THe Us "immigrant Investor" visa: an investment for the future

 

 

Now has never been a better time for investors or entrepreneurs in South East Asia seeking to gain permanent residency, or a “Green Card,” in the United States. The increasingly popular EB-5 “Immigrant Investor” Regional Center Pilot Program is, perhaps, the most direct path to acquire a Green Card for those individuals who do not have immediate relatives in the U.S. or a firm job offer from a U.S. employer. This unique program offers benefits for both the foreign investor and the United States, creating a win-win situation for all parties. This program acts as a magnet for attracting foreign investment into many areas of the U.S. that need it the most, while allowing participating foreign investors the opportunity to become Lawful Permanent Residents and the prospects of a return on their investment.  A recent economic impact study spearheaded by the Association to Invest in the USA (IIUSA), the national not-for-profit industry trade association for the EB-5 Regional Center Program (the “Program”), suggests the EB-5 program continues to draw significant employment and economic gains with each passing year. In fiscal year (FY) 2013, the EB-5 Regional Center Program (“the Program”) contributed $2.0 billion in foreign direct investment (FDI) to various projects throughout the U.S. that promote regional economic development. In addition, the Program contributed $3.58 billion to U.S. GDP and supported over 41,000 jobs at no cost to the government or taxpayers.

The significant benefits of the program, most notably its clear path to permanent residency in what normally involves wading through a fluid and bureaucratic maze of immigration laws, have been known for some time by many Asian countries which have made the most proficient use of the program in recent years (South Korea, China, and Taiwan for example). Investors of many other nationalities, on the other hand, are quickly catching on to the unique investment opportunity, as the benefits associated with the EB-5 Pilot Program become more publicized.

The EB-5 Pilot Program is the most recent – and popular – version of the original EB-5 Immigrant Investor visa program. The U.S. Congress created the fifth employment-based preference (EB-5) immigrant visa category in 1990 for immigrants seeking to enter to engage in a commercial enterprise that will benefit the U.S. economy and create at least 10 full-time jobs.  The basic amount required to invest is $1 million, although that amount may be $500,000 if the investment is made in a "targeted employment area,” which is defined as a rural area or area of high unemployment. Of the 10,000 EB-5 investor visas available annually, 3,000 are set aside for those who apply under the Pilot Program established in 1993 involving a United States Citizenship & Immigration Services (USCIS) designated "regional center." Private and governmental agencies may be certified as regional centers if they meet certain criteria. A regional center is an entity, organization or agency that has been approved as such by the Service; focuses on a specific geographical area within the United States; and, seeks to promote economic growth through increased export sales, improved regional productivity, creation of new jobs, and increased domestic capital investment. Practically speaking, regional centers are organizations that allow many different investors to pool their funds in an effort to further their business objectives. Regional centers can be publicly owned, (by a city or state, for example), privately owned, or be a public-private partnership. As of the time of writing, there are more than 800 regional centers operating throughout the United States, involving many different business endeavors, including commercial real estate development; agriculture projects; development and operation of retirement communities; motion picture and television production projects; and, construction equipment manufacturing and sales, to name a few.  Regional centers are located in California, Florida, New York, Pennsylvania, and in nearly every U.S. state and territory, including Guam. While the original EB-5 “Million Dollar” option is available, the process for the regional center Pilot Program is less complex and may be a better fit for those investors who do not want the day-to-day responsibility of managing a business in the United States. By participating in a regional center, the requirement of creating at least 10 new jobs is met by a showing that as a result of the new enterprise, such jobs will be created directly or indirectly. Therefore, the investor receives the Green Card in exchange for his or her investment – not for individual efforts to run a new business. Approximately 90 percent of all EB-5 investors choose to invest through the regional center Pilot Program.

The regional center investor will generally earn a low rate of return with the ability to regain his investment after a certain period of time (at least five to seven years). The investor must manage the business; however, most of the regional centers involve limited partnership investments for which having the rights of a limited partner is considered sufficient to satisfy this legal requirement.

The process for participating in the EB-5 Pilot Program is relatively straightforward. An immigrant petition must be submitted to the U.S. Citizenship and Immigration Services (USCIS) proving that the applicant satisfies the regulatory requirements. Once the petition is granted, the investor must obtain an immigrant visa at the American consulate or, if already in the United States on a separate visa, apply for adjustment of status. Once this is completed, the applicant is granted conditional resident status. One reason for this “conditional” status is to deter fraudulent investments. After 21 but before 24 months later, the applicant must file another petition to remove conditions, verifying that the investment has been maintained and the required jobs have been created or saved. When the second petition has been approved, a permanent “Green Card” is issued to the investor. The investor may file an application for U.S. citizenship after being a Green Card holder for five years.

There are many benefits for an investor in the Pilot Program. For example, in return for the investment, a Green Card will be issued to the investor, spouse and unmarried children under the age of 21. While the immigration process for many individuals takes years and is wildly uncertain – under the EB-5 regional center Pilot Program, the processing time for acquiring the Conditional Green Card is generally between 12 to 21 months, although some cases have been processed in less time. Investors may live and work anywhere in the U.S., and there are no age, language, education, or previous business experience requirements - the investor must simply have the required net worth and capital. Under the regional center Pilot Program, the investor is not obligated to hire U.S. workers or manage day-to-day business operations. The Pilot Program is most appropriate for investors who see acquiring a Green Card as the real motivating factor for the investment. It may also be a viable option for retirees or successful businessmen and women who wish to reside in the U.S. and provide their children with access to many of the world’s top colleges and universities – taking advantage of much lower in-state tuition fees available to Lawful Permanent Residents. Each of the USCIS designated regional centers are different, and various administrative fees associated with each program normally range from $20,000 - $60,000. Therefore, the total cost of the actual program is $500,000 (investment) + $20-60,000 (administrative fees) + legal fees. One of the key factors in receiving permanent residency through the EB-5 program is that the source of funds must be obtained through lawful means (specifically, where and how the investor acquired the funds must be carefully shown to USCIS to establish that the investment was earned legitimately). A separate financial accounting prepared by an international accounting firm may be required. Generally, after 5 years, the investor may choose from one of several investment exit strategies. Each program is different and the requirements/exit procedures vary.

Copyright © 2017 by Michael B. Dye.  All rights reserved.

 

*The Law Office of Michael B. Dye is a full-service immigration law office located in Southern California, with satellite offices in Singapore and Indonesia.  Mr. Dye is a former U.S. diplomat, with extensive experience working and living throughout Asia, the Middle East, Europe and Latin America, and travels frequently to Indonesia, Singapore, Malaysia and throughout SE Asia.  The Office provides immigration assistance to potential investors seeking permanent residency in the United States, entrepreneurs seeking to establish business operations in the United States, and companies looking to expand their presence by establishing new offices in the United States. The Office also provides consular processing assistance, and advises clients from all nationalities in all visa categories. Mr. Dye is a member of the American Immigration Lawyers Association (AILA), and is admitted to practice law in various jurisdictions, including California and the District of Columbia. Mr. Dye is an active member of the American Chamber of Commerce in Japan (ACCJ), the American Chamber of Commerce in Singapore (AmCham Singapore), and the American Chamber of Commerce in Indonesia (AmCham Indonesia)