A short Primer on “The EB-5 Immigrant Investor Program, administered by U.S. Citizenship and Immigration Services (USCIS)” presented by Esther Malka, Outreach Director of America EB-5 Visa.
What is the EB-5 Visa?
The EB-5 Immigrant Investor Program, administered by U.S. Citizenship and Immigration Services (USCIS), is essentially a direct path for investors, their spouses, and their unmarried children under 21 to receive a permanent residence “Green Card” from the United States. Of course, there are several requirements for an investment to qualify as an EB-5 investment.
Currently, the law is as follows: EB-5 visa applicants are required to invest in either what is a called a “Regional Center” project, or directly in a commercial enterprise. When the investment funds are deployed into the economy, they need to result in the creation of at least 10 full-time jobs for U.S. workers. An investor need not worry about the timing of this job creation. Once the investor receives his conditional permanent residency status, the receiving company will have two years to generate ten or more jobs in order for the investor to change his status from conditional to permanent.
The majority of EB-5 investors decide to invest in Regional Centers, designated by USCIS to administer EB-5 investment projects and are therefore responsible for adhering to the USCIS EB-5 program regulations. Regional Centers also face far more lenient regulatory requirements than direct investments. For example, Regional Centers alone can calculate and verify job creation with economic models that do not distinguish between part time and full time workers, rather than showing payroll records. Additionally, Regional Centers can count “indirect jobs” towards the job creation requirement. These are jobs created outside of the New Commercial Enterprise (NCE), but result from EB-5 investment in the NCE. The NCE typically but not necessarily makes a loan to Job Creating Entity (JCE). The JCE directly or through layers of companies it owns creates these jobs. This means that Regional Center investments often have structures involving multiple entities and include debt arrangements.
The Future of EB-5
The current investment amount is $500,000 in a targeted employment areas, but we have been experiencing quite a bit of uncertainty about this amount for well over a number of years now. It is possible that in the next few months we could see attempts to change the current program through previously introduced regulations. This means that TEA projects could go from $ 500,000 to $ 1.35 million and non-TEA projects could go from $ 1 million to $ 1.8 million. Potential investors who are serious about taking advantage of this wonderful program therefore should act now while they still can at these favorable terms before it is too late.