The EB-5 Visa Immigrant Investor Program was created to help stimulate the U.S. economy through foreign direct investment. The immigrant investors must invest in a new commercial enterprise of a designated size. This can be done several ways which include purchasing an existing enterprise, reorganizing or restructuring an enterprise to maximize results, or by providing evidence that investment will increase net worth or number of employees by at least 40%.
The investment must be at least $1,000,000, and create 10 jobs eligible for American workers. However, in some rural areas with high unemployment that are considered targeted employment areas, the investment can potentially lower to $500,000. This program was created with the specific intent to encourage foreign investment, create new American jobs, and to stimulate economic growth.
The EB-5 Visa is Different From Other Work Visas
The qualifications for this visa are partly what make it stand out so much from other employment-based visas. While many visas have qualifications such as requiring you to speak English, having specific work experience, and meeting higher educational requirements, the EB-5 visa only requires you to be able to make the investment legally.
The EB-5 visa is also unique because college fees are offered at the same rates as US citizens. Many people apply for this visa with the intent of allowing their children to attend American Universities, and not all visas allow for this to be done at the same rate as US citizens.
Employment-based visas like the H-1B (which is the traditional employment visa) have long waiting lists, a large number of applications, and they work on a lottery system. The long waiting lists are a big reason why so many people are choosing the EB-5 visa because it’s currently not that long. The waiting list for an EB-5 visa is about 18-24 months, whereas the waiting list for the H-1B visa can be 10 years long in some cases.
Capital Investment Requirements
To meet the capital investment requirements, the secured assets must be in the form of cash, inventory, intangible property and equipment. This capital is calculated according to the U.S. fair-market value for the same or similar assets. Capital cannot be borrowed, it must come from the investor themselves. This does include debt leverage that is commonly used in the acquisition of businesses outside of the visa program. Capital includes cash, equipment, inventory, all tangible property, indebtedness owned by the foreign investor, and cash equivalents owned by the foreign investor.
The minimum investment in a business required for this visa is one million U.S. dollars. If the business is in a Targeted Employment Area (TEA), then the minimum drops to $500,000. A rural area is an area outside the boundary of a city or town that has a population of less than 20,000, or more according to the decennial census. A targeted employment area is a rural area that at the time of the investment is experiencing unemployment of at least 150% of the national average.
Commercial enterprises that are eligible for these investments include for-profit entities, sole proprietorships, corporations, general or limited partnerships, holding companies, joint ventures, or other legal public or private financial subsidiaries or structures.
How to Invest
Choosing where to make your investment is actually relatively easy with the assistance of an immigration attorney or another immigration assistance program. They typically will have a list of approved EB-5 regional centers for you to pick from. All you have to do is look at the list and choose a regional center that meets your personal requirements and perhaps interests you in some way. Regional centers are alternatives to EB-5 visa holders investing individually. Regional centers are federally approved third-party intermediaries that profit through a commission by connecting foreign investors with developers in need of funding. They are usually private for-profit businesses that are approved by the U.S. Citizenship and Immigration Services. This means that someone wishing to obtain an EB-5 visa does not have to start their own business; they can invest in one that is known as a regional center.
Private and government agencies are allowed to apply to be a regional center, however, the process is rigorous. They must submit plans a detailed plan on how economic growth will be promoted with the investment, how jobs will be created, the amount and source of capital required to make this happen, and how they will be able to have a positive economic impact. As mentioned before, if these regional centers are located in rural areas with high unemployment, a $500,000 investment may be all that is required on your part. If that is not the case of the regional center, then a $1,000,000 investment is required. Speak to an immigration attorney for more information, help on how to apply for the EB-5 visa, and to schedule your free consultation.
Beeraj Patel, Esq.
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