Top Secrets For Non U.S. Residents To Secure A New Future Through This Foreign Investor Visa Program

The EB-5 Visa Program offers a gateway to a green card for qualified foreign investor visa petitioners.

“The program reached capacity for the first time in August 2014 when the State Department stopped issuing EB-5 visas until the beginning of the next fiscal year, October 2014.” http://travel.state.gov/content/dam/visas/Statistics/Immigrant-Statistics.

The Immigrant Investor Program (“EB-5”) was created by Congress in 1990 and is administered by the U.S. Citizens and Immigration Services (“USCIS”) to provide certain foreign investors with a potential avenue to lawful permanent residency in the United States through a foreign investor visa. To qualify, investors must demonstrate that  their investments provide capital for economic development and job creation.

The EB-5 program awards residence visas to foreign investors and their families who make a capital investment  of at least $500,000 in a new commercial enterprise in the U.S.

In recent years in New York City some major Real Estate developers have raised capital from foreign investors through the EB-5 foreign investor visa program to finance massive projects. The program has been hugely successful in offering an alternative to traditional sources of financing.

TWO PATHWAYS TO THE EB-5 FOREIGN INVESTOR VISA: DIRECT INVESTMENT OR THROUGH AN EB-5 REGIONAL CENTER

The investor profile will determine the best option for the EB-5 investor.

THE DIRECT INVESTOR: INDIVIDUAL EB-5

The Individual EB-5 investor has profit maximization as the primary goal and intends to start and manage their own business in the U.S.. The investment is the driving force behind his or her wanting to come to the U.S. The standards for the individual EB-5 petition are very restrictive and the direct investor is solely responsible for adhering to  USCIS EB-5 program regulations.

MAIN REQUIREMENTS OF QUALIFYING INVESTMENT:

• Investment must be in a New Commercial Enterprise.
• Business must create or preserve at least 10 full-time jobs.
• Investment of a minimum of $1,000,000 in the U.S.

THE REGIONAL CENTER INVESTOR

The Regional Center EB-5 Investor has immigration as a primary goal rather than profit maximization. The intent is not to start and manage a business but rather to use a structured investment program in the Regional Center EB-5.

Regional Centers receive designation from USCIS to administer EB-5 investment projects. Regional Centers are responsible for adhering to USCIS EB-5 program regulations relieving the investor from meeting program requirements.

Many of the complications associated with Individual EB-5 petitions are eliminated for the investor through a designated Regional Center. 

THE DIRECT EMPLOYMENT REQUIREMENT

The Regional Center is allowed to create indirect employment rather than the requisite “direct employment creation” by an individual investor. Regional Centers can claim “indirect jobs” that result from the large investment of combined capital. An individual EB-5 petition requires proof of “full-time employment” as direct employees of ten workers. The Regional Center can qualify based upon indirect employment creation generated in the community through the regional center investment utilizing economic models of job creation methodologies for determining indirect job creation.

CAPITAL INVESTMENT REQUIREMENTS: MINIMUM INVESTMENT AMOUNT

For the Individual Investor, the minimum qualifying investment in the U.S. is $1 million. Most of the approved Regional Centers have been approved as “targeted employment area” investments, thus qualifying for the reduced $500,000 investment requirement.

The requirements for the investor to prove the lawful source of his or her investment funds is the same for individual and regional center EB-5 petitions. Investment capital cannot be borrowed.

“Capital means cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur is personally and primarily liable and that the assets of the new  commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. All capital shall be valued at fair-market value in United States dollars. Assets acquired, directly or indirectly, by unlawful means (such as  criminal activities) shall not be considered capital for the purposes of section 203(b)(5) of the Act. ”  http://www.uscis.gov/eb-5″

THE EB-5 INVESTOR MUST BE “ENGAGED IN A NEW COMMERCIAL ENTERPRISE”

EB-5 regulations require the investor to be involved in the management or policy making of the enterprise as opposed to maintaining a “purely passive role”.  An Individual EB-5 petitioner must prove this on a case by case basis for a foreign investor visa.

For the EB-5 Regional Center investor the regulation deems a limited partnership where the investor is considered sufficiently engaged in the management of the enterprise without the necessity of the investor committing to any specific amount of time or engaging in day-to-day management. Most Regional Centers are limited partnerships and if the investor is a limited partner the “engagement” requirement is satisfied for a foreign investor visa through the EB-5 program.

Because the standards for Individual EB-5 petitions for a foreign investor visa are so restrictive, the number of EB-5 Regional Center petitions has risen markedly and now exceeds 90% of the total number of EB-5 petitions filed.   

CAVEAT EMPTOR (AS ALWAYS)

The fact that a business is designated as a regional center by USCIS does not guarantee the legitimacy of The EB-5 Regional Center nor the investments represented by the center.

The USCIS, the SEC, nor any other government agency has necessarily vetted and approved the investments offered by the EB-5 Regional Center.    

If the investment through the EB-5 Regional Center turns out to be fraudulent in nature, the petitioner for the foreign investor visa may lose both capital invested and the opportunity of obtaining lawful permanent residency in the United States. 

BEWARE OF “GUARANTEES”

“Death and taxes.” (Benjamin Franklin)– the only guarantees the foreign investor visa petitioner can count on.

TYPICAL GUARANTEES OFFERED BY THE SCAMMERS:

• Guaranteed Returns. Money invested through the EB-5 Foreign Investor Visa program must be “at risk”. If there is a guaranteed return,  risk is negated and therefore the investment does not qualify. A competent and trustworthy EB-5 Regional Center offering such a risk free investment for a foreign investor visa petition should be viewed with suspicion.
• Guaranteed Permanent Residency. There is no guarantee that the USCIS will grant a petitioner for a foreign investor visa a conditional visa (obtained through the I-526 petition) or the removal of conditions on lawful permanent residency (obtained through the I-485 Adjustment of Status). USCIS reviews each petition carefully and denies those that do not meet the eligibility requirements for a foreign investor visa. Guarantees of approval offered by an EB-5 Regional Center are a sign of fraud.

CONCLUSION

The EB-5 Immigrant Investor Program offers a pathway for foreign investors to obtain a foreign investor visa and lawful permanent residency for the foreign investor and his/her family. Whether the foreign investor has permanent residency in the U.S. as a primary goal or his/her intention is to start and run a business in the U.S., the EB-5 Program provides a way.

The foreign investor must carefully consider the various options available in deciding which path to choose leading to the foreign investor visa. The EB-5 petitioner would be well advised by a team of professionals including: an EB-5 Immigration Attorney, a Securities Law Attorney, an Economist, a Business Plan Writer and an Investment Real Estate Broker.

As with any investment opportunity, due diligence is paramount.

 

 

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