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EB-5 Program

Understanding the EB-5 Program – A Path to U.S. Permanent Residency and Citizenship

VWB Blog 8 months ago 28

The EB-5 Immigrant Investor Program offers a path to U.S. permanent residency and citizenship for foreign investors and their families. It is the American equivalence of “golden visa” programs used in many other countries.

EB-5 investors invest capital into projects that create jobs for Americans. The process takes several years but is worth the effort for investors and their family members.

EB-5 Investment Requirements

The EB-5 program requires you to invest a minimum of $800,000 into a new commercial enterprise (NCE). The NCE must create at least ten full-time jobs for U.S. workers, lasting at least two years. The NCE must create these jobs directly or indirectly, including those resulting from purchasing existing businesses. Indirect jobs must account for at least 50 percent of the induced jobs.

Depending on the type of investment you make, your job creation requirements will differ.

You can choose between a direct investment or a regional center investment. A direct investment is where you invest your capital in the NCE yourself. However, it is essential to note that your capital must be “at-risk,” meaning that you could lose some or all of the money you invested in the NCE. If you are using gifts or loans for your capital, you must prove that they came from legal sources and were given or lent by you. You must also provide documentation of any civil or criminal violations or convictions you have incurred in the past 15 years.

Because Regional Centers provide a more streamlined and straightforward process than direct investments, they are the preferred investment method for most EB-5 investors. These are publicly or private businesses that the U.S. has endorsed immigration and Citizenship services to promote economic growth in a specific area of the country.

You can invest in various projects within an EB-5 Regional Center, including hotels, construction and development of real estate, purchasing or redeveloping existing troubled businesses, and agriculture. However, it is critical that you perform due diligence before investing in a project and that you seek guidance from an experienced EB-5 attorney to ensure you are following all of the applicable rules and regulations.

You and your family members can live, work, study, and seek all the advantages of American citizenship thanks to the EB-5 investment visa. One of the benefits of the EB-5 program is that your kids can benefit from a top-notch education in the public school system of the United States, which will enable them to develop their abilities and thrive in whatever they decide to pursue.

EB-5 Regional Centers

An EB-5 regional center is a public or private economic unit promoting economic growth and job creation. These entities can offer a reduced minimum investment amount for investors wishing to invest in rural or high-unemployment areas or an expedited processing option for those investing in infrastructure projects.

Investors choosing to use a regional center can also enjoy more flexible job creation requirements than those who manage their investment directly. It is because when an investor invests in a regional center, they can count indirect, induced, and other jobs created by the project toward their ten required EB-5 job creation positions. In contrast, direct investments may only count the direct jobs they create as part of their business enterprise.

The EB-5 program requires that a foreign national invests at least $800,000 in a new commercial enterprise and creates ten full-time jobs for qualified U.S. workers within two years of becoming a conditional permanent resident. The law defines a new commercial enterprise as any for-profit business or corporation. The investment must create a new business to expand domestic employment opportunities and improve the economy.

To apply for an EB-5 visa, the investor must submit Form I-526E to United States Citizenship and Immigration Services (USCIS). This application demonstrates that they made an eligible investment in a qualifying new commercial enterprise, defined as any for-profit business or corporation. A successful I-526 petition leads to the issuance of an EB-5 immigrant visa.

Those seeking an EB-5 visa should work with an experienced attorney to ensure they meet the requisite investment amounts. They should also carefully vet the regional centers and projects they are considering to understand their history of success, past legal issues, and current management. Finally, they should verify that the funds they are investing are traceable from a lawful source.

The EB-5 process can be complex and time-consuming, primarily when investors work with a regional center. To minimize the risk of delays, investors need to plan accordingly. It includes obtaining their investor visas well before they need to enter the United States, as it can take up to two years from the date USCIS approves an I-526 petition for a green card.

EB-5 Direct Investments

In a direct investment, an investor bypasses the regional center and instead invests directly into a new or existing commercial enterprise. Investors can either take on a managerial role or purchase equity in an enterprise. This investment gives the investor more operative and creative freedom than investing in a regional center project. However, it also has more stringent requirements regarding job creation. The investor must demonstrate that at least ten full-time jobs for qualified workers will be created due to the investment.

The capital used in a direct investment must come from lawful sources. Gifts are a valid source of funds, but the donor must provide proper documentation to ensure that the donated money follows the EB-5 program’s regulations. If the investor uses a loan as part of their investment, they must demonstrate that the debt is personal and solely their responsibility. In addition, all EB-5 funds must remain “at risk” until the investor receives unconditional permanent resident status.

Investors in EB-5 visas must demonstrate that their investments generate at least ten full-time positions for qualified people. Qualifying employees include citizens of the United States, lawful permanent residents, and immigrants authorized to work in the country. The job creation requirement does not include indirect or induced jobs. These jobs are created when the workers spend their wages at local businesses.

Direct investments are still available while the EB-5 regional center program is suspended. Many investors choose the EB-5 route because of the long wait times associated with other employment-based visa programs or because it removes the need to worry about consistent visa renewals. In the future, there will likely be changes to the EB-5 program. The minimum investment amount will increase, and targeted employment areas will be reevaluated.

The EB-5 program is complex, and it’s vital to have experienced immigration lawyers on your side.

EB-5 Job Creation Requirements

Whether investing directly or through a regional center, job creation is the most crucial component of any EB-5 petition. The program requires that the investment create at least ten full-time jobs for U.S. workers. Ideally, those jobs will be new but can also be preserved in existing positions. Moreover, the jobs created must be permanent and full-time, not seasonal, temporary, or transient. Indirect and induced jobs can count toward the total number of jobs needed as long as the investor can demonstrate that these jobs were created by the investment and not elsewhere in the economy.

The jobs created must be full-time, and they must be created within two years of the EB-5 investment. The investors cannot be counted as job creators, but they can have their family members employed by the business as qualifying employees. Other employees can be hired to meet the ten job requirements, including U.S. citizens, permanent residents, and foreign nationals who are lawful nonimmigrants (including refugees, asylees, asylum seekers, and other individuals with special authorization to work in the United States).

For an EB-5 investment to qualify, the investor must be “at risk.” It means that any entity or individual cannot guarantee the invested funds, and the immigrant must have personally put their capital into the business. In addition, the investors must manage the business, either as a principal or limited partner.

Job creation requirements are more relaxed when investing in a troubled business. The company would then need to have been in operation for two years before receiving the EB-5 investment and would also need to have suffered a net loss of at least 20% of its net worth in the 12 or 24 months before the investor filed their EB-5 application.

The jobs created by the EB-5 investment must be “direct” jobs, which means that the EB-5 business in question hires people to do the work for which they were recruited. However, job-sharing arrangements are acceptable when two or more employees share the hours of a single full-time position.

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