Like many countries, the U.S. provides a means of entry for wealthy people who will pump money into its economy. This is known as the employment fifth preference—or “EB-5”—immigrant visa, which allows people to obtain permanent residence immediately upon entry to the United States.
However, applicants for a U.S. green card based on investment must not only invest between $500,000 and $1 million in a U.S. business, they must take an active role in that business (though they don’t need to control it).
Green cards for investors are limited in number, to 10,000 per year, and green cards for investors from any one country are limited as well. If more than 10,000 people apply in a year, or a large amount of people from your country apply that year, you might be placed on a waiting list based on your “priority date” (the day you filed the first portion of your application).
Most people don’t have to worry about being put on a waiting list: Until recently, the 10,000 limit had never been reached. In the last several years, however, demand for EB-5 visas from China has created a waiting list for Chinese investors. People from other countries currently (as of 2016) do not have to wait.
Get a lawyer for this visa! If you can afford an investment-based green card, you can afford the services of a high-quality immigration lawyer. The EB-5 category is one of the most difficult categories under which to establish eligibility, and absolutely the most expensive. It is well worth paying for legal advice before taking any significant steps toward applying for this visa.
If you try the application once on your own and fail, you may damage your chances of success in the future. What’s more, because you are expected to make the investment first, and apply for the green card later, you could waste a lot of money.
Here are some of the advantages and limitations to an investment-based green card:
There are two different ways to get an EB-5 visa. Most people invest in a “regional center,” which is an organization that runs a business that creates jobs. This is attractive to most investors because they do not have to create their own business, and the required dollar amount of the investment is usually only $500,000, instead of the $1 million that may otherwise be required. See When $500,000 Is Enough to Get an Investment-Based Green Card (EB-5).
Regional centers are designated and approved by U.S. Citizenship and Immigration Services (USCIS), and are set up to take care of USCIS requirements for the initial, conditional EB-5 visa. Investors must be careful to choose a regional center that can actually deliver on its promise to take care of USCIS requirements for getting the unconditional green card, however—not all can and do.
Another concern is that, despite regional centers being a highly sought after way to apply for an EB-5, the program is not a permanent part of U.S. immigration law. It is set to expire March 23, 2018 unless Congress acts to extend it.
You can also get an EB-5 visa through direct investment in your own business. You must invest a minimum of $1 million in creating a new U.S. business or restructuring or expanding one that already exists.
The entire $1 million or $500,000 amount must come from you; you can't share the investment with other people and expect any or all of you to get green cards. The investment amount is lowered to $500,000 if your business is located in certain areas outside big cities or places where unemployment is high.
USCIS will look at where you got the money for your investment, to make sure it was from a lawful source. You’ll need to provide evidence, such as salary, investment, sale of lawfully obtained assets, gift, or inheritance.
However, the investment does not have to be made solely in cash. Cash equivalents, such as certificates of deposits, securitized loans, and promissory notes, can all be counted in the $1 million total. So can the value of any equipment, inventory, or other tangible property you put into the business. You must make an equity investment (ownership share) and you must place your investment at risk of partial or total loss if the business does badly. (See the federal regulations at 8 C.F.R. § 204.6(e).)
You may even use borrowed funds for the investment so long as you remain personally liable in the event of a default (nonpayment or other violation of the loan terms) and the loan is adequately secured (not by assets of the business being purchased). Any mortgages on the business assets will disqualify the amount borrowed from being calculated in the total investment figure.
The business in which you invest must ultimately employ at least ten full-time workers (not counting independent contractors), produce a service or product, and benefit the U.S. economy. Full-time employment means at least 35 hours of service per week. One advantage of investing in a regional center is that it can count “indirect” jobs created by businesses that service the main business, as shown by economic models.
The investor, spouse, and any children may not be counted among the ten employees. Other family members may be counted, however. The ten workers do not necessarily have to be U.S. citizens, but they must have more than a temporary (nonimmigrant) U.S. visa. Green card holders and any other foreign nationals who have the legal right to indefinitely live and work in the U.S. can all be counted toward the required ten.
It’s important to realize that you won’t be able to send the money, sit back, and await your green card. The investor must be actively engaged in the company, either in a managerial or a policy-forming role. Passive investments, such as land speculation, do not ordinarily qualify you for an EB-5 green card. Fortunately, USCIS considers investors in a regional center set up as a limited partnership (as most are) to be sufficiently engaged in management by virtue of their investment.
If seeking an EB-5 visa through direct investment, the investment must be made in a new commercial enterprise. You can either create an original business, buy a business that was established after November 29, 1990, or buy a business and restructure or reorganize it so that a new business entity is formed.
If you buy an existing business and expand it, you need to increase either the number of employees or the net worth of the business by at least 40%. You also need to make the full required investment ($1 million or $500,000, depending on location) and you would still need to show that your investment created at least ten full-time jobs for U.S. workers.
If you buy a troubled business and plan to save it from going under, you will need to show that the business has been around for at least two years and has had an annual loss of 20% of the company’s net worth at some point over the 24 months leading up to the purchase. You must still invest the full required amount, but to get the unconditional green card you are not required to show that you created ten jobs. Instead, you would need to show that for two years from the date of purchase, you employed at least as many people as were employed at the time of the investment.