What is EB-5?
The EB-5 Program, also known as the Immigrant Investor Program is administered by the U.S. Citizenship & Immigration Services (USCIS). Under this program, investors and their spouses and unmarried children under 21 are eligible to apply for a green card (permanent residence) if they invest a minimum of $900,000 in a commercial enterprise in the United States that creates 10 permanent full-time jobs for qualified U.S. workers. Congress created the EB-5 Program in 1990 to stimulate the U.S. economic growth. In 1992, Congress created the Immigrant Investor Program (also known as the Regional Center Program), which sets aside EB-5 visas for participants who invest in commercial enterprises associated with regional centers approved by USCIS for the purpose of promoting economic growth.
EB-5 Process & Eligibility Requirements
These are the basic steps to obtain permanent residency (Green Card). Note: When it comes to visa wait times, applicants from different countries experience varying wait times, depending on the country of origin and application backlogs. The information below is an example only.
1) The applicant must find an EB-5 project to invest in, generally a new commercial enterprise or regional center project. Migration agents often help EB-5 investors find a project that best suits their needs. Additionally, Regional Centers will often advertise their EB-5 projects that are available for investor funding.
2) After choosing a project, the applicant must make the required capital investment of $1.8 million, or a minimum of $900,000 if the project is situated in a Targeted Employment Area (TEA), which is an economically disadvantaged area. An immigration attorney provides proof of this investment by filing an I-526 petition with USCIS who then informs applicants (typically after 12 to 18 months) whether their I-526 petition has been accepted. If your I-526 is denied, most regional centers will refund your investment money.
3) The applicant is eligible to become a U.S. resident once their I-526 petition has been approved by USCIS. An immigrant visa is issued, on average, in six to twelve months. During the two-year conditional residency period, the investor cannot remain outside of the U.S. for more than one year without obtaining a re-entry permit.
4) The final step is for the applicant to become an unconditional permanent resident by removing their two-year conditional status. This is accomplished by submitting an I-829 petition to USCIS 90 days prior to the second anniversary of the permanent green card 6 to 8 months after the I-829 has been submitted. The investor, their spouse, and their unmarried children under the age of 21 can then permanently live and work in the United States and have the option to become U.S. citizens after a five-year period from the date they received their initial conditional residency.
H-1B to EB-5 Visa
If you currently have a H-1B Visa, you will be able to apply for an EB-5 Visa, which can be done while you are working and living in the United States. You would continue working for your current employer under the H1-B Visa.
The EB-5 application will not affect your H-1B status whatsoever, provided you remain in H-1B status during the processing of the EB-5. However, you need to take into consideration how much time is remaining on your H-1B Visa and and current I-526 processing times. If your H-1B expires before you are issued an EB-5 Visa, you may have to leave the U.S. for a period of time.
Benefits of EB-5 Visa: You are making a financial investment into an EB-5 real estate project, with returns. You have more control, unlike H-1B as you have to rely on your employer. EB-5 allows you to work and live wherever you want, and work for whatever company you want.
Before you move forward, it is highly recommended you contact an experienced immigration attorney, such as our legal team, who provide investors and their families sound investment immigration advice.
What is an EB-5 Regional Center?
An EB-5 Regional Center is a service agent organization designated by the United States Citizenship and Immigration Services (USCIS) that sponsors capital investment projects for investment by EB-5 investors and developers looking to complete a project under the EB-5 Program. Also known as "Immigrant Investor Program", this program has become an important source of investment for development projects in the U.S. whose purpose is to create jobs and growth in a Targeted Employment Area (TEA). The EB-5 Program is designed to allow foreign investors to gain permanent residence (a “green card”) in the United States. To qualify for the EB-5 Program, they can invest directly in a job-creating project, or through a USCIS approved Regional Center.
Most EB-5 investors and developers choose the Regional Center route because it relieves the investor from managing their EB-5 investment. For the investor, this means they do not have to live near their investment and can live and work in any state. For the developer it means an experienced regional center staff can act in a managerial role such as finding investors, raising capital, handling legal matters, and filing the necessary paperwork and I-526 petitions. If your project is to construct apartments or mixed-use real estate, you will need to partner with a regional center because your project is not likely to create enough direct jobs to qualify for EB-5. There are other huge benefits of partnering with a Regional Center that you can learn about below, "Benefits of EB-5 Regional Center".
Benefits of EB5 Regional Center
Starting your own regional center is a long and complicated process, which is the reason most choose to partner with an existing regional center. If you are experienced with EB-5 then you may choose to operate your project through a Regional Center and manage the project yourself. Or, if you do not have EB-5 experience then a Regional Center can act in a managerial role such as finding investors, raising capital, handling legal matters, and filing the necessary paperwork and I-526 petitions, etc.
There are significant benefits including marketing your project through an EB-5 Regional Center. The biggest challenge is finding investors. If you do not have this experience, it could be very difficult to break into the market on your own. If your project is to construct apartments or mixed-use real estate, you will need to partner with a regional center because your project is not likely to create enough direct jobs to qualify for EB-5. Regional Centers are allowed to claim credit for indirect as well as direct job creation, a major benefit to you. Other benefits include:
- No sponsor is needed
- No minimum education or business management requirement
- Investment capital can come from any lawful source, including a loan or gift
- There is no quota waiting list for the EB-5 program
- Job creation requirement is satisfied by counting both direct and indirect jobs
- A portion of the annual number of EB-5 Green Cards are reserved for qualifying immigrants who participate in an EB-5 Regional Center project
- Investors are not required to live in the place of investment; they can live and work anywhere in the U.S.
- Great for those not interested in day-to-day management of their project/investment.
EB-5 Administrative Fees
The EB-5 immigrant investor plan may put you on the fast track to becoming a permanent resident, but going through the whole process is no easy task. Developers, investors and lawyers who need assistance for the organization and access of EB-5 regional centers, can rely on our expertise to navigate the requirements and various administrative fees of this program, as EB5AN is the primary vendor in this area.
Know Why You're Paying Fees
Some questions that commonly arise regarding the purpose and amount needed for fees include: What’s covered with these fees? Do my fees include agents’ commissions? Are there any fees that my project may be exempt from?
You can’t make investment decisions without knowing the answers to these questions. Compared to other markets around the world, there is more regulation and transparency in the US, but the system will only remain secure when there is adequate protection against mismanagement.
Fraud usually happens when the same actor/actors are responsible for managing both the project and the funds. Legislation is currently in the process to make third party supervision mandatory in order to prevent dishonesty.
Instead of paying the admin fees to the developer or regional center directly, they are occasionally placed in escrow. The escrow and capital are both released when the I-526 petition is filed. Sometimes the escrow is circumvented and admin fees are paid to the NCE.
There is still little regulation in the EB-5 program, so third-parties mostly just supervise capital contribution due to its importance for the job-creating enterprise (JCE), although they have overseen escrow release for some projects too. Since admin fees are paid as the finder’s fee or into the funds, they are not eligible for third-party administration.
What’s Covered by Administrative Fees?
What is a TEA (Targeted Employment Area)
An EB-5 project located in a targeted employment area (TEA) designation is advantageous for EB-5 investors. The required EB-5 investment amount is lowered to the minimum threshold if the EB-5 project is conducted in a TEA. In order to be designated as a TEA, the EB-5 project must be located in either a rural area or in a location that has high unemployment.
A TEA Rural Area must not be within a metropolitan statistical area as classified by the U.S. Office of Management and Budget. A rural area must also not be on the outskirts of a town or city that has a population of 20,000 residents or more as determined by the U.S. Census.
A TEA High Unemployment Area is an EB-5 project located in an area that must experience an unemployment rate of at least 150% of the U.S. national average. High unemployment areas must also be in a county or metropolitan statistical location that has a population of 20,000 residents or more.
TEA designation is requested within the EB-5 investor’s I-526 petition. If you invest in a regional center, they will let you know if their projects are located in a TEA. What is a regional center and its benefits?
New U.S. Government EB-5 Regulations as of November 21, 2019
On July 23, 2019 the U.S. government published a new regulation increasing EB-5 investment requirements. Effective November 21, 2019, the minimum TEA investment threshold increased from $500K to $900K, and non-TEA threshold from $1M to $1.8M. Any I-526 petitions filed before this date will be grandfathered under the current rules and lower investment amount of $500K for TEA (high-unemployment area) EB-5 projects.
Let us know if you have any questions or would like to discuss investing in an EB-5 project. Our mission at EB5 Coast To Coast is to help you achieve your investment and immigration goals as smoothly and efficiently as possible.
Click the image below to read a Forbes Magazine article that has additional information about the new EB-5 program criteria.
Read FAQ article: What is a TEA (Targed Unemployment Area?)