EB-5 Immigrant Investor Program
What is the EB-5 program?
Updated March 7, 2022
Created by the U.S. government in 1990, the EB-5 Immigrant Investor Program allows foreign nationals and their families to become permanent residents via a green card in exchange for investing in businesses that create jobs for U.S. workers. In some cases, this is the quickest way to get a green card, which typically is issued through a lottery, family-based relationships or an employment-based sponsorship. The EB-5 program gets its name from the employment-based fifth preference visa that participants receive.
The EB-5 applicant is required to invest in a new or existing U.S. commercial enterprise that is considered “at risk” and that creates 10 full-time U.S. jobs.
- If the project is in a Targeted Employment Area or TEA, which is defined as a rural area or an area with high unemployment of at least 150% of the national average, a $500,000 investment is required. (In a November 2019 revision in the program implemented by the Department of Homeland Security to account for inflation, the figure was raised to $900,000, but in June 2021, it reverted to $500,000 after a ruling by the U.S. District Court of the Northern District of California.)
- If the project is not in a TEA, the required investment, as of June 2021, became $1 million; under the November 2019 EB-5 Modernization Rule, it had been raised to $1.8 million.
In addition to the $500,000 or $1 million, there are other fees associated with the EB-5 visa. When administrative, legal and processing fees are included, additional costs can add up to $100,000 to $150,000.
Although the investments are required to be in at-risk commercial projects, that doesn’t mean that the enterprise itself has to be risky. Investors are allowed to structure the deal in ways that mitigate risk.
The EB-5 Immigrant Investor Program allows foreign nationals and their families to become permanent residents via a green card in exchange for investing in businesses that create jobs for U.S. workers. Blake Wheeler/Unsplash
The types of commercial projects that qualify, regardless of the geographical location, include everything from hotels and stadiums to casinos, convention centers, real estate developments and office buildings.
To enhance the impact of the EB-5 program in defined geographic areas, the U.S. Congress created the Immigrant Investor Program, which is also known as the Regional Center Program, in 1993.
Under this program, approved “Regional Centers,” that is those designated by the U.S. Citizenship and Immigration Services, set aside EB-5 visas specifically for investors. This allows investors to pool EB-5 money and utilize job-creation models instead of managing the EB-5 project themselves. Nearly all investors choose to invest through a Regional Center.
The Regional Center Program also makes it easier for investors to fulfill the 10-jobs requirement by allowing the center to directly or indirectly create the full-time positions instead of requiring the commercial enterprise to employ them. Indirect workers are defined as those who hold jobs outside the project but that were created because of it.
(The Regional Center Program expired on June 30, 2021 when Congress failed to renew it. It has expired in the past and can be reauthorized by Congress at any time. Various groups are lobbying for its reauthorization. The U.S. Citizenship and Immigration Services has not indicated how it will handle the current lapse.)
Although the entire EB-5 process can go on for five to eight years depending on the applicant’s country of birth, typically in 1 1/2 to two years, the investor, the investor’s spouse and unmarried children who are younger than 21 are able to get conditional green cards, which allow them to work, live, travel, start a business without immigration restrictions on the project and go to public school in the U.S. They also can enter and exit the country as permanent residents.
The EB-5 process has stringent requirements, and the length of time it takes to complete can vary by a number of factors, including the applicant’s country of birth and U.S. Citizenship and Immigration Services processing times.
How do you apply for the EB-5 program?
Applicants must document the source of the investment money, which must be liquid and placed in an escrow account. Eligible funds include savings from salary, earnings from business ownership, proceeds from the sale or mortgage of a real estate property, gifts and inheritance.
Once the documentation is complete, the investor submits an I-526 petition detailing the investment plan and the capability of the investor to fulfill its requirements to the U.S. Citizenship and Immigration Services, which reviews each application case by case but not necessarily in the order received.
Those who are living outside the U.S. are required to go through a visa interview with a U.S. Department of State consular abroad and when approved can move to the U.S.
Upon approval of the I-526, those living in the U.S. on nonimmigrant visas such as the employee H-1B or the student F-1, each of which must be renewed as often as every year to three years, file an I-485 Adjustment of Status to seek permanent resident status.
After the green card gets the green light, applicants receive a two-year conditional residency. When those two years end, if 10 full-time jobs are created with the investment and the money has been invested “at risk,” a permanent green card is issued and the investment money is returned, with interest, depending on the project and its repayment terms.
Not all investment projects, however, are successful and sometimes the investor doesn’t get the principal back or earn interest.
During the last 90 days of the conditional residency, an I-829 petition is filed to remove permanent residency restrictions, and once it is approved and the investor has lived permanently in the U.S. for four years and nine months (starting from the time of conditional residence status), U.S. citizenship may be applied for.
The U.S. isn’t the only country that offers an immigrant investor program. Canada, Portugal and the United Kingdom are among the others that have established them to spur local economic activity. The costs and requirements in each country vary.