How Much Money Do I Need to Invest for an EB-5 Visa?
The EB-5 visa program is an excellent way for foreign investors to obtain permanent residency in the United States by making a significant investment in a new or existing American business that creates or preserves at least 10 full-time jobs for U.S. workers. One of the critical factors to consider before applying for the EB-5 visa program is the investment requirements. In this article, we will discuss how much money you need to invest for an EB-5 visa.
The minimum investment requirements for the EB-5 program are set by the United States Citizenship and Immigration Services (USCIS). The minimum investment amount required for an EB-5 visa depends on whether the investment is made in a targeted employment area (TEA) or a non-TEA.
TEAs are rural areas or areas with high unemployment rates. The minimum investment required for an investment made in a TEA is $900,000. The minimum investment amount for a non-TEA is $1.8 million.
It is important to note that the minimum investment amount only applies to investments made in new commercial enterprises. If the investment is made in a regional center, the minimum investment amount is the same, but the investment can be made in a new or existing commercial enterprise.
The investor’s capital must be “at risk,” meaning that there is a chance that the investment could be lost. The investment must create at least 10 full-time jobs for U.S. workers within two years of the investor’s admission to the U.S.
Investment Options for EB-5 Visa Program
There are two investment options for the EB-5 visa program: direct investment and investment through a regional center.
Direct Investment
Direct investment involves investing directly in a new or existing commercial enterprise. This option requires the investor to take a more hands-on approach to their investment. They will need to manage and oversee the business to ensure that it meets the EB-5 program’s requirements.
Direct investment can be an excellent option for investors who have experience in running a business and want to have more control over their investment.
Investment Through a Regional Center
Investment through a regional center is a popular option for investors who want a more passive investment approach. A regional center is a USCIS-approved entity that promotes economic growth and job creation in a particular geographic area. Regional centers pool investment funds from multiple investors and use them to fund development projects that create jobs.
Investing through a regional center has several advantages. Firstly, it allows investors to count indirect job creation towards the ten-job requirement. This means that investors can invest in projects that create jobs for US workers indirectly, such as construction jobs, transportation jobs, or other jobs that support the project.
Moreover, Approved Regional Centers can offer investors a higher return on investment than direct investments, as they can spread their funds over multiple projects and reduce the risk associated with investing in a single project.
Investment Escrow
Investment escrow is a vital aspect of the EB-5 program. To apply for an EB-5 visa, the investor must show that they have made the required investment in the new commercial enterprise.
The investment escrow is a third-party account that holds the investor’s funds until the USCIS approves their I-526 petition. The escrow agreement ensures that the investor’s funds are only released to the new commercial enterprise if the I-526 petition is approved.
If the I-526 petition is not approved, the funds will be returned to the investor. Investment escrow provides investors with an added layer of security and ensures that their funds are not misused.
Minimum Investment Amounts
As of November 21, 2019, the minimum investment amount for the EB-5 program is $900,000 for investments made in targeted employment areas (TEAs). TEAs are designated by the state government as areas with high unemployment rates or rural areas.
For investments made outside of a TEA, the minimum investment amount is $1.8 million. These amounts are set by the U.S. Citizenship and Immigration Services (USCIS) and are adjusted periodically based on inflation.
It is important to note that the minimum investment amounts not the only requirement for the program. The investment must also create or preserve at least 10 full-time jobs for U.S. workers within two years of the investor’s admission to the U.S.
Location of the Business
As mentioned earlier, the minimum investment amount may vary depending on the location of the business. This is because the USCIS has designated certain areas as targeted employment areas (TEAs), which are typically areas with high unemployment rates or rural areas.
Investments made in a TEA require a minimum investment of $900,000, while investments made outside of a TEA require a minimum investment of $1.8 million. The USCIS has made this distinction to encourage investment in areas that are in most need of economic development.
To determine whether a particular area is designated as a TEA, investors should consult with the state government in which the business is located or a reputable EB-5 immigration attorney.
Type of Business
The type of business in which the investor makes their investment also plays a role in determining the investment amount required for the EB-5 visa program. The business must be a new commercial enterprise or an existing business that is restructured in a way that results in a substantial change in the net worth or number of employees.
The USCIS defines a new commercial enterprise as any for-profit activity formed after November 29, 1990, or any for-profit activity that was formed on or before that date but was restructured in a way that resulted in a new commercial enterprise.
If the investor is investing in a new commercial enterprise, they must invest at least $900,000 in a TEA or $1.8 million outside of a TEA. However, if the investor is investing in an existing business that is being restructured, the investment must increase the net worth or number of employees of the business by at least 40 percent.
It is important to note that the EB-5 program requires that the investor’s capital be “at risk.” This means that there is no guarantee of return on the investment and that the investor’s capital is subject to the success or failure of the business.
