Selecting An EB-5 Investment? Five Things You Need To Know
There are a few avenues you can take if you want to immigrate to the United States. You can marry a U.S. citizen (or have a close family member sponsor you), have a company sponsor your green card for a unique skill set, or invest in the United States. The EB-5 category is for investors who are willing to put $1.8 million into a business in a nontargeted employment area or $900,000 into a targeted employment area. The plan must create at least 10 permanent full-time jobs for qualified U.S. workers.
If you have the means, this route can be one of the best ways to live in the United States. The trick is selecting a profitable investment that will satisfy U.S. Citizenship and Immigration Services (USCIS) requirements. Here are five things you should know before you try to obtain an EB-5.
1. There Are Two Types of Investments USCIS Permits
If you’re looking for an EB-5-based green card, you should know there are two types of investments that USCIS allows: direct and indirect. Each has its advantages and disadvantages.
With the direct investment route, you are in full control of the business as an investor and manager. For example, you might agree to spend $1.8 million to build and run a factory producing widgets somewhere in the U.S. As long as your new company employs at least 10 people and meets the capital requirements, USCIS will approve your petition.
The indirect route is different. EB-5 centers pool resources from multiple investors to do a larger project. If you agree to put enough money in, the plan itself satisfies the requirements for USCIS. You take a passive investor role and are not responsible for running the business.
2. Each Option Has A Different Risk Vs. Reward Calibration
Think of these two options as mutual funds versus stocks. With an individual stock (the direct route), you can either lose it all or make it big. However, with mutual funds, since your money goes into many different stocks as part of a managed portfolio, you assume less risk but typically receive less reward.
Similarly, EB-5 center investments are not usually for making the most money possible. They’re more about satisfying the requirements for immigration, so some of these projects may have lower returns than other investment opportunities.
3. Investment Amounts Will Become Higher
As part of the changes that USCIS implemented as of November 21, 2019, investment amounts will change to keep track of inflation every five years. Therefore, if you are considering an EB-5 investment, you would likely want to do so before the limits recalibrate, and you have to put in even more money.
4. Look For EB-5 Center Projects With At Least One I-526 Approval
Filing Form I-526, “Immigration Petition by Alien Entrepreneur,” is the first step in the EB-5 process. In this form, you must document the project and your source of capital, including how many people the business will employ, how it will operate and more questions along those lines.
With EB-5 centers, the questions regarding the project itself remain constant across all applications. Therefore, when USCIS approves one I-526 request, they tend to refer to that approval for subsequent applications. Some centers file an exemplar I-526 to give future investors confidence that the project will withstand USCIS scrutiny.
5. Real Estate Projects Have A Distinct Edge
Many EB-5 centers work with real estate projects because they have an edge with USCIS. Construction requires significant investment and lots of jobs, both of which are what USCIS likes to see. The other advantage of building development is that as long as you spend the budget, you’ll create the jobs. If you go the direct investment route, you might put $2 million into the business, but if you don’t bring in enough revenue to hire 10 employees for at least two years, you could have immigration issues.
EB-5 Investors Have Lots Of Options
Fortunately, EB-5 investors have many options. If you want the least amount of risk, a reasonable return on investment and a higher chance of obtaining your green card, consider investing in an EB-5 center project. However, if you’re willing to take on more risk for a more significant ROI, you can always invest in your own endeavor.
The choice is yours. With the right guidance, though, both paths will lead to a green card in the end.
Published: 10 July 2020