EB-5 is a government immigration program for foreigners to obtain permanent residence in the United States through investment in the American economy. Along with the investor, the right to live and work in the United States of America is granted to his spouse and unmarried children under 21 years of age.
The essence of the project is that a foreigner who has created 10 jobs and made direct investments in the US economy in the amount of 900,000 USD will receive a Green Card. The legislation allows candidates to establish new businesses or finance existing firms. The EB-5 program is aimed at combating unemployment, so the amount of capital investment in companies located in targeted employment zones is reduced by 50%.
Participation in the immigration program gives the investor a real opportunity to obtain permission to reside in the United States in a relatively short period of time, which is why the EB-5 visa is very popular among Russians, Ukrainians and other immigrants from the former Soviet Union seeking to become citizens of the United States. It is much easier for residents of the CIS to obtain a Green Card than, for example, residents of India or China, since the flow of applicants among the latter significantly exceeds the number of places allocated under the quota.
Benefits of the American EB-5 program
Participation in the EB-5 investment program provides the applicant with a number of important advantages:
- legal acquisition of US resident status;
- the opportunity for the investor and his family members to live, work, and do business in any region of the country;
- no requirements for language skills and professional experience;
- the right to obtain a permanent residence permit after 2 years with the prospect of obtaining citizenship;
- the investor does not need to be actively involved in the implementation of the project in which the investment was made;
- the opportunity for the investor to return the money after the expiration of the investment period;
- allowing the investor’s children to attend public schools in the United States.
The disadvantages of the US investor visa include the limitation on the number of applicants – the government considers no more than 10,000 applications per year. Usually the number of people wishing to receive a Green Card for investment exceeds the existing limit.
Amount of investment and expenses for registration
The costs of obtaining an EB-5 investor visa to the United States, compared to immigrating to other countries with a comparable standard of living, are quite reasonable, as you can easily see by reading the table below.
| Amount of investment | USD 900,000 for a project in a targeted employment zone or USD 1,800,000 for a project not in a targeted employment zone |
| Expenses for registration | About 7,000 USD – state duty; from 65,000 to 90,000 USD – administrative fee |
| Additional expenses | From 20,000 to 40,000 USD – services of an immigration lawyer |
| Note | Additionally, it is recommended to reserve from 100,000 to 150,000 USD for unforeseen expenses for participation in the program |
Basic requirements for an investor under EB-5
An applicant for a Green Card must make investments in US companies and create 10 jobs according to the criteria of the EB-5 program. A prerequisite is entrepreneurial risk – deposits made with a return guarantee do not give the right to a residence permit. An investor visa is granted only to those persons who have documented the legal origin of the funds allocated to finance the project.
Citizens of any country can obtain a residence permit in the United States of America, but preference when considering applications is given to immigrants from Russia and other post-Soviet countries who do not choose the annual quota of 7% of 1000 participants . Residents of India and China have to wait a long time for their turn, since there are extremely many applicants among them.
There are no language or professional experience requirements for an applicant starting a business or investing in US stocks. The EB-5 Investor Visa allows the alien and his or her family to travel freely within and outside the country without any restrictions. After 4 years and 9 months, the permanent resident is eligible to become a United States citizen without having to renounce his home country’s passport.
EB-5 Visa Process
- Contacting an immigration specialist and choosing an investment project . Qualifications are required to handle the immigration process, so applicants should hire an attorney with experience in the EB-5 program. The specialist introduces the candidate to the legal provisions governing the issuance of a Green Card through investments in the United States, and also explains how to obtain an EB-5 visa and how long it will take. While the lawyer is studying information about the client’s assets and documents confirming the legality of the funds, the applicant selects an investment project.
- Making investments . Having identified an investment option, the candidate submits it to his lawyer for due diligence. After receiving confirmation that the selected property meets immigration and investment purposes, the applicant completes the paperwork and transfers the funds to a trust escrow account.
- Filing a foreign investor petition . After transferring the capital, the candidate, through a lawyer, draws up a foreign investor petition on Form I-526 and submits it, along with accompanying documents, to the USCIS at the place of registration of the financed enterprise. The time frame for a decision on a petition can take from 10 months to 2 years.
- Registration of a conditional Green Card . Once the Form I-526 petition is approved, the investor submits an EB-5 visa application through an attorney. During the process of obtaining a residence permit, the applicant undergoes a medical examination and a personal interview with a consular officer in his country of residence, and also submits his documents for verification (see below). After completing the procedure, the applicant receives an immigrant visa within 30-40 days, and this gives him the right to enter the country. The investor’s initial Green Card arrives in the mail a few weeks after arriving in the United States.
- Obtaining permanent resident status . A conditional residence permit is issued to the investor for 2 years – during this period he is obliged to ensure the creation of 10 vacancies and maintain his contribution to the commercial project on the terms of entrepreneurial risk. After the end of the two-year period, the foreigner has the right to return his funds and submit a petition for permanent residence to the USCIS. Form I-829, Waiver of Conditions on Permanent Resident Status, serves as the basis for the US authorities to issue the applicant a Green Card, equivalent to permanent residence.
Package of documents
During the EB-5 immigration program, an applicant will need 4 sets of documents for various stages.
Investment stage :
- Certificates, statements, invoices and tax returns indicating the legal origin of capital.
Foreign investor petition stage :
- Form I-526;
- evidence of investment (constituent documentation of a registered enterprise or agreement to purchase an existing company);
- confirmation of the target employment zone (for those who have chosen this option);
- tax returns and partnership documents for the last 5 years indicating the legitimacy of the source of money;
- certified copies of court decisions, civil and criminal actions pending or completed within the last 15 years;
- evidence that the new project will create 10 full-time positions for qualified employees;
- a business plan or other documents demonstrating that the number of jobs will be maintained for at least 2 years.
Investor visa application stage :
- Valid foreign passport;
- 2 photographs measuring 2 x 2 cm;
- Form DS-260 Application for Immigrant Visa and Alien Registration;
- civil documents of the applicant (marriage, divorce, birth certificates of each child);
- completed forms with the results of the medical examination.
Stage of application for waiver of conditions relating to permanent resident status :
- Proof of continued investment for 2 years (invoices, receipts, business licenses, federal or state tax returns and quarterly reports);
- evidence of 10 job openings over a 2-year period (payroll records, tax documents, and employee I-9 forms);
- information indicating that the number of jobs is maintained at least at the pre-investment level (for candidates who have invested in an existing business).
How long does the EB-5 visa process take?
The process of obtaining a primary residence permit under the EB-5 program takes from 1.5 to 2 years. The duration of the procedure may vary depending on the citizenship of the applicant and a number of other factors. The duration of each stage is as follows:
| Stage | Implementation period |
|---|---|
| Familiarization with the provisions of the program, selection of an investment project and transfer of money | from 1 to 3 months |
| Filing an I-526 Petition and Waiting for a Decision on It | from 10 months to 2 years |
| Obtaining a conditional Green Card (if applying from abroad) | from 3 to 6 months |
| Obtaining a conditional Green Card (if applying from the USA) | from 6 to 14 months |
The re-issuance of the primary card to a permanent one occurs after 2 years – the time for consideration of the application depends on the type of project being financed.
Where can you invest?
Through the EB-5 investment program, the United States provides a wide variety of business models to foreigners. In most cases, candidates are asked to invest in real estate development projects since the construction industry is the easiest to control job creation.
Investor visa applicants can finance the following types of properties :
- agricultural projects, farms and wineries;
- hotels and restaurants;
- stadiums and gyms;
- entertainment centers and casinos;
- medical technologies;
- office buildings;
- shopping centers and shops;
- production of electric vehicles.
Regional Centers
In 1993, the US government launched the EB-5 Regional Centers program to effectively leverage foreign investment in the US. A network of equity agencies and corporations accredited by the Department of Citizenship Affairs has been created, each of which is responsible for attracting, pooling and distributing funds received under the EB-5 program. Applicants planning to invest in the United States economy to obtain a Green Card have the opportunity to make an investment through a regional center.
The decision to finance a project through government-approved intermediaries provides two advantages:
- permission to invest funds jointly with other investors under the terms of a limited liability partnership;
- the ability to take into account jobs created not only directly, but also indirectly.
Since not all regional centers operate equally efficiently, you should be responsible when choosing a company to which you can entrust your investments. First, the investor needs to make sure that the institution he is going to contact can help him fulfill the requirements of the immigration program and ensure the return of funds upon expiration of the investment preservation period.
Since not all regional centers operate equally efficiently, you should be responsible when choosing a company to which you can entrust your investments. First, the investor needs to make sure that the institution he is going to contact can help him fulfill the requirements of the immigration program and ensure the return of funds upon expiration of the investment preservation period.
When choosing a regional center, it is important for the applicant to clarify the following :
- for how long the company has been operating;
- how many successful projects have been implemented;
- what are the reasons for failures, if any;
- terms of return of investment funds;
- what builders and developers the regional center cooperates with;
- whether the company is a defendant in any claims or litigation.
Investments through regional centers are called passive investments, and are the choice of most EB-5 participants. After transferring funds, the investor is not required to take any action to develop the project, since the company independently implements it. An investor should entrust the selection of a regional center to a qualified immigration lawyer. The participation of a professional will guarantee the fulfillment of all immigration conditions and will ensure a high probability of return of investment funds.
EB-5 Investment in Training
Wealthy parents of a graduating child often issue him a Green Card under the EB-5 program for admission to a university in the United States – this option is more profitable than an F1 student visa. US resident status allows the applicant to save on tuition fees. Education at the University of Michigan, University of California, Los Angeles and other prestigious educational institutions for an investor visa holder will cost half as much as for someone who has issued an F1 visa.
Another important point is the absence of time restrictions when looking for a job after receiving a diploma. A graduate with a student visa has only 3 months to find a job or think about another way to stay in the country. A US resident can take his time and look for a suitable place as long as he needs. The return of investment after the expiration of the investment period will help yesterday’s student settle comfortably in the United States.
Considering the constant employment of a person who studies at a higher educational institution, parents need to make sure that the investments are passive. Therefore, a profitable investment option is to finance the US economy through a regional center.
Immigration to the USA for a businessman
An entrepreneur wishing to obtain a Green Card under the EB-5 program must own a capital of at least 100,000 USD. Applicants who are counting on profit in addition to an investor visa should choose not passive investments through a regional center, but financing their own business.
If personal assets are not enough to qualify for the EB-1 program, the applicant may consider obtaining an L-1 immigrant visa – in this case, you will need to demonstrate entrepreneurial experience, establish a branch of the company in the United States and become its leader. After the official transfer to a new place of work, the foreigner must create several vacancies.
As an alternative, experts also recommend the E-2 nonimmigrant visa, which allows the foreigner to live and work in the country while investing in a US company. By growing a business and making a profit, an entrepreneur can subsequently become a participant in the EB-5 program. United States law does not provide for the possibility of providing E-2 visas to citizens of Russia and Belarus, but this problem can be solved by acquiring a second citizenship.
Taxation of residents in the States
Foreigners who are residents of the United States are subject to the same tax rules as citizens of the United States. An investor who received a Green Card under the EB-5 program must indicate in the declaration all financial income – dividends, royalties, salaries, funds from rental property and other types of income. Contributions to the state treasury are made on a progressive scale, in which the rates, depending on the amount of income, are 10, 12, 22, 24, 32, 35 and 37%.
Tax can be reduced through deductions provided by law. The amount of income received, and therefore deductions from it, is reduced by such items as expenses such as medical and dental care, contributions to charity, and mortgage payments. And after the tax amount is calculated, the payer can deduct offsets from it – expenses for education, child care, elderly parents or a disabled person. Agreements on the avoidance of double taxation have been signed between the United States and Russia, as well as other countries of the post-Soviet space.
Obtaining American citizenship through investment
An alien who participates in the EB-5 immigration program and receives a permanent resident card is eligible to become a US citizen. The investor and his family members can submit an application for citizenship 90 days before the end of the five-year period from the date of commencement of the initial residence permit.
An applicant for US citizenship by investment must meet the following requirements :
- age from 18 years;
- legal residence in the USA for 5 years;
- physical presence in the country for 30 months out of 5 years preceding the filing of the application;
- impeccable reputation and absence of problems with the law;
- commitment to the principles and ideals of the US Constitution;
- ability to read, write and speak English;
- knowledge of the history, principles and forms of government of the United States;
- readiness to take an oath of allegiance to the country.
The applicant submits the petition to the USCIS office located in the jurisdiction where he has resided for the previous three months.
Immigration of family members to the USA
The ability for an applicant to immigrate with close relatives is one of the benefits of the EB-5 program. The spouse and unmarried children under the age of 21 go through all stages of the investor visa process along with the main applicant. The participation of a candidate’s relatives in the program does not affect the amount of investment, but the United States Immigration Service charges them an application fee for processing documents.
Family members, like the main applicant, first receive an initial residence permit, from which all conditions are removed after 2 years. The right to work and study in the United States is granted to relatives after they become permanent residents of the United States.
Participation in the EB-5 program is a fast, simple and reliable way to become a permanent resident of the United States. Compared to other options, investment immigration has a number of advantages, including high chances of a successful outcome, no requirements for language knowledge and entrepreneurial experience, the opportunity not to implement the project, as well as return on investment.
You can be more likely to get the results you want when participating in the EB-5 program if you hire a qualified immigration lawyer to assist you. A competent approach from a specialist will help reduce investment risks, as well as ensure that the procedure complies with legal requirements and achieves the set goal.