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Last Updated On: September 29, 2023 | Published On: February 24, 2020
The EB-5 Immigrant Investor Program is an employment-based visa category which affords immigrant investors the eligibility to become permanent residents in the U.S. Yearly, a total number of 10,000 EB-5 visas are made available by the USCIS since its inception in 1992. An understanding of the EB-5 investment amount and the overall application process is key to ensuring a successful application for your green card and permanent residency.
Before discussing the EB-5 investment amount, let’s discuss the steps involved in this type of visa application.
To qualify for the program, applicants are required to invest either $500,000 or $1,000,000 depending on the location of their investment. It is categorized under two classes which are Basic Program or Regional Center Pilot Program. You can invest in either of the two programs.
However, the total cost of obtaining this visa has been one of the most frequently asked questions by many prospective investors. What is the difference between a $500,000 and a $1,000,000 investment?
Are other charges involved apart from the substantiated investment amounts? What are the accepted sources of funds for the program? We’ll dive into the answers to all these questions and other issues relating to the EB-5 investment amount in this post.
As a benchmark, EB-5 visa applicants are required to invest the $500,000 or $1,000,000 in a new commercial enterprise founded after Nov. 29, 1990. If the investment has been established on or before Nov. 29, 1990, it must be restructured, organized, or expanded to meet the program specification.
The capital doesn’t necessarily have to be in cash. It could be in equipment, inventory, property, or some other tangible asset You can also use cash equivalents and indebtedness secured by assets owned by you and valued at the U.S. dollar market value to be of equal worth with the investment capital. What determines the investment amount is whether you are going to invest in a Targeted Employment Area (TEA) or not.
Besides the main investment capital of $1,800,000 or $900,000, the EB-5 visa process will cost you some additional fees. These side expenses need to be factored in as part of your EB-5 cost when planning your investment. They include:
The I-526 form is the first and one of the most crucial components of the EB-5 visa. It is filed to show your readiness to become an investor under the program. You are to file an I-526 as an EB-5 entrepreneur to petition the USCIS for immigrant status in the U.S.
The form is for those who have invested or are actively in the process of investing the required $900,000 or $1,800,000 EB-5 investment amount in a new commercial enterprise (NCE). The filing fee for the I-526 is $3,675.
The I-485 form is for EB-5 immigrant investors who are already in the U.S. to adjust their resident status to become conditional permanent residents. You, as the principal applicant, and each of your dependents must file this form once your I-526 petition has been approved. This can be filed by your immigration attorney on your behalf.
The purpose of the form is for the USCIS to determine your eligibility for permanent residency. You, therefore, will need to provide supporting documents such as your certificates of birth, marriage, and divorce (if any), criminal history, medical examination report, a copy of passport page and non-immigrant visa, and a recently taken photo of yourself. Other information includes evidence of eligibility, biographic information, and fingerprints. The filing fee for the I-485 is $1,140.
As part of your EB-5 process, you will need to file a petition using an I-829 to remove the conditions on your permanent resident status. You can file this two months before the expiration of your current conditional permanent resident status, which usually has a two-year validity period. The USCIS filing fee for the I-829 is $3,750.
USCIS usually requires biometric evidence of visa applicants to run the necessary background security checks to confirm your identity. Your photograph, fingerprints, and signature will be collected. The biometrics fee for an applicant is $85 and the same amount must be paid for each of your dependents.
It is not mandatory to hire an attorney. However, with the complexities associated with EB-5 visa processing and investment, it is never a good idea to attempt doing it yourself. An immigration attorney will help file and your EB-5 case and advise you throughout the process. The EB-5 visa petition may only have a few pages, but there are many supporting documents and questions where an expert’s help will be needed to avoid costly mistakes.
If you are engaging in direct investment, you may not need to pay an administrative fee. But for regional center EB-5 investment, this payment is required. The fee varies among different regional centers, and it is usually determined by the nature of your EB-5 project. Some of the services the administrative fee will cover include paying the consultants like lawyers, economist, business brokers, and other experts who oversee the compliance and marketing aspects of the EB-5 project. Depending on the regional center, the fee could be anything from $30,000 to $60,000.
As an EB-5 visa applicant, have two investment options to choose from. You can either invest through an EB-5 regional center, or you can opt to be a direct investor. If you opt to be a direct investor, you must find a project to invest in and oversee the project by taking a direct managerial role in it. Direct investment is great for those investors that want control of their investment as well as the project that you invested in.
EB-5 investor applicants can also invest in an EB-5 regional center. This option is ideal if you are interested in EB-5 immigration goals as opposed to getting the maximum return on your investment. Since regional centers obtain designation from the USCIS to administer investment projects, the centers are required to adhere to USCIS EB5 program regulations. This means you won’t be responsible for meeting the requirements of the program. As a result, regional center investment suits investors who want to be more hands-off without being responsible for the management of their investment.
Like any other investment, you should perform due diligence before investing your $1,800,000 into a project that is run by a regional center. Firstly, you need to ensure that the project will create a minimum of 10 full-time U.S jobs. You also need to investigate the background of the other real estate development investors involved in the project, the project’s financial and exit strategies, the overall business plan of the project, and also review the offering package very carefully.
When funds are available for a project, regional centers usually have plans to buy investors out after five years. The viability of your project will determine if you will get a return on your EB-5 investment or not. You should also consider all risk factors such as the EB-5’s debt and the project’s total debt.
If the project has a mortgage, ensure it is paid fully before EB-5 investors can obtain funds because if it goes bankrupt, you will lose your money and also not receive a permanent green card.
Just like other U.S. visa programs, the source of your EB-5 investment capital is subject to scrutiny. The USCIS will want to know if the fund was lawfully acquired and whether it truly belongs to you. Preferably, the principal investor should be able to demonstrate the ownership of the money.
Applicants who don’t have the $900,000 or $1,800,000 investment amount in cash may use loan provided it is a secured loan. In the past, unsecured loans were allowed by the USCIS for EB-5 investment funding. However, for the past few years, that has stopped. You can now only use a secured loan.
For a loan to be accepted as EB-5 investment capital, it has to meet the conditions set by the USCIS. For example, it must be secured by an asset that has the same or higher value as the amount of the loan, and the asset must be owned by you.
In addition, you must be the principal borrower of the loan and be personally liable for the loan repayment. You are not allowed to offer any assets of the EB-5 enterprise as security for the loan, or offer your ownership share in the EB-5 enterprise entity as security.
A private loan (from friends and family) may also be used as your EB-5 source investment amount. However, all the conditions stated above must be met, and evidence showing your private lender lawfully made money must be provided. You may also use gifted funds.
Whatever option you choose as your source, it is mandatory that your investment capital is put at risk, (i.e. you have already irrevocably invested the money or actively in the process of investing it). If you are found to be shielding your capital from risk, your petition will not be honored.
A limited partnership means an investment with two kinds of partners – general partners and limited partners. While the general partners are more active in the day-to-day management of the business, the limited partners usually make only financial contributions. A limited partner has limited control of capital allocation and limited liability in the investment.
It is very common to see many EB-5 investors choose this route to actualize their dream of permanent resident status in the U.S. To become an EB-5 limited partner, you can invest in an EB-5 partnership enterprise. You need to, however, review the partnership agreement of the business to know the benefits and risks attached to your investment.
EB-5 green card application denial or rejection may happen for different reasons, which include failure to provide the required documentation for your EB-5 source of funds or presenting false evidence. Your application may also be denied if there is missing information in the forms you complete or if you haven’t put your investment “at-risk” as required by the USCIS.
While denial may cause a delay, it may not necessarily mean the end of your EB-5 visa dream. Some of the options available to you include filing a legal motion, appealing, or refilling. Your immigration attorney will be able to review the denial note and advise you appropriately.
Investing $900,000 or $1,800,000 in a project should be done with great caution and planning. A single mistake in filing and completing the process can be very costly. You will need the assistance of an immigration attorney to help you file your petition and guide you through the process.
VisaNation Law Group’s expert EB-5 attorneys are highly experienced and will help you file your petition and take you through the process. You can book a consultation with one of the immigration attorneys by filling out this contact form.
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