The U.S. government created the EB-5 Immigrant Investor Program to encourage foreign investment in U.S. businesses. In exchange for investing in a business that creates jobs for U.S. workers, foreign nationals and their families are eligible to become permanent residents of the US. The program’s name, “EB–5”, comes from the visa category for which immigrant investors apply – the Employment-Based Immigration: Fifth Preference EB-5.
While the program has evolved considerably since its creation in 1990, there are currently two ways for foreign investors to obtain an EB-5 Visa:
1. Direct investment in a new or existing commercial enterprise that creates jobs.
2. Investing capital through a “Regional Center”, a government-approved firm, that actively manages investor funds and the immigration approval process.
Advantages of investing into Regional Center
Investing capital through a Regional Center provides several major benefits to immigrants seeking U.S. residency through the EB-5 program. One of the most important advantages is the ability to count both direct and indirect jobs towards the "job creation requirement".
Direct job creation is a result of an investment which has created and sustained ten new actual identifiable jobs over a two-year period. Under the Regional Center program, investors can also satisfy the job requirement by showing the indirect job creation from pooled funds of all investors in the project. These jobs can be created collectively or as a result of capital invested in a commercial enterprise affiliated with a Regional Center.
In other words, the investor does not need to show that he or she directly hired any employees. The burden of proving job creation is passed onto the Regional Center. The Regional Centers, in turn, hire experienced economists who perform economic analysis and prove that sufficient direct and indirect jobs are created as a result of the project.
Amount of Investment
Each EB-5 Visa applicant must invest a minimum of $1,000,000 in a job-creating venture. If the business receiving capital is located in a Targeted Employment Area (TEA) – defined as a rural area or a region with high unemployment – then the minimum investment amount is reduced to $500,000. Today, most EB-5 investment opportunities are located in TEAs.