The purchase of an apartment would likely not qualify as an EB-5 investment for several reasons. First, an EB-5 investment must meet an at-risk requirement in accordance with EB-5 regulations. Because real estate is a property with fixed value, it cannot be characterized as an at-risk investment. Furthermore, an EB5 investment must generate jobs through the venture, and buying property does not generate employment.
To acquire an EB-5 visa, prospective investors need to invest in a new commercial enterprise (NCE). Any of the following profitable, legitimate business structures can be considered an NCE: individual ownership, limited or general partnership, holding company, joint venture, corporation, or trust. An NCE could also be a parent company and its subsidiaries or branches. The official definition of an NCE does not encompass noncommercial activity, including purchasing and owning real estate.
EB-5 regulations stipulate that an investment must be at-risk. This condition is in place to ensure an EB-5 investor’s funding capital is used properly. The investor must use the given capital to finance an NCE that will generate the required number of jobs and contribute in enhancing the U.S. economy. While the title of this regulation may denote that investors must choose unpredictable, high-risk ventures to invest in, in actuality it simply indicates the possibility of monetary loss and potential of financial reward that an EB-5 investor must be liable to.
Currently, the minimum investment amount stands at $1,050,000. However, certain regions in the United States, including rural regions or places with higher levels of unemployment may qualify for a lower investment threshold of $800.000. These areas, known as targeted unemployment areas (TEAs), are assessed and classified by United States Citizenship and Immigration Services (USCIS), who reserve the right to change their designations. The EB-5 funding invested in an NCE must generate a minimum of 10 full-time, permanent positions for authorized U.S. workers. Investors can follow either the direct investment model or make an indirect investment through a regional center.
