The US has a diverse and stable economic environment with plenty of opportunities for entrepreneurs and investors who want to cut themselves a slice of the American Dream. But this doesn’t mean that just anyone can get in.
However, if you have between $1.8 million and $900,000 in seed money and are willing to invest them into creating your US business, then you may be eligible for the EB5 Immigrant Investor Pilot Program.
The EB5 program is overseen by U.S. Citizenship and Immigration Services (USCIS) and offers permanent resident status to foreign investors (and their families) who qualify. As you can imagine, the process is complex, but if you have a profitable investment that follows U.S. Citizenship and USCIS requirements, things should be looking good.
Still, if you plan on applying for an EB5 Green Card, there are a few things you need to consider. Here are some of the most important ones:
It Is a Complex Process
Even though it’s easy to find and read the rules and regulations of EB5 investments, the reality in the field is a bit different. Foreign investors are usually not aware of many local and state regulations that could impact the development of their projects.
There are various paths to take, such as investing in an EB5 center project where you are an indirect investor (the resources are pooled and directed to specific projects), or you become a direct investor and decide how the funds will be spent.
Furthermore, if you don’t know the market, you may have trouble choosing a project that has true potential, which can lead to the rejection of your application. This is why most foreign investors look for guidance and help by selecting a reliable EB 5 investment partner who can provide accurate information and advice.
Such a partner also comes in handy when putting together the documentation process, which is not as straightforward and easy to understand as some would like.
Pay Attention to Changes in Regulations
The program was first launched in 1990, and its purpose was to boost the US economy and create and sustain American jobs by attracting foreign investments. Since then, things have changed quite a bit. Plus, the program is constantly reevaluated to make sure it still fits its purpose.
For instance, in 2019, the USCIS decided that the investment amounts would change every five years to keep track of inflation. Also, the reauthorization of the Regional Center Program brought forth new rules and regulations. One such change specifies that direct pooled investments of more than two investors are no longer acceptable.
So before you start devising your project, make sure to check the USCIS eligibility requirements and see if it’s still a good fit for your plans.
Real Estate Projects have an Edge
Real estate construction projects are some of the most popular under the EB5 because they require substantial investments and create a multitude of jobs in the area (job creation is one of the requirements under the EB5).
Also, a construction project guarantees that the requested number of jobs will be created for the time required by the USCIS (2 years). This aspect is important because your investment doesn’t matter much if you don’t create enough employment opportunities.
When you work on a real estate project, you’re most likely to be a part of an EB5 regional center project, which is allowed to count direct, indirect and induced jobs. However, under the new rules, it is more difficult to qualify for the lowered investment amount. That’s because the new Targeted Employment Area (TEA) rules are more strict.
This means that if you really want to invest in a real estate development project in one of the US’s big cities, you’ll have to prepare the standard amount, which is often too high for many investors.
There Are Options
Considering the risks involved (losing your Green Card and at least $900,000), it’s normal to feel anxious. But if you do your homework and talk with several experts in the field, the chance of choosing a viable project increases exponentially.
For instance, the current economic environment helps create opportunities for projects outside big cities (which used to be the best places to open a business). This is a great thing since past EB5 projects were indirectly conditioned by this aspect (because of the need to create sufficient employment opportunities).
But, with more people willing to work remotely nowadays, there are a lot of interesting tech projects to develop that are not location-dependent. This means you can invest in TEA locations (for lower investment levels) without worrying you won’t have enough people to support your project.
In Summary
The EB5 program will continue to help foreign investors achieve their desire to taste the American Dream while also working to help improve underdeveloped areas in the country. It’s a win-win scenario that should bring positive progress for everyone involved.