High net worth individuals who would like to immigrate to the US on a permanent basis may get approved for permanent resident status through investment.
The program that allows for this is called the EB-5, or the Employment Creation Visa. Since this type of Business Immigration Visa may be new to you, we should dig a little bit deeper.
The general requirements are that the investor be in the process of investing or have already invested US$ 1,000,000 (US$ 500,000 in certain situations, described below) in a new commercial business and create a minimum of 10 new full time jobs within that enterprise within 2 years.
A successful application results in a 2-year conditional permanent resident status to allow the investor time to invest the funds in the U.S. enterprise and create the 10 new full time jobs.
Before the 2-year period ends, the investor needs to file an application to eliminate conditions on residence, showing the U.S. Citizenship and Immigration Services (USCIS) that the investment was made and that the 10 new full time jobs have been created.
If the investor can verify that these requirements have been met, USCIS should remove the conditions and send an approval with a 10-year permanent resident card, replacing the initial 2-year card.
The status leads to the possibility for U.S. citizenship 5 years from the initial approval for conditional resident status.
EB-5 Investment Requirements
The basic requirement for investment is US$ 1,000,000. It does not need to have been invested to file the case with USCIS. The EB-5 hopeful must just be in the process of investing. Once invested, the funds must be determined high risk and devoted to the investment business.
While the investment is typically cash, that is not a requirement. Instruments and supply to be used in the commercial enterprise can be counted towards the investment amount.
Loan proceeds can also be used so long as the loan is secured by the investor individually or by assets that the investor possesses and are not being used in the investment business.
Funding the investment through loans secured by possessions adds risk to the process, and the strategy must be thoroughly reviewed by a qualified and experienced attorney before proceeding.
The investor must be able to document every dollar being used in the investment back to its source, to ensure that the funds are legally his or hers and procured completely legitimately.
Additionally, gifted funds are allowed as long as it can be proved that the giver has freely presented the funds and is not receiving reimbursement or anything else of value in return for the gift. Gifted funds do not need to come from a family relationship.
Exceptions to The US$ 1,000,000 EB-5 Investment Requirement
In some scenarios, US$ 500,000 can be sufficient to qualify an investor for the EB-5 program. One technique is by setting up the investment business in an economically challenged community. As an example, rural areas with fewer than 20,000 in population qualify as a Targeted Employment Area.
Another technique is for the investor to demonstrate that the area wherein the investor will operate the investment enterprise is one of high unemployment, 150% of the national average. The data provided to establish adequate unemployment must be from government sources.
The other approach is to invest with a Regional Center. A Regional Center is an investment company accredited by USCIS and other government organizations to supply investment options to investors anticipating permanent residence through EB-5.
The list of authorized regional centers can be found at the following link: EB-5 Immigrant Investor Regional Centers.
Not all regional centers are created equal. Any investor considering investing with a Regional Center must be very mindful to consider the practical experience and success rate of the company before investing. Also, an investor should coordinate with investment, tax and other advisers to review the different offerings made by the company and consider risks, tax implications and overall portfolio effect before committing to a specific investment.
A Regional Center investment cannot be one that ensures the return of the investment. The dollars invested must be high risk.
There are considerable advantages to investing with a Regional Center, and we generally encourage this approach for these reasons. One, as stated above, is the reduced investment requirement of $500,000 compared to the $1,000,000 requirement through direct investment outside of an economically challenged area.
The other is that the Regional Center investment does not have to result in the creation of 10 new full time jobs per investor in the same way as processing through direct investment.
Regional Center investments enable the consideration of economic impact on the local economy in the form of indirect employment. Reasonable economic methodologies can be used to establish sufficient indirect employment to meet the employment creation requirement.
At Davis & Associates, we are experienced helping our clients successfully navigate the EB-5 process. Contact us to discuss your questions about the process. We would be happy to help!
Garry L. Davis, managing attorney for Davis & Associates, an immigration law firm, graduated from the University of Texas School of Law and Brigham Young University. Board certified in immigration and nationality law by the Texas Board of Legal Specialization, he has been selected as a Texas Super Lawyer and for Best Lawyers in America. He served the American Immigration Lawyers Association as the Dallas immigration court liaison and as program co-director for a Texas chapter CLE conference held in Mexico. He has frequently spoken on immigration issues by various organizations.
For more information, call us at 832-742-0444.