While they have been criticized by some politicians, investment visas offer foreign investors a unique opportunity to both enter the United States lawfully and to boost the country’s economy. An EB-5 investment visa can be granted to investors who contribute a significant amount of money to an American business. There are two options to obtain an EB-5 visa: regional centers or a direct investment. The regional centers program is the more common route, but the direct investment option can be an appropriate and effective program for many individuals and their families looking to pursue lawful status in the U.S.
What Is an EB-5 Investment Visa?
An EB-5 investment visa is so called because participants receive the employment based fifth preference. According to the U.S. Citizenship and Immigration Services (USCIS), the government created the investment visa program in the early 1990s to help stimulate the economy. It is supposed that the money from these investors will create jobs, as well as infuse further capital into the national economy. To qualify for an EB-5 visa, an investor must:
Contribute at least $500,000.
In most cases, an investment of $1,000,000 is required, but in designated locales a smaller investment can be made. The government stipulates the amount based on areas in need.
Invest in a new commercial enterprise.
The investment must be made in a for-profit U.S. business. This business must be a new company, or an existing company that has been re-structured in such a way so as to satisfy government requirements.
Create a minimum amount of jobs through the investment.
The new business must create or preserve at least 10 jobs within a two-year period.
These requirements are the general rule for both the direct investment and the regional center programs, but there are certain specific differences that can be important to the investor.
What Is the Direct Investment Program?
The direct investment program is a more hands-on approach to a foreign investment. The investor typically identifies the business in which he will invest. Once the investment is made, the investor can apply for the visa, which would grant the investor, a spouse, and any children under the age of 21 conditional permanent residence for two years.
As the end of the two-year period nears, the investor can then apply to remove the conditions of his visa and those of his family. To be approved, the investor must prove that his investment has satisfied the conditions of the visa. If that is the case, the investor and eligible family members could then live and work permanently in the U.S.
Why Choose the Direct Investment Path?
There are a number of advantages to the direct investment program that may make if preferable to the regional centers option for some investors. When using a direct investment to obtain an EB-5 visa, the investor:
Can make an investment in multiple forms.
While a regional center investment must be a cash only investment, a direct investment can take many forms. Investors can meet the total capital requirment in cash, inventory, equipment, property, or more. This can make it easier to reach the required $500,000 or $1,000,000 investment.
Is an active participant in the business.
The direct investor must be an equity share investor in the business. The investor is typically involved in the day-to-day operations of the business and has an active voice in the company’s operations.
May have more investment options.
Or at least options with fewer restrictions. The government allows project managers to market their enterprises to investors with little to no preapproval. Those who wish to secure investors through a regional center must first gain approval from the appropriate governing bodies.
The Disadvantages of the Direct Investment Program
Like with most things in like, there is some give and take when choosing the direct investment program over the regional center option. Some requirements for direct investors are more stringent, including:
Jobs must be created directly.
Indirect creation of jobs, such as in businesses related to the work or in the same community and affected by the new commercial enterprise, cannot be counted toward the minimum of 10 new jobs. The new jobs must be created directly by the new enterprise within two years, a key factor in successfully removing the conditions of the initial visa.
The investor must live near the new commercial enterprise.
The direct investor is a much more active partner in the business than the regional center investor. With an active role in the business, the direct investor must also live near the location of the investment business. This may not be an issue for many investors, but it is a factor to consider.
Our Immigration Lawyers Can Help Secure a Direct Investment Visa
While the direct investment program is employed much less frequently than the regional center program, it does offer some distinct advantages for some investors. The investment visa program has been growing in recent years, with the government issuing the full number of EB-5 visas available for the past two years.
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