What is EB5 Capital?

EB5 capital is the funding used in the EB5 program.

• What you should know about EB5 capital: The EB5 program was created by Congress in 1990 in order to boost the U.S. economy by promoting foreign investment in new commercial enterprises that create new jobs or save existing jobs for qualifying U.S. workers.
• Foreigners invest a minimum of $500,000 in qualifying U.S. business enterprises in return for lawful conditional residency for the EB5 investor and his or her family. If the EB5 project successfully creates the required jobs, the EB5 visa holder and his or her family may qualify for a green card.

The EB5 Capital Minimum Investment Amount

• The minimum investment is $1,000,000 or $500,000 in a targeted employment area (TEA). EB5 capital can be cash, inventory, equipment and other tangible property owned by the EB5 investor.
• Capital must be traceable to lawful sources. The more documentation provided to show evidence of lawful sources of funds, the faster the USCIS may approve the application and petition.

Two Types Of Investment

New Commercial Enterprises (NCE)

• Very few foreigners invest in the $1,000,000 required to commit to investing in a new commercial enterprise when there are so many qualifying projects that only require a minimum of $500,000. However, some still invest in NCEs. This business must be a for-profit commercial entity and the investment must lead to the creation of 10 direct jobs.
• These can be corporations, limited or general partnerships, sole proprietorships, or business trusts established after 1990. Some (troubled) commercial enterprises built after 1990 may qualify if the investment led to a 40% increase in the number of employees, the net worth of the business, or both.
• NCEs require the EB5 investor to take a more active role in running the business.

Regional Centers (RC)

• Regional centers are overwhelmingly the most popular choice for EB5 investors. Regional centers administer projects.
• They have a lower cost of investment, $500,000, if the regional center invests in a TEA.
• They can run the EB5 project for the EB-5 investor. Instead of taking an active role in setting up the EB5 project, like they would have to do for a new commercial enterprise, they could take on a more limited role, such as policy-making.
• Additionally, if an independent EB5 investor invests in a new commercial enterprise they are have the sometimes tough task of fulfilling the 10 direct jobs requirement, while an investor who invests in a regional center projects has a sometimes easier job of creating 10 jobs that can be direct, indirect, or induced.

Releasing EB5 Capital Through New Means Of Escrow

• See: "How EB-5 Escrow Is Changing" to learn why traditional escrow isn't used anymore and what are the new types of escrow being utilized by EB5 investors and agents. These different types of escrow are: Early Release Escrow, Holdback Escrow and Full release Escrow.