EB-5 Direct Investment Information
The U.S. EB-5 Immigrant Investor Program (“EB-5 Program”) is the most flexible immigration program in the world. The U.S. has no requirements with respect to age, business training and experience or language skills. Permanent residents need not be continuously and physically present in the United States, and they can maintain business and professional relations in their country of origin.
Permanent resident status carries with it many benefits of which investors would want to avail themselves. A Green Card holder can petition for permanent resident status for his spouse and children under the age of 21. It removes employment restrictions, allowing the investor to work in any field he desires, as well as making him eligible for social security upon retirement. It makes international travel simpler. It allows foreign national homeowners to apply for homestead exemption and realize significant tax savings. Essentially, becoming a permanent resident affords the Green Card holder all the rights and benefits of American citizenship except voting rights. If the investor desires, permanent residents may apply for naturalization (citizenship) after five years.
The EB-5 Regular Program (Individual Investment)
The Regular Program has three basic requirements: (1) investment in a “new commercial enterprise” (2) of at least $1,000,000 (or $500,000 in certain cases, discussed below) (3) that results in the creation of at least 10 new full-time jobs. Additionally, the investor is required to take an active enough role in the business that he has at least a policy-making position.
The $1,000,000 EB-5 Direct Investor Visa
To qualify for this visa, an investor must contribute at least $1,000,000 in capital to the business in the form of cash, equipment, inventory, and other tangible property. Loans do not qualify unless they are secured by assets owned by the investor (not the business), who is personally and primarily liable for the debts.
The investment must also be in a “new commercial enterprise.” Although the investor is free to invest in a company that was only very recently started or establish his own, any business formed after November 29, 1990 qualifies. Furthermore, the prospective immigrant may choose to invest in a business that has been substantially restructured since November 29, 1990, so long as that restructuring did not create a net loss of employment. Businesses substantially expanded after November 29, 1990 qualify if their net worth or employment have increased by at least 40%. If the investor is concerned about the business reaching this 40% minimum requirement, he can include the capital contributed by other investors, even if they are already permanent residents or citizens. Finally, there is no limit to the number of EB5 direct investment partners on any given new commercial venture, as long as each $1,000,000.00 investment results in the creation of at least 10 new full-time jobs. Therefore a group of foreign investors are allowed to partner in a new commercial venture.
The final requirement is the creation of 10 new full-time jobs for U.S. citizens or immigrant workers (not including the investor and his immediate family). These jobs must be directly created as a result of the investment. The only exception to this requirement is if the company is considered a “troubled business,” one experiencing a net loss for one or two years of more than 20% of its net worth.
The $500,000 EB-5 Direct Investor Visa
The Regular Program also includes a $500,000 investment option, provided the investment is in a “targeted employment area.”
There are two different qualifications for targeted employment areas. Investors can either choose to create jobs in a rural area, which can be anywhere outside of a city with a population of 20,000 or more or outside of a metropolitan statistical area, or they can invest in a business in an area with high unemployment (at least 150% the national average).
The advantages of pursuing a Direct EB-5 Project can be summarized as follows:
A business set up as a Direct EB-5 project will have a significantly higher chance of approval than most Regional Centers.
You can move forward with your project more quickly and avoid delays.
Applications of individual investors can be submitted to USCIS more expediently and thus investors will not have to wait as long for approval.
The set up of an EB-5 Direct Project requires less work than that of a Regional Center.
Disclaimer: In servicing EB-5 investors and the US companies seeking capital from EB-5 investors, Global Alliance Securities acts as an investment banker and securities broker. It does not provide legal advice or immigration services. At investor’s request, we will cooperate with investor’s legal counsel by supplying, upon investor’s authorization, certain business documents related to the investment that might be necessary for the EB-5 immigration requirements. We, however, encourage EB-5 investors to seek legal representation with respect to their immigration needs, independently.