By: Carl A. Bosse

Of importance to all members of AREA is the EB-5 program. Here is a cursory overview of what it is, what it does, how it works and how it can benefit your business. Should you get a client interested in this program, I will be very glad to personally assist you.

The EB-5 visa category was created by Congress in the Immigration Act of 1990 to encourage the flow of foreign capital into the U.S. economy and to create jobs for U.S. workers. There are 10,000 available visas in the EB-5 visa category annually, 3,000 of which are reserved for foreign investors who want to participate in an EB-5 pilot program designed for targeted investments in approved regional areas.

The Benefits to the foreign investor are:

• The EB-5 Visa holder and their qualifying family members (spouse and unmarried, minor children) receive a “conditional” green card.
• After two years, if the investor has complied with the terms and conditions in the original EB-5 Investment Visa application, he or she can apply for an “unconditional” green card.
• EB-5 investors and their families can live anywhere in the U.S.
• The EB5 visa category allows investors to retire to the USA.
• In a Regional Center program the applicant does not need to manage the day-to-day affairs of a business and does not need to be sole investor.

The requirements are:

• The applicant must establish a business or invest in an existing business which was created or restructured after November 19, 1990.
• The foreign investor must have invested $1 million (or $500,000 if investing in a USCIS designated regional center) in the business.
• The business must create at least 10 full-time jobs for U.S. workers.
• The EB-5 investor must demonstrate that the investment capital was “lawfully gained” and the required capital is at risk for investment purposes.
• The investor must enter the United States within 180 days of visa issuance.
• The EB-5 visa holder is not required to be physically in the U.S. for any given amount of time, but must demonstrate the “intent” to be a resident. This includes:
  • Renting or buying a home
  • Opening bank accounts
  • Obtaining a social security number
  • Obtaining a driver’s license
  • Paying applicable taxes

There are Serious Pitfalls: Here is what to do about them.

• Investors are required to create 10 full time jobs. (This is rigidly enforced and I am personally aware of a German couple who acquired a B&B in the White Mountains of Arizona who had to lay off a large segment of their staff in 2008-09. They lost their business and their Green Card and had to return to Germany.) If you are in a Regional Center, that requirement is fulfilled by the Center. This is the most practical and safe way to go. More about that below.)
• Charlatans: Many investors have been hoodwinked by very sophisticated “crooks”. You must be careful with whom you work. Only do it with those who have proven track records and come highly recommended.
• Get the best possible Immigration Attorney involved from the very beginning. This process goes nowhere fast without them.
• Starting a new business creates risk. Regional Centers tend to mitigate that risk.

Why well managed Regional Centers may offer the safest investment!

While many investors interested in living in the U.S. are eager to start a new business, others are concerned that they may not be able to replicate the success they’ve had back in their home country. In fact, given the current economic climate, even some of those “hands on” entrepreneurs are giving the notion of an upstart business a close re-examination.

Fortunately, the U.S. government offers an investment-based permanent residency opportunity which takes the traditional investment and job creation requirements of the individual EB-5 Investor Visa and consolidates it into structured, federally-approved “Regional Centers” which essentially offer the same immigration benefits while removing the task of new business creation from the investor.

It works like this: by pooling the investment funds of multiple investors, these highly controlled and professionally managed Regional Centers create diversified investment pools which not only stimulate the U.S. economy, but allow for indirect job creation. These investments and indirect jobs are essentially “pro rated” among the investors in order to meet the requirements and they offer the same permanent residency.

While you’ll read about the “Regional Centers” as “passive” investments, they are anything but “passive”. In fact, the job generation activity and regional economic impact tends to be far greater – more “active” – than that possible by any individual investment. The main difference is the existence of a professional team, approved by the federal government, to manage the investor funds and guide the investment to its ultimate purpose: a powerful economic impact on U.S. communities and jobs AND permanent U.S. residency for its investors.

So Why Invest via a Regional Center?

This question will depend upon each unique investor but, basically, the primary reason is to pursue U.S. permanent residency without having to start your own “bricks and mortar” enterprise…by letting pro’s handle that aspect of it. Most Regional Centers are in designated high-unemployment or rural zones. That means one invests $500,000 instead of $1 million…and that is pretty compelling for most.

The Regional Center receives and controls the investment funds and the investor does not have to run the investment enterprise; the Center also takes responsibility for ensuring that the investment there meets the “create 10 jobs” requirement.

For Additional Information contact Carl Bosse at Carl@areamericas.com