The 7 Steps To Take Before You Invest In EB-5

WRITTEN BY

EB-5 Insider Team

A group of professionals with years of experience helping people immigrate to the US

Note: This article is for informational purposes only. We are not providing legal advice or selling securities. The articles and content on this site are of a general informational nature only and should not be relied upon for individual circumstances.

If you’re drawn to the idea of the American Dream, you’ll know that the immigration process isn’t easy. Obtaining a green card and permanent residency can take years. If you’re a high-net-worth individual, you can take advantage of the EB-5 Immigration Investor Program. Residency through investment is one of the most efficient ways to obtain a green card, with the option to also obtain residency for your spouse and any qualifying dependents.

The EB-5 Immigrant Investor Program was launched in 1990, allowing foreign nationals to obtain permanent residency in the U.S. by investing capital in projects to create at least 10 full-time jobs for qualifying U.S. workers. You’ll need to make a minimum investment of $800,000 in a project in a Targeted Employment Area (TEA) area or $1,050,00 in an area that does not qualify as TEA.

We’re sharing the 7 steps you should take in your journey to obtaining an EB-5 visa before investing in your chosen project and submitting your I-526E petition.

1. Starting the EB-5 Process

The first step in the visa process is to do your research to determine whether the EB-5 visa is the right choice for you. Several different visas will facilitate permanent residence in the United States. You can consult with an immigration attorney to determine whether the EB-5 visa is the right one for you and your circumstances.

There may be other pathways that will make it easier for you to obtain a green card. An employer sponsorship or family relationship may provide an easier or more efficient way of getting permanent residency. An immigration attorney will help you explore your options and advise on the EB-5 process, as it is considered one of the most complicated visas to acquire.

You’ll need to ensure that you’ll be classified as an accredited investor by the U.S. Securities and Exchange Commission. It’ll require you to have a net worth of at least $1,000,000 or an annual income of at least $200,000 per year for the last two years if you’re single. If you’re married, you’ll need an annual income of $300,000 in each of the last two years.

It’s also worth considering the impact of visa retrogression. This situation occurs when there is more demand for EB-5 visas than the annual per-country limit. Typically, only 10,000 EB-5 visas are available every fiscal year, including for spouses and qualifying dependents.

The USCIS has a per-country limit on available EB-5 visas to make the process as equitable as possible. Countries like China have exceptionally high demand, and it may take several years for your I-526/I-526E petition to be processed. You may be able to avoid this backlog or speed up the process by investing in a TEA project. Regulation changes introduced in 2022 mean that at least 35% of EB-5 visas are set aside for investors who provide funding for TEA projects.

2. Review EB-5 Requirements

You’ll need to determine whether you meet the basic requirements for an EB-5 visa before you start the process. An immigration attorney can help you review these requirements and determine if they work for your circumstances.

EB-5 requirements include:

  • Being an accredited investor with a net worth of at least $1,000,000 or an annual income of at least $200,000.
  • A capital investment of either $800,000 or $1,050,000, depending on whether the project is in a Targeted Employment Area.
  • The capital invested in the EB-5 project must be from a lawful source with evidence to support the source and path of funds.
  • The EB-5 investment must create at least 10 full-time, permanent jobs for qualified U.S. workers for at least two years.
  • If the applicant invests in a new commercial enterprise, they’ll need to be involved in day-to-day management or policy making.

Although the standard EB-5 investment is a minimum of $1,050,000, preferential treatment is given for applications involving investment in targeted employment areas. They have a minimum investment of $800,000 and are highly sought by the government as they target rural areas or those with a high unemployment rate, at least 150% of the U.S. national average.

The EB-5 Immigrant Investor Program Modernization regulation, effective from November 2019, changed how TEAs are designated. The Department of Homeland Security now has the exclusive authority to delegate areas as TEAs, a practice previously reserved at a state level.

Potential investors need to provide evidence that the EB-5 project location meets the definition of a TEA to qualify for the lower minimum investment threshold of $800,000.

3. Projects

Once you’ve determined that the EB-5 visa is right for you, it’s time to choose the project you want to invest in. There are two main types of EB-5 projects that investors can choose from.

Directly Invest in a New Commercial Enterprise

You can make a direct investment in a new commercial enterprise (NCE), where you’ll be required to maintain an active role with day-to-day management responsibilities. This EB-5 project is ideal for investors with previous entrepreneurial experience and who want to continue running the business after they obtain their permanent residency. The minimum investment for this project is $1,050,000 – unless it qualifies as a TEA.

Invest Through a Regional Center

Most EB-5 visa applicants decide to make their investments through a regional center. These entities are created to manage and invest EB-5 capital on behalf of multiple investors. These projects accept funding from more than one investor and typically create larger projects that have a higher likelihood of success. These regional centers are usually located in targeted employment areas and qualify for the lower minimum investment rate.

One of the benefits of choosing a regional center is that it’s easier to reach the job creation threshold of at least 10 full-time jobs. While only direct jobs count for NCEs, regional center investors can also include indirect and induced jobs towards their job creation total. Indirect job creation comes from the wider financial implications of the project, including employees spending their earnings in the local area. An economic impact study will need to be conducted by an economist or financial professional to determine the number of indirect or induced jobs created.

Investing through a regional center means you’ll submit an I-526E form. The regional center itself will also submit documentation to the USCIS with information on its project. You’ll need the project number from the regional center to include in your I-526E form. I-526E forms typically have a faster turnaround time than their I-526 equivalents, making it easier to obtain a green card.

A regional center project is often the most suitable choice for investors as they’ll take on only limited management responsibilities, usually voting on board-level decisions.

Unless you plan on running a company long-term after you acquire permanent resident status, it is usually easier to invest through a regional center. It’s also easier to prove that you’ve met the conditions of your EB-5 visa to obtain permanent residency at the end of the two-year process.

4. Finding an Attorney

You might research the EB-5 process independently, but it’s recommended to have an immigration attorney on board before you start the application process. They have the skills and experience to help you navigate the EB-5 process and avoid making common mistakes. Their experience can streamline the EB-5 application process to help you secure permanent residency and eventual U.S. citizenship.

An immigration attorney will ensure that your paperwork is submitted on time and that all fees are paid to avoid unnecessary delays to your application process. You’ll be expected to provide an extensive amount of documentation, including keeping detailed records throughout your EB-5 visa process. An immigration attorney will help you stay on top of this and can also advise on the best regional center project or commercial enterprise developer to work with.

Do your due diligence in choosing an immigration attorney with experience working with EB-5 investors and who is familiar with the process. Crucially, they’ll need to have experience in providing and sourcing documentation to prove the source and path of funds for your investment. Ideally, your immigration attorney should have a track record of successful applications for EB-5 visas.

5. Securing Your Funding Source

Determining your funding source is crucial to streamlining the process of obtaining your EB-5 visa. It’s the hurdle that most EB-5 investors struggle with, as USCIS requires extensive documentation to prove the legality of your funds and the path of funds. You’ll need to be able to demonstrate where your investment capital and administrative fees have come from and how they have been obtained.

You’ll want to consider the different sources of funds you can use for your EB-5 investment. An immigration attorney will help you determine which is best for your circumstances, including advising on what type of documentation you’ll need to provide.

Income

One of the most common sources for high-net-worth individuals is their employment earnings. It’s also one of the easiest to prove with employment contracts, professional licenses, and proof or confirmation of employment. An EB-5 investor will need to provide multiple years of tax returns to prove their employment earnings.

The number of years of tax returns you’ll have to provide will depend on your earnings. If your previous year’s earnings are $1,000,000 or more, that year’s tax return will usually be enough to establish that your EB-5 investment is coming solely from your earnings.

Sale of a Business

If you’re planning on using an EB-5 visa to gain U.S. citizenship through investment, you might decide to sell an existing business. You’ll need to provide documentation relating to your business, including establishing its lawful nature. The company earnings will need to be supported by documentary evidence.

Gift from a Family Member

It’s not uncommon for EB-5 investors to receive a financial gift from a family member to fund their application. You’ll need to register the financial gift with the relevant tax authorities or provide a report relating to the source of income used by the family member to provide the gift.

Real Estate Sale

If you’re planning to permanently reside in the United States, you may decide to sell your property or real estate investments to fund your investment. Similarly to other sources of funds, you’ll need to provide detailed documentation, including bank records demonstrating the deposit of the sale earnings and that your property was lawfully owned and sold.

6. Providing Proof of Funds

When you submit your I-526/I-526E application, the USCIS will want to see the source of your funds and the path of the funds. This process may require you to submit an extensive amount of documentation, ranging from deeds of sale to employment records and bank transactions. If you fail to provide enough evidence, your application may be denied.

The USCIS takes anti-money laundering policies seriously and will work to thoroughly verify the source of an investor’s funds, including for their administrative fees. If your documentation is in another language other than English, they’ll need to be professionally translated and closely checked to ensure their accuracy.

7. Filing Your I-526E Petition

Once you’ve completed the steps above, it’s time to make your investment and file your I-526/I-526E petition to take the first steps to secure permanent residency through investment. You’ll submit an I-526 if you’re choosing a direct investment or an I-526E if you’re working with a regional center.

You’ll receive a receipt notice when the USCIS receives your petition. It’ll also include your priority date, which is an estimate of when you can expect to be allocated your EB-5 visa.

Become a U.S. Citizen Through Investment with an EB-5 Visa

EB-5 Insider is your partner on the path to U.S. residency through investment. The EB-5 visa is the fastest route for foreigners seeking U.S. citizenship or permanent residency through investment. It is one of the most attractive ‘golden visa’ programs in the world and has undergone extensive regulatory change in recent years to speed up the processing time of applications.

You can obtain a permanent U.S. green card for yourself, your spouse, and any unmarried children under 21 years of age for an investment of $800,000. The EB-5 visa program allows you to work, live, and start a business anywhere in the United States. Start the process of applying for an EB-5 visa today, or contact our team for more information.

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