Everything You Need to Know About EB-5 Program
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What is EB-5 Program?
United States’ visa program for immigrant investors. By investing a required investment amount in an approved project, an investor and their family members get green card or permanent residency in the United States.
Created by congress in 1990, EB-5 or employment-based fifth preference visa program is administered by United States Citizenship and Immigration Services (USCIS). EB-5 program offers lawful U.S. permanent residency to immigrant investors and their family. An eligible investor must make a minimum necessary investment in a commercial U.S. enterprise and create or preserve 10 permanent full-time jobs for qualified U.S. workers.
The immigrant investor program, also known as Regional Center program, was created to stimulate the U.S. economy through job creation and capital investment by immigrants who can afford to pay a premium price for U.S. green card. Under this program USCIS reserves lots of EB-5 visas for investors qualified for the program. These lots are then distributed among countries based on demand for the visa and applications filed by investors. The availability and demand decide the waiting times for each country. Usually, it takes somewhere between 2-5 years to get their green card.
Once approved investors and their spouses and unmarried children under the age of 21 get lawful permanent residence and can reside anywhere in the United States.
The U.S. EB-5 visa is a permanent visa and requires no future re-qualification, offering more advantages and fewer constraints than any other visa program in the world. The EB-5 visa has no requirements regarding age, business training, management skills, experience, or language skills.
The popularity of this program grew so much especially after the 2008 financial crisis that every year thousands of applications are received and processed by USCIS.
Program Benefits
➜ Better access to U.S. education system for children
➜ Live, work, retire anywhere in the U.S.
➜ Best healthcare infrastructure in the world
➜ Secure a better future for your family
➜ Self-sponsor your U.S. green card
➜ Opportunity to become U.S. citizen
➜ Travel to anywhere in the world without a visa
➜ Shorter wait times compared to other programs
Process & Timeline
➜ Investment Stage (1-6 Months)
This phase involves selecting a project and hiring an immigration attorney to prepare documents and application.
➜ I-526 Petition (0.5-4 Years)
Your immigration attorney files I-526 petition to start your EB-5 application. Wait times influence approval of your application.
➜ Conditional Green Card (2 Years)
You are awarded with a conditional green card and can stay in the U.S.
➜ I-829 Petition
You file this application along with proof of 10 full-time jobs created for U.S. workers.
➜ Permanent Green Card
You and your family get permanent green card status.
Investor Eligibility
An eligible investor must:
➜ make the necessary minimum investment in an approved United States’ commercial enterprise
➜ create or preserve 10 permanent full-time jobs for qualified U.S. workers during the term of the program
EB-5 Program Benefits
Better access to U.S. education system for children
Live, work, retire anywhere, secure future for family
Self-sponsor your U.S. green card, become U.S. citizen
Travel to anywhere in the world without needing a visa
Shorter wait times compared to other programs
Who is EB-5 Program For
Entrepreneurs wanting to expand their business to the U.S.
Working professionals already in the U.S. on employment visa such as H1B
Parents wanting to educate their children in U.S. schools and colleges
Undergraduates seeking higher studies in ivy league universities in the U.S.
Families looking to secure future for their next generation
High Net Worth Individuals HNIs seeking diverse investment opportunities
Immigrants wanting benefits to live, work, retire anywhere in the U.S.
EB-5 Process and Timeline
As a first step, an investor must select a project to invest in. The investment can be through a regional center or direct. The investor must present a business plan of the project they are investing in. The investor should then work with their immigration attorney to file I-526 petition requesting conditional residency.
Upon reviewing the application, USCIS decides whether the investor and their family qualifies for the conditional EB-5 visa. This step includes detailed inspection of sources of investor’s fund, family history, criminal records of all the applicants. USCIS also reviews the project details and job creation. If approved, the investor can schedule an interview with USCIS to get a conditional green card valid for 2 years. The investor and their family can then travel and start staying in the U.S.
Towards the end of 2-year period of conditional residency, investor’s attorney should file a I-829 petition to remove the conditions off the conditional green card. Once this petition is approved, investor and their family members become lawful permanent residents of the U.S.
Investor Eligibility Criteria
- make the necessary minimum investment in an approved United States’ commercial enterprise
- create or preserve 10 permanent full-time jobs for qualified U.S. workers during the term of the program
- no requirements regarding age, business training, management skills, experience, or language skills
Since the EB-5 program aims at creating employment opportunities for U.S. residents, an EB-5 investor must invest the required investment amount of capital in a new commercial enterprise that will create full-time positions for at least 10 qualifying employees.
Who is a Qualified Employee for EB-5 Project?
A qualifying employee is a U.S. resident, lawful permanent citizen, or an immigrant authorised to work in the U.S. including conditional or temporary residents, asylee, refugees, or person living in the U.S. on suspension of their deportation. Immigrant investors, their families, or any non-citizen immigrants on H1B or other unauthorised workers are not qualified for EB-5 job creation. The jobs must be provided for atleast 2 years which is the qualifying period for the program.
Full-time employment means a commercial enterprise must directly employ the qualifying employee for a minimum of 35 hours per week. Same exists in the case of the regional center too, where the regional center must employ the qualifying employees for a minimum of 35 hours per week. Part-time employments do not count in the minimum requirement. Intermittent, temporary, seasonal, or transient jobs do not qualify as a full-time job required by the EB-5 program, unless they last for more than two years, in which case they do not count as temporary.
How to Arrange Investment Amount
Investors are permitted to utilize various legitimate sources of funds to meet the EB-5 investment requirements. Eligible sources of funds include personal savings, gifted funds from family or friends, loans from financial institutions, inherited assets, proceeds from the sale of assets, business profits, salary or employment income, and retirement savings.
Investors must prove legality of their funds and provide detailed documentation to verify the sources. Proof of sources can be presented in form of bank statements, gift letters, loan agreements, business documents, or tax returns. Investors have to work closely with their immigration lawyer and financial advisor to fill application form properly and ensure compliance with regulations.
Always keep a buffer of few thousands of dollars to accommodate the delays in your application approvals and other administrative fees required for a successful process.
EB-5 Program Investment Costs
Investment Capital
$800,000 if you invest in a project under Targeted Employment Area (TEA) or $1,050,000 if not under TEA
Application Fees (Stage 1)
$3,675 application fee + $1,000 EB-5 integrity fund fee paid to USCIS for I-526 or I-526e
Application Fees (Stage 2)
$1,140/member >14 yrs old & $750/member <14 yrs old & $450 processing fee paid to USCIS for I-526 or I-526e
Application Fees (Stage 3)
$3,750 application fee paid to USCIS for I-829
Attorney Fees
This could range between $10,000 to $20,000
Administrative Fees
This could be between $50,000 to $100,000 charged by your regional center or financial advisors
What is a Targeted Employment Area?
A targeted employment area (TEA) is a designated area by states governments or federal agencies as having high unemployment rates compared to the national average or being located in a rural area. United States government through EB-5 program wants to create employment opportunities by attracting investments into infrastructure development projects from immigrants willing to pay for their green card.
High Unemployment Area
A high-unemployment area is a location in which the new commercial enterprise is primarily doing business has a weighted average unemployment of 150% of the national unemployment average based on the labor force employment measure.
Rural Area
As per USCIS definition, a rural area is any area other than an area within a metropolitan statistical area (MSA) (as designated by the Office of Management and Budget, OMB) or within the outer boundary of any city or town having a population of more than 20,000 according to the most recent decennial census of the United States.
Infrastructure Projects
USCIS also classifies certain categories of projects for infrastructure development and public welfare.
Set-Aside Visas
Each year USCIS reserves a certain number of EB-5 visas for investor who chose to invest in TEA projects. These are called as set-aside visas.
| Rural Area | High Unemployment Area | Infrastructure Projects |
|---|---|---|
|
20% |
10% |
5% |
What is a Regional Center?
A regional center (RC) is a private or public company approved by United States Citizenship and Immigration Services (USCIS). RCs are authorized to collect investments from multiple EB-5 investors and pool their investment into an approved project. Regional centers must operate in a designated region approved by USCIS. Regional centers are supposed to coordinate with project developers and ensure minimum full-time job creation on behalf of EB-5 investors following requirements of EB-5 program.
Types of Investment
There are two types of EB-5 investment, direct and indirect (regional center) investment. The primary difference between direct and regional center investments in the EB-5 program lies in the investor’s level of involvement in job creation and the structure of their investment. With direct investment, EB-5 investors invest in and manage a new commercial business, requiring active participation in day-to-day operations of the business and job creation efforts. Regional center investments involve investing in projects managed by third-party entities known as regional centers, allowing for a more passive role for EB-5 investors as the regional center oversees project management and job creation.
Direct investments offer greater control but require more hands-on involvement, while regional center investments provide a passive investment option with less direct management responsibility. Job creation and management can be a tedious task and proving that later to USCIS is another huge task. Hence, if you see the success rates, regional center investments stand better chances at getting approved. Investors should carefully consider their preferences, risk tolerance, and investment goals when choosing between the two options.
| Direct Investment | Regional Center Investment |
|---|---|
|
Investment amount $800,000 (TEA) or $1,050,000 (Non-TEA) |
Investment amount $800,000 (TEA) or $1,050,000 (Non-TEA) |
|
Investor involvement in job creation is direct and needs daily management of business to create 10 full-time jobs |
Investor involvement for job creation is through regional center and doesn't need daily management |
|
Investors hold a strong level of control on resulting business and its functions |
Investors hold only a limited control on resulting business and its functions |
|
Investors must prove the economic feasibility of the project and business model |
Regional center projects are usually pre-approved |
|
Flexible and higher return on investment, no guarantees |
Fixed and a lower return on investment, guaranteed |
|
Mandatory permanent residence in a state of business investment |
Investor and family can stay anywhere in the U.S. |
Selecting a Safe EB-5 Project
Thorough research is a must when selecting a project for your EB-5 investment. You should vet every detail of the project before making your investment. A few key factors could be evaluating the investment structure, such as choosing between regional center or direct investments, assessing the project type and location, and nature to align with their goals and preferences.
Additionally, investors must evaluate project’s ability to create the required minimum jobs as it’s the primary criteria for a successful approval of their visa.
Checking a few more factors like financial viability of the project, developer’s track record, immigration track record, legal and regulatory compliance will help the investor more gain confidence.
Finally, checking the project’s investor exit strategy, getting a due diligence done on the project’s financials by an external authority ensures financial assurance. Not forgetting, your personal circumstances. You should always be prepared for changes in regulations, extensions, delays. If your personal circumstances are not favouring, it could be challenging.
Past investors, your attorney, financial or economic advisors can be your go to resources for making the right decision.
- Investment Structure
- Project Type
- Job Creation
- Financial Viability
- Developer Track Record
- Immigration Track Record
- Legal and Regulatory Compliance
- Exit Strategy
- Due Diligence
- Personal Circumstances
Frequently Asked Questions (FAQs)
What is form I-526?
Form I-526 is the primary application form used by investors to apply for the EB-5 Immigrant Investor Program governed by USCIS. It is also known as the “Immigrant Petition by Alien Investor”. By filing Form I-526 an investor demonstrates that they are investing in a new commercial enterprise which will create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years of the immigrant investor’s admission to the United States as a Conditional Permanent Resident.
What is form I-829?
Form I-829 is a form used by EB-5 investors to remove the conditions on their lawful permanent residency status in the United States. It is also known as the “Petition by Entrepreneur to Remove Conditions”. This form is typically filed by EB-5 investors within the 90-day period immediately before the second anniversary of their admission to the United States as a Conditional Permanent Resident. By filing Form I-829, investors must prove that they have fulfilled the requirements of the EB-5 program. Which includes investing the required capital, creating or preserving the required number of jobs, and maintaining the investment for the conditional period. Upon approval of Form I-829, the investor and their eligible family members can receive unconditional lawful permanent resident status in the United States.
Can I take a loan to invest in EB-5?
Yes, you can take a loan under certain circumstances. There are a few important conditions to keep in mind such as, source of funds need to be legitimate, meeting the minimum investment amount, ability to payback the loan, and considering the risk association with loan terms, potential fluctuations in interest rates, and more. Consult with your financial advisor before making a decision.
How to convert from H1B to EB-5?
Anybody can apply for EB-5. There is no restriction on educational background, expertise, professional, etc. To switch from H1B to EB-5 status, an immigrant must follow the relevant process described above in this article. Get your investment ready, file your I-526 petition. Upon approval of I-526, applicant must file I-485 or DS-260 to declare their conditional permanent residency and change status from H1B to EB-5. When nearing 2 years, I-829 must be filed to request removal of conditions.
How to estimate risk associated with a project?
Investors must perform a thorough due diligence of the project they decide to invest in. To do so, you want to get details about financials of the project, a project plan, job creation and visa approval track records, exit strategy and more. The best practice is to hire a financial advisor to perform due diligence on your behalf. This way you can develop a fair understanding of the risk associated with the project.
What is the wait time for EB-5?
Wait times for EB-5 program depends on your country of origin, USCIS processing times, visa availability and several other factors. Each year thousands of applications are received by USCIS, resulting in a backlog. Backlog decides the wait time of your EB-5 approvals. If you are applying from a country that has huge demand, the backlog could be more and hence needs more time for your application to be approved.
How do I get EB-5 funding?
You can arrange funds for your EB-5 application from your personal savings/assets, gifts from parents or relatives, secured loans from banks, and other sources.
What is the success rate of EB 5 visa?
Success rate of your EB-5 application hugely depends on your eligibility, project’s ability to generate 10 full-time jobs and various other factors. Although there is no official data published on USCIS website or other reliable sources, typically success rate of EB-5 is more compared to other immigration program, which also is demonstrated by its increasing demand.
How long can I stay in EB-5 visa?
Once your I-526 is approved, you can start staying in the US under the conditions of your conditional green card for 2 years. 90 days before the end of 2-year period, you can file I-829 to remove conditions from your green card and give you a permanent status.
What is the minimum age for EB5 visa?
There is no minimum age for applying for EB-5 program. However, minors applying must have a legal guardian or parent who can sign necessary documents on their behalf.
Can EB-5 visa be rejected?
There are chances your EB-5 application can be rejected by USCIS. This happens in cases where investors fail prove the legitimacy of the sources of their investment funds or they fail to create the minimum jobs required by the program. Typically, the rejection rate is higher for direct method than regional center investments.
Do EB-5 investors get their money back?
If investors invest through regional center method, the project owners are liable to return the investment amount to EB-5 investors. Though timelines depend on project completion and profit generation. If investors chose to invest via the direct route opening their own business, then returns depend on the success of their business.
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