The EB-5 classification is one of the most interesting and exciting areas of immigration law, but it can also be one of the most complex, especially due to severe visa backlogs experienced by EB-5 investors from mainland China India, and Vietnam. Planning is critical, as missteps can be very painful for the investor—and difficult to undo.
This classification is not for everyone. Based on recent estimates, investors born in China, Vietnam, and India will face the following wait times to obtain conditional permanent resident status, assuming they invested around the end of fiscal year 2018: 14 years for Chinese investors, 7.2 years for Vietnamese investors, and 5.7 years for Indian investors. For us, if you are from China or Vietnam, the EB-5 should be a last resort unless the investor is willing to wait a long time. Still, an EB-5 might still be a viable option if you are from India, including some who currently already have an EB-2 or EB-3 preference petition approved, depending on their EB-2 or EB-3 priority date. However, for every other qualifying country, the EB-5 can be a quick path forward. Therefore, if you have an option to obtain citizenship from a non-backlogged country, this process could work for you.
However, this is a highly scrutinized classification; therefore, it’s important to understand that for a direct investment, you must have a strong business need to invest in the U.S. In other words, you intend to actively engage in a U.S. business and have strong business reasons for doing so. Having only a strong personal desire to retain control of the investment funds without having a business need many not work. If you intend to spend most of your time in the U.S., have the knowledge of the business you want to be involved in, and understand the economics and dynamics of getting a new business off the ground, this path may be a good one for you. If not, we would look at investing in a Regional Center, which is a more passive way to invest.
A regional center is “an entity, organization, or agency” that USCIS has approved as a designated Regional Center for the EB-5 Immigrant Investor Program. They focus specifically on a defined geographic area of the United States, and positively affecting the general welfare and economy of that area by attracting capital investment. The regional centers structure and manage the investment, including the job creation requirement as well as others. You invest the money and receive a return on your investment.
Generally, the requirements are that you minimally invest $1.8 million (from $1 million) or $900,000 (from $500,000) in a targeted employment area (TEA). A TEA is a rural area or an area that has experienced high unemployment (defined as at least 150% of the national average unemployment rate). You must invest in a new commercial enterprise that was established after Nov. 29, 1990, or if it was on or before Nov. 29, 1990, it was restructured in a way that a new enterprise resulted, or it is being expanded through investment (40% increase in net worth or number of employees). The enterprise must create full-time positions for at least 10 qualifying employees. These must be direct creating for a direct investment, but can be direct and indirect for investment in a regional center.