Thousands of foreign nationals interested in relocating to the United States have chosen to participate in the EB-5 investment program, which offers a relatively fast and straightforward way to obtain U.S. green cards. Immigrants have long recognized the EB-5 visa’s many advantages over other immigration options, and the EB-5 industry has created thousands of jobs and injected billions of dollars into U.S. businesses. Over 30 years after its inception in 1990, the EB-5 program remains popular and beneficial to the U.S. economy.
United States Citizenship and Immigration Services (USCIS) regulates the EB-5 industry and ensures that all immigrant investors follow the applicable guidelines. The agency’s many requirements for EB-5 investors include complying with the minimum investment threshold, choosing an eligible business, and creating jobs. In this article, we examine how EB-5 investors can comply with these three requirements.
The EB-5 Investment Threshold
As of June 2021, EB-5 investors must inject at least $1,000,000 into eligible projects. Previously, the standard minimum amount had been $1,800,000, but the repeal of the EB-5 Modernization Rule lowered the threshold.
In addition, foreign nationals are incentivized to invest in businesses located in targeted employment areas (TEAs). These areas, which are either rural or have exceptionally high unemployment, have a great need for economic development. EB-5 investments in TEA projects need to meet a reduced threshold of only $500,000. (Under the Modernization Rule, this amount was $900,000.)
USCIS or the Department of State (DOS) might take action to raise the minimum thresholds once more, so interested foreign nationals should act quickly to invest at the lowered amount of $500,000.
An Eligible U.S. Business
The EB-5 program requires that investors choose new commercial enterprises (NCEs) or troubled businesses. An NCE is any for-profit enterprise that has been created or restructured after November 29, 1990. The vast majority of EB-5 investors choose NCEs. In contrast, a business is considered troubled if it has experienced a net loss of 20% in the past 12 or 24 months.
When selecting an EB-5 investment opportunity, foreign nationals should take care to ensure that the project is trustworthy and can comply with all USCIS regulations. To this end, they should do research on the project’s management team, especially the individuals in charge of managing the EB-5 investment funds.
Every EB5 investment must create at least 10 jobs for U.S. workers. Calculating the created jobs is straightforward for direct EB-5 projects, which simply need to count the positions listed on their payroll. Regional center-sponsored projects, however, can also count indirect and induced jobs, which result from the project’s economic impact on the area. These jobs are calculated with an economist’s assistance.
EB-5 investors need to comply with other requirements besides these three basic criteria. Working with immigration counsel and with EB-5 consultants can be invaluable for foreign nationals interested in securing EB-5 visas for themselves and their families.