cost: $3,750 plus $85 for biometric services
The main purpose of Form I-829 — which must be filed in the last 90 days of conditional permanent residency — is to document that the EB-5 investor has met the requirements of the EB-5 program, those being the sustainment of an NCE, the minimum required EB5 investment amount into the NCE, and the creation of 10 permanent, full-time jobs for U.S. workers.
Will There Be Legal Fees in the EB-5 Investment Process?
Having an attorney who specializes in immigration will ensure that regulations are followed and that documents are submitted correctly and on time. An attorney can also provide valuable advice and help an investor understand every step of the process. Choosing the right attorney is just as important as having one. Working with inexperienced counsel can jeopardize an investor’s chance of success and hinder the immigration process.
EB5 Affiliate Network can assist investors with finding reliable and experienced attorneys. When considering counsel, EB-5 investors should focus on four aspects:
- Track Record — Attorneys with a history of successful petitions and who have worked with a substantial number of investors are generally the most reliable.
- Effective Communication — Transparency and streamlined communication between an investor and their attorney are ideal. An attorney needs to be able to answer questions frequently and in a timely manner.
- Positive Client Testimonials — An attorney’s reliability increases if they can provide positive client testimonials. Investors are encouraged to look for client reviews on the attorney’s services.
- A Source-of-Funds Strategy — Gathering the legal source-of-funds required for Form I-526 can be a distinctly challenging part of the petition. An immigration attorney with an effective plan for dealing with this can help simplify the process.
EB-5 Tax Planning
Many EB-5 investors’ countries of origin only collect income tax on earnings within their borders, but the U.S. taxation system accounts for worldwide income and assets. Tax planning prior to immigration is essential for EB-5 investors who want to reduce income and estate taxes following their arrival in the United States. Consulting a tax attorney and learning about taxation rates, residence statuses, and effective strategies allows investors to plan accordingly.
U.S. Resident Tax Status
An EB-5 immigrant is recognized as a U.S. tax resident and subject to U.S. tax laws after the start date of their residence in the United States. There are two kinds of taxes, income and estate, and both have different resident start dates.
For income tax, an EB-5 investor is considered a U.S. tax resident under the following criteria :
- If they hold a green card, the start date of residence is the date on which they become a permanent resident.
- If they elect to be considered a U.S. tax resident.
- If they pass the substantial presence test.
With estate tax, an EB-5 investor is recognized as a U.S. tax resident from the date which they plan to remain in the United States. This is determined through factors such as frequency of travel, the existence of social and/or family connections in the United States, and the EB-5 visa application itself.
How to Plan for the U.S. Tax System
While EB-5 investors have the ability to plan for the U.S. tax system prior to immigration, tax planning is often difficult to navigate. However, certain strategies can prove useful for investors. Typically, the first step investors take is to get rid of assets and monetary gain before applying for permanent resident status, which can be achieved through methods such as establishing a foreign trust prior to the residence start date. Because such trusts are not considered U.S. assets, they cannot be taxed. There are, however, conditions to keep in mind when implementing this strategy. It is therefore crucial for EB-5 investors to plan carefully to successfully navigate U.S. tax laws and lower the total funds involved in the EB5 visa cost.
Since its inception in 1990, the EB-5 Immigrant Investor Program has provided foreign investors with the fastest route to U.S. citizenship with the EB-5 visa. Moreover, the EB-5 Regional Center Program can simplify this process while also raising immigration safety and lowering the EB5 visa cost. Investors who provide funds to meet the EB5 minimum investment amount ($800,000 for targeted employment area projects and $1,050,000 for non-TEA projects) and meet United States Citizenship and Immigration Services requirements are eligible for an EB-5 visa—and a new life in the United States.