Kapin PLLC

View Original

What Is The EB-5 Program?

The EB-5 Immigrant Investor Program, also known as the “EB-5 visa program”, was established by Congress in 1990 as a way to stimulate the U.S. economy through foreign capital investment.

There are two pathways that an immigrant investor can take when applying for EB-5: the Basic Program and the Regional Center Pilot Program. The Regional Center Pilot Program was created by Congress in 1992 in order to further promote U.S. economic growth.

No matter which program route an immigrant entrepreneur decides to take, both routes allow investors to receive U.S. permanent residency (green card status) for themselves and their immediate family in return for investing $1 million in a job-creating new commercial enterprise (NCE) or troubled business. The minimum investment amount is reduced to just $500,000 if the project is located in a targeted employment area (TEA), which is a rural area or high unemployment area.Ultimately, both programs can result in the EB-5 investor and their family becoming eligible for U.S. citizenship after 5 years.Both programs require investors to create or save 10 full-time jobs for qualified U.S. workers. Investors have two years, after receiving conditional permanent residency, to prove job creation. In some circumstances, they can provide proof that jobs are projected to be created in a reasonable amount of time after the two year mark.What else is the same between the programs? There’s a myth that only Regional Center Program investors can obtain the lower minimum investment amount of $500,000. This is false. Investors in both programs are eligible for the lower minimum investment amount of $500,000 if their project is located in a designated TEA. The second myth about the programs is that the Basic Program is a riskier investment. This is false. Both programs require investors to invest in an “at-risk” project. This means that there are no guarantees that investors will receive their capital back. Investor are encouraged to conduct thorough due diligence and consult with an immigration attorney prior to signing any contracts.One of the main differences between the programs is in what types of jobs can be counted toward the EB-5 Program requirements. The Basic Program only allows investors to count direct jobs. The Regional Center Program, on the other hand, not only allows investor to count direct jobs, but they can also count indirect and induced job creation, meaning that fulfilling the program job-creation requirements will be easier if the Regional Center Program route is taken.The other main difference between the two programs is the requirement in the Basic Program that stipulates that investors must take an active role in day-to-day management of the NCE. Regional Center investors do not have to manage their project on a day-to-day basis and can instead chose to take on the role of policy-maker.

To find out if you’re eligible for either program, fill out the evaluation below or send us a message if you would like further information.

[formidable id="11" title="1"]