What passive investments qualify for the EB-5 program?

Passive investments, such as stock ownership, are not sufficient for the purposes of obtaining an EB-5 visa. Nevertheless, it is possible for an EB-5 investor to take a more hands-off approach to the process and still acquire a U.S. green card.

For prospective EB-5 investors who wish to take a more hands-off approach to the process, a good option is indirect investment. This model of investment entails investing in a project sponsored by a regional center. EB-5 regional centers are agencies that serve to manage EB-5 investment capital for an assortment of projects and ensure that the projects are compliant to United States Citizenship and Immigration Services (USCIS) requirements.

The benefits of going the regional center route are manifold. For an investor who was originally interested in making a passive investment, the indirect model’s leniency in terms of operational and managerial involvement may be appealing. Regional center investors typically take on the role of a limited partner in a limited liability company, so their level of involvement extends primarily to policy-making decisions rather than the actual running of the business. Because they are not required to be involved in the running of the business, they are granted the additional liberty of being able to live anywhere in the United States, their project’s location notwithstanding.

The direct model differs in this regard. The management structure of a direct EB-5 investment requires these investors to live close to their business and be heavily involved in the daily management and operations of the company. To some investors, this is ideal, but to an investor who originally wanted to make a passive investment, the regional center route might be more suitable.

In addition to their limited role in the management of the business, regional-center-sponsored investors can enjoy a more flexible job creation requirement. Unlike direct EB-5 investments, which can only count direct positions, regional-center-sponsored projects can count indirect and induced positions toward their mandated quota.