Recently, the EB-5 visa has become extraordinarily popular in China. This visa offers Permanent Residence to the applicant, his or her spouse and to the applicants children under twenty-one years of age. And it comes with a hefty price tag: investment of at least $500,000 and up to $1 million in the United States. There are two particular types of EB-5 opportunities. The first is the EB-5 Direct Investment, or Traditional EB-5 program. The second is the EB-5 Regional Center Pilot Program. Both programs share the same requirements put forth by the United State Citizenship and Immigration Services (USCIS) and timeline for removal of conditions for permanent residence.
The Traditional and Regional Center Programs require that in order to be approved for an EB-5 visa, a foreign investor must invest $1 million into a new commercial enterprise that creates ten full-time jobs for U.S. workers over the course of two years. USCIS grants conditional resident status after the investor demonstrates, through an approved USCIS Form I-526, that the investment has been made and the requirements of the program have been met.
An investor may also invest $500,000 in a Targeted Employment Area (TEA) . Targeted employment areas are defined as high employment areas where the unemployment rate is 150% above the national average and may include rural areas. Investors have to demonstrate to USCIS that the area is a high unemployment and can usually do so by contacting the State in which he or she plans to invest for information about TEAs located in that state.
The Traditional EB-5 program requires the investor to set up a business in the United States that meets the requirements of the program. The Regional Center Program is a pilot program that allows for the creation entities not created by the investor which are designed to promote economic development in a particular geographic area. The Regional Center creates and promotes projects that are supported by the investment required by the EB-5 program.
In order to gain permanent residence status, the investor files USCIS form I-826 during the ninety days preceding the second anniversary of the granting of conditional residence. In order, for conditions to be removed, the enterprise has to have met the requirements of the statute, especially in the realm of job creation.
Which Program is right for me?
While similar in several ways, the Traditional EB-5 and the EB-5 Regional Center programs are also distinct and that may influence whether or not it is the right choice for an investor. The issue of job creation is paramount.
Both programs require the creation of ten full-time jobs for qualified U.S. employees. The main difference between the two programs is how new jobs are counted. Under the traditional model, the jobs have to be directly created by the enterprise and be actual recognizable jobs, while under the Regional Center Model, jobs created indirectly by the project may be included to meet USCIS’s requirement for job creation. Economists are often retained in order to calculate the number of indirect and direct jobs are created. This difference may encourage the investor who has the amount of capital necessary for the investment and a solid plan for a small business to invest in a Regional Center because of the very real concern that the business will not meet the job requirements of the program.
Many investors choose the Regional Center model for the reasons explained above. The information above is merely for informational purposes. It is not legal advice. The immigrant investor with questions regarding the EB-5 should consult an immigration attorney and other related professionals before deciding between the two options.
About Robert Maher
Robert J. Maher is a New York City based immigration attorney. He has lived and worked in China and is focused on helping business and individual clients from China navigate the immigration system of the United States. He can be reached at 212-939-7548 or RMaherEsq@gmail.com