The EB-5 Immigrant Investor Program was enacted in 1990 as an attempt to use foreign investment capital to boost the U.S. economy and create more jobs for U.S. workers. The program offers foreign nationals the chance to receive a U.S. green card in exchange for a qualifying investment in an EB-5 project. Despite being one of the fastest and easiest ways for foreign nationals to permanently relocate to the United States, the program is fairly complex and has several requirements that all applicants must meet. Although there is a lot of publicly available information regarding the EB-5 program, it can still be difficult for investors to find the information they need. In an attempt to help any prospective investors, here are answers to some of the most frequently asked questions about the EB-5 program.
1. What is an EB-5 visa?
An EB-5 visa is a U.S. immigrant visa, also known as a “green card,” which grants the holder permanent resident status. Most U.S. green cards are either family-based visas or employment-based visas. The EB-5 visa is an employment-based visa with eligibility determined by a qualifying investment in a new commercial enterprise (NCE) and the creation of 10 new full-time jobs for U.S. workers.
2. Who Commonly Applies for EB-5 Visas?
EB-5 applicants are individual investors. However, they may include their spouse and any unmarried children younger than 21 on their application so that they too may apply for for U.S. green cards.
3. What Are the Requirements of an EB-5 Visa?
There are many requirements that each investor must satisfy on their EB-5 petition. To begin the process, each investor must complete an I-526 petition on which they demonstrate that they have invested the minimum amount of $1.8 million, or $900,000 in a targeted employment area (TEA), and show how their investment will lead to the creation of 10 new full-time jobs for U.S. workers. If their petition is approved, they may then apply for conditional permanent resident status for two years. At the end of this period, they must complete an I-829 petition, where they show that they maintained their investment and fulfilled the job creation requirement. When this petition is approved, the conditions are removed, granting the investor unconditional permanent resident status in the United States.
4. What is the EB-5 Regional Center Program?
The EB-5 Regional Center Program allows EB-5 investors to pool their investment capital to maximize the economic impact in a specific geographical region. To qualify as an EB-5 regional center, an entity must complete an I-924 petition and be approved by United States Citizenship and Immigration Services (USCIS).
5. Why Do Some Investors Choose to Invest Through a Regional Center?
Investing through an EB-5 regional center offers many advantages that make it a popular option for those planning an EB-5 investment. One of the main reasons investors choose to invest through a regional center is the relaxed job creation requirements. For a direct (non-regional center) investment, the 10 new full-time jobs must be direct hires of the NCE. However, if investing through a regional center, the investor can count both direct jobs and indirect jobs, such as jobs from the NCE’s external suppliers and service providers.
EB-5 regional centers are also more likely to select projects located in TEAs, thus qualifying for the lower minimum investment amount. This can be appealing to prospective investors who do not have enough capital to meet the $1.8 million minimum requirement but still wish to complete an EB5 investment.
6. How is Job Creation Shown in the Regional Center Program?
Generally, USCIS accepts input–output models that predict the job creation and economic impact of an investment. Investors can also provide business models and hiring plans to demonstrate how they plan to meet the job creation requirement.
7. Can EB-5 Investors Receive Their Investment Capital Back?
The hope for any investment is for it to result in an overall gain, including an EB-5 investment. However, an EB-5 investment cannot include any guarantee that the investor will have their principal returned to them or any guarantee of profit from the initial investment. This is due to the “at risk” requirement, which states that the investment capital must incur the risk of loss as well as the possibility of gain.
8. How Long Does It Take to Complete the EB-5 Process?
There are several factors that can affect the length of an investor’s EB-5 journey. How much preparation the investor has done, USCIS processing times, and visa availability are all factors that can cause delays in the process. There are also uncontrollable factors like a global pandemic that can cause unplanned wait times in the process.
9. What is the EB-5 Visa Backlog and How Are Investors Impacted?
Each fiscal year, there are approximately 10,000 visas allocated to the EB-5 Immigrant Investor Program. These are then divided up with limits for each country. Whenever the demand for EB-5 visas is greater than the number of visas available, there is a backlog. As of November 2020, China and Vietnam are the only countries subject to an EB-5 visa backlog.
When a backlog occurs, applicants are subject to a waiting period after their I-526 petition is approved. Applicants’ wait times vary based on the number of visas available and the number of applicants ahead of them in the EB-5 visa queue. Investors planning to include their children on their application should carefully plan their EB-5 investment to make sure their child does not age out during the waiting period.