EB-5 Investment Options
The EB-5, also known as the Immigrant Investor Program, was created to stimulate the economy through job creation and capital investment by foreign investors. Investors considering this process must fulfill the general requirements:
- Must invest, or be in the process of investing, at least $1,000,000. Unless, the investment is made in a company located in a designated “Targeted Employment Area”, in which case the investment is only $500,000.
- Must provide Benefit to U.S. Economy in the form of goods or services.
- Must create 10 full-time employment positions. (Unless otherwise designated below)
- Must be involved in the daily business of the company. (Unless investing in a regional center, as explained below).
New Business EnterpriseAny for-profit lawful business entity is considered a commercial enterprise. You have 4 sub-avenues in this option:
1. Creating a New Business: EB-5 defines "new" as one that was established after November 29, 1990.
2. Buying an Existing Business to Restructure or Reorganize: Investors can restructure an existing business. You cannot simply change the legal structure, but create essentially a new business model from an existing company.
3. Expand an existing business: Investors can create a new business by expanding an existing one. Must either expand the new worth or the number of employees by 40% (overruling the 10 jobs rule below)
4. Pooling: multiple investors can combine their money to invest in an enterprise. All investors must infuse the required amount, and adhere to all rules individually for the EB5.
Troubled BusinessThe definition of a troubled business: "[A business] that has existed for a minimum of 2 years, AND this business must have incurred a net loss for the 12 to 24 month period before you file your immigration forms."
The loss must be equal to at least 20% of the business’s total net worth.
In regards to the jobs requirement, investors must maintain at least 10 jobs that existed before the investment for a period of at least 2 years. The investor must show that the number of existing employees in the troubled business is being, or will be maintained, at no less than the pre-investment level for at least 2 years.
Regional Center ProgramTo encourage immigration through investment in specific regions, an investor can invest in a designated “Regional Center Program.” A “Regional Center” is a designation by USCIS on the basis of a proposal for economic growth in the particular geographic area.
Regional Centers are already established, so investors must only choose the particular regional center.
Regional Centers only require that you invest $500,000 when in a targeted employment area.
Jobs can be created either directly or indirectly through investment in a regional center.
Although there is no need for the investor to be a part of the daily business, there is requirement to submit a detailed administrative structure of the regional center. It must include an explanation on how it will promote more investment, assess investor projects and oversee all investment activities.