The EB-5 immigrant investor program is complicated and controversial. Today’s post is from guest blogger Robert Rogers, an experienced business immigration attorney from Miami Florida. He describes the key elements of the EB-5 program and what we need to know for 2016.
Congress made little if any progress on comprehensive immigration reform in 2015, and is unlikely to accomplish anything significant on this front in the presidential election year of 2016. It does appear, however, that they got one thing done: an extension of the popular EB-5 Immigrant Investor program through September 30, 2016.
The EB-5 program can be the quickest way for wealthy foreigners to obtain a green card and legal residency in the U.S. Those immigrants who apply and are approved to participate in the program must invest large sums of money in job-creating projects here. In exchange for this infusion of capital, the foreign investor – along with their spouse and children – can get immediate U.S. residency.
Some have criticized the program for essentially allowing rich individuals to buy their way into the U.S., and some have pointed to instances of fraud and abuse in the program. But there is no denying its attractiveness to those who can afford to participate, and with the extension of the program for another year, it will continue to be a significant source of foreign investment in the U.S.
If you are interested in the EB-5 visa program, here are five important things to know:
- It’s popular. Only 10,000 EB-5 visas can be issued every year. Until recently, this wasn’t a problem; in 2007, for example, only 700 visas were issued. But in 2014, for the first time ever, the 10,000 visa quota was met, was met again in 2015, and will likely be met yet again in 2016. Chinese investors are the overwhelming majority (85%) of EB-5 applicants, and many Chinese applicants now have to sit on a waiting list before their applications can be reviewed and processed. If you want to apply for fiscal year 2016, the time to act is now.
- It’s expensive. There are two ways to participate in the EB-5 program, each of which requires a large sum of money. You can directly invest a minimum of $1 million in a company that creates at least 10 U.S. jobs, though $500,000 is enough for a direct investment if it is in a company or project located in certain rural or economically depressed areas (“Targeted Employment Area”). Alternatively, you can invest $500,000 in an EB-5 “regional center” that allows immigrants to pool their money to be invested in various job-creating projects, companies, or developments. Approximately 95% of EB-5 visas granted are to those who participate in the more “affordable” regional center program.
- It needs to lead to U.S. jobs. The EB-5 program was created in order to spur foreign investment that would lead directly to the creation or saving of American jobs. As such, the business that the applicant is directly investing in must ultimately employ at least ten full-time workers (not counting independent contractors). Those who invest through a regional center can count “indirect” jobs created by businesses that service the main business as well as independent contractors, making satisfying this requirement a bit easier.
- It can involve a new or an existing business. For a direct investment applicant, the investment must be made in a new business or through buying a business that was established after November 29, 1990. For the purchase of an existing business to qualify for the EB-5 program, the investor needs to increase either the number of employees or the net worth of the business by at least 40%.
- It’s complicated. Because of concerns about fraud and abuse, the EB-5 application process is extremely burdensome and complicated. The government will want to verify the legitimacy of the investment, the promised employment impact, and the source of the funds to be invested, among other things. Applicants need to assemble voluminous records and documentation in order to prove that the capital being invested comes from a “legitimate source” and that it was “obtained through lawful means.” Given the complexities of the EB-5 visa application process and the government’s thorough vetting of foreign investors seeking such a coveted and scrutinized path to U.S. residency, it is vital that immigrant investors work with an experienced immigration lawyer to give their application the best shot at being approved.
Robert Rogers practices Immigration Law with an office in Miami, Florida. He has extensive experience assisting clients on international business ventures along with helping foreigners with their immigration needs.