Requirements Of An EB-5 Visa

What Are The Requirements Of An EB-5 Visa

Besides the minimum investment requirements of either $1 million or $500,000, investors get their EB-5 visa by establishing a new commercial enterprise (already done if you are investing in a regional center), investing the requisite capital amount, proving the investment comes from a lawful source of funds, demonstrating that the investor is actively participating in the business, and creating the requisite number of jobs. An extremely important part of the process is that the investor must prove that the source of investment funds is from a legal source. A legal source could come from income or it could come from dividends from a stock, gifts, or inheritance. Loans also qualify if structured in the correct way.

Job creation requirements: The investor must create 10 full-time jobs directly (indirect jobs count if you are investing in a regional center). Each full-time employee must work at least 35 hours per week. Family members and nonimmigrant workers do not count toward the job count. The two-year job requirement commences six months after USCIS adjudicates the Form I-526. In other words, the investor must hire and maintain 10 jobs within six months after approval of Form I-526.

Risk: There are many advertisements about 0 percent risk on EB-5 projects. However, the truth is that the federal government actually specifically requires the EB-5 visa investment to be “at risk.” If you choose to invest in a guaranteed return project or 0 percent risk project, your EB-5 investment visa application will be denied. Instead you can choose to invest in lower risk projects, with lower rates of return. This is a conservative way to manage your investment fund, and help your application get approved. Our firm has access to financial advisors who can assist you in choosing the best project for your needs.

Types Of EB-5 Investments

Loan-based investment: This type of EB-5 investment means that the investor invests $500,000 into the EB-5 project, and the rate of return is the interest rate (usually between 1 percent and 4 percent). The loan-based type of EB-5 investment significantly decreases the risk because the investor is considered a creditor and in the event that a project actually does go sour or declares bankruptcy, these investors are usually the very first people to get their investments back. Moreover, loan type investment has a clear exit strategy. When the loan reaches the maturity date, which is usually set after five years from the initial EB-5 investment, you the investor are entitled to your principal investment money back. This creates a limited partnership relationship between investors and lenders (EB-5 investors) who loan money to borrowers (private company, public company, and city).

Equity-based investment: This type of EB-5 investment means that you invest $500,000 into a project or business as a shareholder who takes ownership of the project or business. EB-5 investors and the regional center form a limited partnership. However, the exit strategy for this type of EB-5 investment is not always clear, so the investor should be careful and understand when they are permitted to exit the investment. If the EB-5 investors want to maintain the share, they can stay with the project. If EB-5 investors want to sell the shares, they can typically sell the shares to open market. Sometimes investors are given complete ownership of the project. For example, a project might simply give the investor keys to their apartment building investment after the vesting period of five years.

To learn more about EB-5 requirements, contact C.T. Lee & Associates by calling 800-494-3809. We have offices in New York City and Newark.