High net worth individuals who would like to immigrate to the US on a permanent basis may qualify 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 deeper.
The basic requirements are that the investor be in the process of investing or have already invested US$1,000,000 (US$500,000 in some situations, explained below) in a new commercial enterprise and create at least 10 new full time jobs in 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 must file an application to remove 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 establish 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 at risk and committed to the investment business.
While the investment is generally cash, that is not required. Equipment and inventory to be used in the commercial enterprise can be counted towards the investment amount. Loan proceeds can also be used as long as the loan is secured by the investor personally or by assets that the investor owns and that are not being used in the investment business.
Funding the investment through loans secured by assets adds risk to the process, and the approach must be thoroughly reviewed by a licensed and experienced attorney before moving forward. 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 lawfully.
Additionally, gifted funds are acceptable as long as it can be established that the giver has freely given the funds and is not receiving repayment or anything else of value in return for the gift. Gifted funds do not have to come from a family relationship.
Exceptions To The US$1,000,000 EB-5 Investment Requirement
In some situations, US$500,000 can be sufficient to qualify an investor for the EB-5 program. One approach is by setting up the investment business in an economically challenged area. For example, rural areas with less than 20,000 in population qualify as a Targeted Employment Area.
Another approach is for the investor to show that the area in which the investor will operate the investment enterprise is one of high unemployment, 150% of the national average. The data provided to establish sufficient unemployment must come from government sources.
The other approach is to invest with a Regional Center. A Regional Center is an investment company authorized by USCIS and other government entities to provide investment options to investors hoping for permanent residence through EB-5. The list of approved 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 careful to consider the experience and success rate of the company before investing. Also, an investor should work with investment, tax and other advisers to review the various 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 guarantees the return of the investment. The dollars invested must be at risk.
There are significant advantages to investing with a Regional Center, and we generally encourage this approach for these reasons. One, as mentioned 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 allow for the consideration of the 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.
Garry L. Davis, managing attorney for Davis & Associates, a boutique 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 (214) 999-1942