The EB-5 investor program is a unique visa classification that offers numerous benefits to foreign investors from all over the world. Apart from providing lawful permanent residence to its eligible applicants, the program has also helped many participants and their families achieve both financial freedom and U.S. citizenship.
Since its inception in 1990, the EB-5 program has opened up foreign national investments in different sectors of the economy across the United States. These opportunities continue to expand by the day, creating more business investment ideas to tap into. Here are some different EB-5 investment ideas to help you make the best choice when investing your capital.
EB-5 Visa Overview
The most crucial requirement for the EB-5 green card is the investment amount of $500,000 or $1 million, depending on the location of the investment within the U.S. However, starting on November 21, 2019, the minimum investment amount will be raised to $900,000 and $1.8 million according to the new EB-5 final rule. All applicants must prove that they have this required amount before their visa petition can be approved.
After obtaining the visa, an EB-5 project must create or preserve 10 jobs. For this reason, you need to choose an industry with the best prospects for meeting the investor program requirements.
The Best EB-5 Investment Ideas
Your choice of project will determine your business trajectory and will determine your EB-5 permanent green card approval at the end of your initial conditional status. Investing in the right sector will not only help you make a profit, but it will also ensure the fulfillment of all other EB-5 requirements. The following are some of the business ideas that can help you:
EB-5 Real Estate Investment
Putting your capital in the United States real estate market is one of the best EB-5 investment ideas that you can leverage as a foreign national investor. Real estate has been one of the most profitable and preferred sectors for many EB-5 investors since the beginning of the program.
As reported by Forbes, the improvement of the economy we’ve seen over the past ten consecutive years has led to increased growth and stability in the U.S. sector, and the biggest winners have been homeowners.
In the first quarter of 2019 alone, $15.8 trillion in home equity was recorded nationally. This is more than two times the $6.1 trillion realized in the first quarter of 2009. The growth in the sector has helped many EB-5 investors built wealth through direct and indirect investments.
As an EB-5 investor, you may decide to invest in a real estate-focused regional center, where the active management, construction, land entitlement, oversight of the building project, development, documentation, and all other the groundwork will be carried out by the handlers at the center while the cash flow and profit-sharing formula would be discussed and agreed upon at the initial stage.
The other way is to buy a U.S. property as your EB-5 business residence. In this case, you will be assuming an active role in the day-to-day management of the business operation. This will guarantee you a two-fold benefit because you will be making profit continually from your real EB-5 investment just as the property will also keep appreciating in value.
Healthcare Sector for EB-5 Investors
The healthcare industry is another lucrative market EB-5 investors can invest in. According to Axios, in the second quarter of 2018 alone, the healthcare industry in the United States earned more profit than during any other quarter in the previous year.
Different companies within the sector earned profits that were beyond Wall Street estimates, thereby raising profit estimates for the rest of the year. Pharmaceutical companies rank high among the most profitable subsectors. Factors such as sales of prescription drugs, medical devices, tests, and procedures account for the growing profits.
By August 2nd, 85 publicly traded healthcare companies had made $545 billion dollars of global revenue. In the U.S., healthcare spending takes up 18% of the GDP. This presents a massive opportunity for investors.
The health sector is very large, comprising many different industries ranging from pharmaceuticals and hospitals to health insurance and medical research. Each of these industries attracts excellent ROI as most Americans are dependent on one or more of these industries.
This sector also ranks among the highest paying jobs in America. This naturally attracts job seekers who are more than eager to fill the vacancies created by any investment. As an EB-5 investor in the health sector, meeting the job creation requirement and generating income will be highly feasible.
EB-5 Investment in the Hospitality Industry
The hospitality sector is another business that is very alluring to EB-5 investors. Hotels provide services such as accommodation, meals, and entertainment for people—especially travelers. The hotel business is attractive to EB-5 investors because of its low-risk and profitability.
Many hotels in the U.S. are presently owned by immigrants, mostly from China and India. There are also many hotels of different classes such as business class and luxury that are for sale in the U.S. either because the owner is retiring or wants to pursue other interests. Purchasing here is a good way to hit the ground running as an EB-5 investor, which will allow you to meet the requirements for unconditional permanent residence, especially after two years.
You can also team up with existing major hospitality companies through franchising, allowing you to acquire properties and start your own hotel altogether. In 2017 alone, the travel and tourism industry in the U.S. earned over $1.6 trillion and the sector has been enjoying stellar growth for the past ten years. According to Hospitality Net, America’s hotels will enjoy their 10th consecutive year of growth in 2019.
Grow Think reported that the hotel market in the U.S. alone made $166.5 billion last year and the sector experienced a 4.7% growth rate over the past five years. A profit of $26 billion was recorded by the industry. Tap into it and grow your investment.
The hospitality business also has segments and classes. Hotels provide lodging, meals, and other services for travelers and other guests. Motels, on the other hand, focus on providing lodging for motorists, preferably in rooms that are close to open parking areas.
Hotels and motels can be classified by characteristics such as whether or not it is located in a metropolitan area, whether it provides full or limited services, the state or region in which it is located, its price, the number of rooms, and whether it is independent or part of a chain operation.
Hotels make the most of their money by selling out their rooms. They get additional revenue by providing other services such as meals, drinks, conference halls, and meeting rooms.
Creating or preserving 10 jobs is less of a challenge for an EB-5 immigrant who invests in the hotel business. A modern hotel employs front office professionals, housekeepers, laundry, concierge, and guest relations employees. Some also like to hire the services of fitness teams and nutritionists.
EB-5 Investments in the Manufacturing Sector
The manufacturing sector of every economy is usually highly lucrative, producing goods that will be used by consumers as well as other industries and the same is true of the United States. The Balance reports that U.S. manufacturing is the largest in the world, producing 18.2 percent of world commodities.
Products manufactured in the U.S. are marketed not only in this country but all over the world. One major advantage manufacturers in the U.S. enjoy is that natural gas is cheaper here than it is anywhere else in the world. This is a large and profitable market that gives confidence to investors.
Another item of interest to the EB-5 investor is that the manufacturing sector is a massive source of labor. Statistics reveal that the U.S. has 12.75 million manufacturing jobs, employing 8.5 percent of the country’s workforce.
Therefore, the EB-5 immigrant investor is not only confident of making a profit but is also able to employ many U.S. workers, thereby fulfilling the core requirements of the EB-5 program. The jobs available in the U.S. manufacturing industry provide income for both skilled and unskilled laborers.
In fact, in industries that are energy-intensive, such as manufacturing, U.S.-based companies enjoy a significant cost advantage over other countries according to Industry Week.
Many immigrants are already taking advantage of the American manufacturing sector through direct investment or starting their own businesses. Getting viable companies to invest in poses little problem to EB-5 investors because the program has grown in popularity among American business owners, who are eager for these types of partnerships.
This is because the EB-5 immigrant investment program provides them with supplement financing for their businesses. You are also free to start your own manufacturing business if that is your preference.
In the U.S., food business is good business. If you are looking for a business that guarantees stable market demands and competitive ROI, agriculture should top your list—especially large scale farming. A CNN investigation revealed that large private farms in the U.S. earn millions of dollars annually. Through this industry, there is a wide range of crops and animals that can be produced for local consumption and export.
Employment generation in the sector is also impressive. Agriculture provides jobs for a wide range of individuals such as farm laborers, animal health practitioners, security guards, technicians, and farm managers, to name a few. As an EB-5 investor, your best bet in this sector is to join a regional center for indirect employment creation. This will guarantee you a readily available platform.