What is EB-5?
EB-5 is a program established by Congress in 1990 with the goal of encouraging investment from foreign sources with the specific objective of creating new and sustainable American jobs. The program is administered by US Citizenship and Immigration Services (USCIS).
In broad terms, EB-5 is composed of the following characteristics:
- An EB-5 investment visa is generally a method for foreign nationals to achieve a Green Card and ultimately Citizenship.
- There are two methods of executing an EB-5 investment; a Regional Center and Stand-Alone.
- Each separate EB-5 investment, whether Stand Alone or through a Regional Center must make an investment of $500,000 in a Targeted Economic Area (“TEA”) or $1,000,000 if the investment is not in a TEA. Additionally, each investment must create 10 full time jobs for a period of at least 2 years.
- Regional Center and Stand-Alone investments have different technical requirements. Chiefly, Stand Alone requires a more direct level of investment than a Regional Center.
- In order to qualify as a TEA the area must represent 150% of the national unemployment rate or be a rural area.
- Recently, the time frame for Regional Center approval has been significantly delayed while Stand Alone Projects have at the same time gone through in an accelerated pace. EB-5 Portfolio Management processes both methods but is currently focused on a hybrid model whereby large sums can be raised through the packaging of multiple Stand Alone locations. This has the benefit of quick approval and large capital raises with not being restricted by narrow regional boundaries. This model is a perfect fit for multiple small investments such as franchises or national chain restaurants.
- Invested capital is generally repaid after 5 years and the business owner then moves forward without the investor.
- Below is a very broad table of the main differences between the Regional Center and Stand-Alone paths within EB-5
|Job creation per $500,000 investment.||10- but within rigid geographical area||10|
|Job creation may come from indirect sources||Yes||No|
|Involvement in investment||Indirect||Direct|
|Mandatory local residence||No||Yes|
|Job creation per $500,000 investment.||Generally in advance||Determined after economic analysis|
For specific information we encourage you to visit USCIS’s EB-5 website.
Click here to view USCIS.