What are the Various Investment Options for the EB-5 Visa

The Immigrant Investor Program, also known as the EB-5 visa, is an investment opportunity for foreign nationals. Immigrants must meet specific qualifying criteria to be eligible for the EB-5 visa.

The investor program allows qualifying immigrants to obtain permanent residency in the United States by investing capital in new business ventures. There are two investment options for investors: individually (directly) or through federally approved regional centers.

Direct investment EB-5 Visa

Direct investment is a method of investing capital funds directly into an enterprise instead of investing through an intermediary.

As of November 21, 2019, the minimum investment amount is $1,800,000, but if the investment is made in a Targeted Employment Area (TEA), the investment amount is $900,000.

The direct investment option has some unique features. One of the most critical factors of this option is that the investors must play an active role in the company’s management. Also, at the time of petitioning, investors must demonstrate that the investment will create at least ten direct jobs.

The ten jobs must be actual and identifiable jobs (W-2 employees). These jobs are located within the business and must be filled by qualified employees. Qualified employees are legal citizens or residents of the United States.

The ten jobs must be created within the conditional initial two-year period. Aside from meeting these measures, investors must meet other qualification criteria that apply to all EB-5 investments, such as starting a new commercial business, locating the company in a TEA, and demonstrating the source of investment capital.

Regional Centers

If the investor chooses the Regional Center method, investors can invest in a state-approved Regional Center. The investment amount is $1,800,000 or if the project is in a TEA, $900,000.

Many regional centers are located in targeted employment areas. Some are not. One of the main differences between direct investment and investment in regional centers is that the investor can meet the ten-job creation requirement by creating either ten direct or indirect jobs when investing in regional centers.

In addition, these direct or indirect jobs will need to be created within the two years following the visa petition’s approval.

The regional centers distribute the investments to the affiliated new commercial enterprises. Thus, the disbursements indirectly create jobs. In addition, the U.S. government pre-approves regional centers to promote economic growth.

This means that investors do not have to conduct any analysis or investigation to prove that the job creation requirement will be met during the visa application approval process. In addition, investors do not have to engage in management activities or prove that a new economic enterprise has been established.

Since most regional centers are located at TEA, the required investment amount likely is only $900,000. This makes things even easier for potential investors.

Choosing the proper investment method for your EB5 Visa

The ultimate goal of the investor determines the investment method. Some investors may want greater control over their investment. Or perhaps permanent residency is merely a byproduct of the ultimate goal, which is to expand a business into the United States. For these reasons, direct investment may be the best solution.

Other investors may not be as business-oriented. As a result, regional investment centers may be a better option. These types of investments offer investors more mobility because they are not tied to the company’s region.

However, with this type of investment, investors still need to perform due diligence by investigating the regional center and its affiliated commercial enterprises, success in job creation, financial outlook, and investment experience, amongst other things.

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