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The EB-5 program was developed to encourage foreign
investment in the United States in order to stimulate the
local economy and provide jobs to United States residents
and citizens. It provides permanent residency (green card)
to those who invest the required amount of money and meet
the remaining conditions of the program.
The initial application is processed in 3 to 12 months. If
approved, the applicant is granted conditional permanent
residency for a period of 2 years. Toward the end of the two
year period, the applicant may file an application to
convert the conditional residency to a permanent status.
PROGRAMS AVAILABLE
The EB-5 program offers three different investment vehicles:
- TEA (Targeted Employment Area) or RA (Rural Area).
The investment must be made in an area that is
determined to be economically depressed (TEA) or within
a specified rural area (RA). The investment threshold is
$500,000 per investor.
- Outside TEA or RA. This investment is made in any
area outside a TEA or RA area. However, the investment
threshold is $1 million per investor.
- Regional Center Program. This investment is made in
enterprises that have been approved by the federal
government. This program provides certain advantages
over the other two programs. The investment can be
either $500,000 or $1 million per investor, depending
upon the program chosen, but the investment must be in a
pre-approved enterprise. One of the best advantages of
the Regional Center Program is that the requirement
regarding the creation of jobs is easier to meet.
REQUIREMENTS
- Invest the requisite capital amount ($500,000 or $1
million, depending upon the program chosen).
- Investor must be an active participant in the
operation of the business. Merely being an investor is
not enough, except for investments in the Regional
Centers where the investor will not have any significant
active managerial roles.
- The investment must create an original, “new”
business, rescue a troubled business (strict
requirements apply), or reorganize or restructure an
existing business into a new commercial enterprise.
- The investment must be from a lawful source of
funds. This can often be a difficult requirement to meet
as the actual source of funds must be proven, not simply
that they currently exist in a bank account.
- The investment capital must be at risk. There can be
no guaranteed redemption agreement or a redemption
agreement that begins prior to the end of the 2 year
period of conditional residency.
- The investment enterprise must create at least 10
full time jobs (directly or indirectly) by the end of
the two year period. The advantage of the Regional
Center is that such job creation has already been
determined favorably by the government as part of the
approval process.
MISCELLANEOUS
Legal and administrative expenses for the initial process
may run as high as $60,000.00 for various Regional Centers,
but may run less if you establish your own business and can
control the administrative expenses. Once the investor
qualifies for a green card in this manner, spouse and
children under age 21 are also eligible for residency and
generally obtain it at the same time as the investor.
There are currently over 75 different approved Regional
Centers. Choosing the right center that is the best fit
requires due diligence on the part of the investor, as
centers vary considerably in location, expected rate of
return, risk associated with the investment, and history of
successful EB-5 applications.
This information is for general explanatory purposes only
and should not be relied upon as legal advice. Receipt of
this information does not constitute the establishment of
any attorney - client relationship, nor is it intended to be
an endorsement or recommendation of any kind
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