MOVING TO THE UNITED STATES ON AN EB-5 VISA
Investors from a variety of countries, including Brazil, Mexico, China, Viet Nam and Venezuela, aim to expand their business opportunities in the United States and also obtain US residency. One way to achieve both is through the EB-5 Employment Creation Pilot Program. In this program, qualifying investors receive temporary, or “conditional” residence cards (green cards) and later, upon showing that their investment helped to create 10 new jobs, they receive permanent residence. In order to qualify for an EB-5 investor visa, applicants must invest in a new commercial enterprise, fund it with at least $500,000 and create 10 new jobs, without affecting existing jobs.
The EB-5 process is complex and challenging, particularly to investors who have never set up a business venture in a foreign country before. Seeking the right legal help in a timely manner is crucial. Potential EB-5 applicants need to collaborate with an experienced immigration attorney, and other financial professionals to avoid any pitfalls in the course of their investment strategy.
Robert A. Kravitz, Senior Partner at the Miami-based Law Offices of Kravitz & Guerra, PA has assisted a number of foreign nationals to qualify their EB-5 investments. In the following interview, Mr. Kravitz provides information about the EB-5 Investor Visa process and also speaks about alternative options to obtain US residency.
Would you recommend a client to rather purchase his own piece of real estate instead of investing in a regional centre?
Remember that the EB-5 program has, at its core, the concept of “employment creation”. The program was established in 1990 and reauthorised in 1992 and regularly reauthorised ever since — to stimulate the US economy through job creation and capital investment by foreign investors. A qualifying invest gets lawful permanent residence (i.e., a “green card”) for the investor and his or her family. But the point is, “investment” is not enough. Simply investing in, say, Real Estate (no matter how expensive the Real Estate may be) does NOT qualify the investor for anything – the investment must be sufficient – $1,000,000 (in some cases, $500,000, we’ll talk about that later) AND it must create at least 10 full-time jobs within 2 years.
What is your own opinion on regional centres coming up in Miami versus the rest of the United States?
Naturally, we like to be able to point out local Regional Centers that we think are good investments because we can easily meet directly with all the principals, and because we are proud of our city! But let’s be clear about the term “Regional Center”: There are two ways of funding a project with EB-5 capital: through a direct investment or through a regional center. The regional center can be more attractive, as the designation makes some USCIS requirements less stringent for EB-5 visa applicants. Regional centers are held to more lenient job creation requirements than direct EB-5 investment, which focuses on direct job creation. Rather than being required to create 10 direct full-time jobs, regional centers can satisfy EB-5 job creation requirements by creating 10 direct, indirect, or induced full-time jobs. The regional center is afforded the benefit of economic multipliers in creating these jobs. Regional centers can also make it easier to pool capital since there is no limitation on the number of EB-5 applicants who can invest in a particular project, so long as each of the applicants meets the job creation requirements. However, it is important to remember that the mere fact USCIS has designated a business entity as a “regional center” in no way guarantees the safety of the investment or whether investors will get their green cards! It is simply an evaluation and approval of a plan to do business meeting certain strict parameters, but this may indeed never happen. You need to know the players – and the numbers.
How is the approval process for an EB5 visa and how long does it take?
After detailed preparation of a including an explanation of source of the invested funds (no money laundering please), job creation, etc., application is made on Form I-526 and filed with USCIS. Processing time for this is currently about 14 months. After filing, USCIS may have additional question, which can delay processing further. When this application is approved, the investor is granted “conditional resident” status – a temporary green card if you will – for two (2) years, and may live and work in the US as any green card holder would. In the 90-day period prior to the end of these 2 years, another petition, Form I-829, is filed to “remove” the conditionality, i.e., to make the residence permanent. Processing time for the I-829 is currently about 6 months.
How many EB5 visas has your firm processed so far and how many got approved?
Our EB-5 practice is not limited to filing for the Eb-5 “Visa”, which is a misnomer by the way, because the filing is actually for permanent residence, not a visa at all. All of the EB-5 applications we have processed have been approved or are pending approval in one stage or the other. Remember that, so long as the principal investor is approved, his/her spouse and children (unmarried & under 21) get their green cards too. We also represent American developers who come to us to help them form a Regional Center so they can solicit funds for their projects from foreign nationals interested in getting green cards, and/or for related assistance, e.g., whether a regional center may properly classified as being located in a TEA, a “Target Employment Area”. This can be crucial: an investment located in a TEA — which is a geographic area deemed to be one of high unemployment or rural underdevelopment — can be part of the EB-5 program at a reduced required investment of “only” $500,000.00 per investor – because the affected geographic area benefits disproportionately.
Do you recommend a particular EB5 program – or is it based on your clients needs?
The EB-5 landscape is constantly changing and the investment market is very fluid, so no, there is no one particular program. While there are some very large Regional Center investments that can accommodate scores of investors, I prefer smaller investments than are not entirely dependent on EB-5 investment capital. The larger programs are very impressive, and the marketing is very slick, but when you must line up dozens of investors to fully fund a project, that project may take years to get off the ground, and in the meantime, the investors’ children may be getting closer & closer to turning 21…
How much does an EB5 cost, in general?
That’s great question because there IS no answer! No two cases are the same. Sometimes we are involved with the business aspects of a client’s investment, particularly if it is a direct investment, i.e., a business the client will operate himself. That is very time intensive and our fees would reflect that. On the other hand, an investment in a well-constructed Regional Center all set-up & ready to go will allow us to focus on the Immigration applications only, as the financial planning has been done by the Center’s operators. In that case our fees would be much less – but remember: in that case, the investor will likely be paying an additional administration fee to the Regional center of about 10% or $50,000. I know it sounds complicated, but that’s because it IS complicated.
As a parting word to your wise readers: get good, professional advice. If it sounds too good to be true… it is!
Interview by Marius Koller, CEO Global Assets Consulting Holding, inc & VP Le City Deluxe
For further information, you may contact:
Law Offices of Kravitz & Guerra, PA
800 Brickell Avenue, Suite #701, Miami, FL 33131, USA