The EB-5 Immigrant Investor program was adopted into law in 1990 with the goal of stimulating the American economy by creating American jobs through foreign investment. This is done with a minimum investment of $500,000 into a new commercial enterprise of a designated size. The investment can be made by purchasing an existing enterprise for reconstruction or reorganization to maximize results, or by showing that the investment will increase the network of the company or number of employees by a minimum of 40%. The EB-5 visa has become a lot more popular recently, and as a result, has gotten the attention of the government. Currently, the government is talking about making big changes like raising the minimum investment requirements and restructuring the Regional Center Program. Many of these changes are waiting on the approval of Congress and USCIS.
Who It’s For
Compared to other visas, the EB-5 is seen as offering a certain and smooth path to becoming a US immigrant. This is mostly due to the fact that this program has no educational or special qualifications requirements, it only requires you to make an investment. When it comes to the EB-5 visa, there are only two qualifications that you must meet. First, you must be able to invest at least $500,000 (plus additional costs such as fees and taxes) into an approved program that will create at least 10 permanent full-time American jobs. Second, you must be able to prove this money was lawfully obtained and that it’s not borrowed money.
EB-5 investors are required to invest in a new commercial enterprise in order to receive a visa. A major decision that has to be considered is whether or not the enterprise was established before or after November 29, 1990. If it was established before this date, the enterprise must be purchased and the existing business is reconstructed or reorganized in such a way that a new commercial enterprise results. If the enterprise existed after November 29, 1990, then the EB-5 applicant must plan to expand the enterprise through the investment so that a 40-percent increase in the net worth or number of employees occurs.
Aside from new commercial enterprises, there are also other commercial enterprises that apply for investments to obtain an EB-5. The term commercial enterprise applies to all for-profit activity formed during the ongoing operations of a business. This can include a sole proprietorship, partnerships whether limited or general, holding company, joint venture, corporation, and a business trust or other entity which may be publicly or privately owned. An EB-5 visa applicant must provide proof of the capacity to preserve or create 10 new full-time roles for qualified US workers.
The EB-5 Visa in 2018
There is actually a lot of uncertainty currently about the EB-5 and what the program will look like moving forward. The EB-5 Reform Act has been brought up and suggests that major changes are made to the program. However, this Act has not seen a lot of progress so far in Congress, so changes are not likely to come anytime soon. Some of these introduced changes include: raising the minimum investment amount from $500,000/$1,000,000 to $925,000/$1,025,000, reserving an annual number of EB-5 visas for immigrant investors who invest in rural areas, increasing the job creation requirement to 12 employees, increasing documentation needed to prove the legality of the funds used for the investment, and adding annual fees to those who decide to invest in regional centers. Whether these changes will be approved or not is yet to be seen.
Another dilemma the EB-5 visa may be facing in the future is reaching the cap number of applications that can be accepted from each country. This is particularly true in India where the number of applications is skyrocketing and they are expected to reach their cap this year, meaning no more applications will be accepted for this year. India is not the only country facing this problem, and reaching the cap is likely to make the waiting list for this visa longer.
Because changes are expected to happen to the EB-5 visa in the future, some developers are waiting to see what will happen with the Regional Center Program, and others are exploring other funding avenues. This could potentially mean a smaller number of regional centers to invest in for the near future. With the potential of the changing EB-5 visa, some projects are less likely to seek as much funding from EB-5 investors. However, some developers that are currently in the midst of fundraising are scrambling to get investors before changes happen. If you are interested in applying for the EB-5 visa, reach out to an Immigration Attorney for more information and to schedule a free consultation.
Beeraj Patel, Esq.
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