The Immigration Act of 1990 established a new investor category for obtaining permanent resident status (Green Card). 10,000 immigrant visas are allocated annually to this category. There are essentially two EB-5 programs, the regular direct investment program and the Regional Center program. In order for an applicant to qualify under the Regular program, the following three basic requirements must be met: (1) investment in a new commercial enterprise; (2) investment of at least $1 million (or $500,000 in target employment areas) into the business with lawful money, and (3) creation of employment for at least 10 fulltime U.S. workers.
The investment may consist of the contribution of various forms of capital, including cash, equipment, inventory, property and other tangible equivalents. An investment amount of $1 million is generally the minimum (fees and costs of the immigration visa must be accounted separately and do not count towards the investment). However, $500,000 is acceptable if the business is situated in a “targeted” employment area, i.e. a rural area or one that has experienced unemployment of at least 150 per cent of the national average rate, as designated by the U.S. Office of Management and Budget.
The second program within the EB-5 category, the Regional Center program, is ideal for the retiree or inactive investor due in large part to the “indirect employment creation” requirement and possible limited partner features of this program. The Regional Center program advantageously removes the 10 employee requirement of the Regular program and substitutes the less-restrictive “indirect employment creation,” which allows the investor to qualify for an EB-5 Investor Green Card without directly hiring 10 people in the company that the investor has invested in. In summary, under a Regional Center program, the investor can qualify by presenting evidence that 10 jobs will be created throughout the Regional Center economy as a result of the investment as supported by an economist’s report from the Regional Center.
In summary the general requirements for an EB-5 Investment Green Card are:
- Invest $1,000,000 in the creation of a new business or $500,000 in a “regional center” or a Targeted Employment Area
- The investment must create 10 or more full time jobs for legal US residents — whether by directly hiring for the business or indirectly through investment in a regional center
- The investor must be able to prove the lawful source of funds through personal and business documentation
- The commercial enterprise must benefit the US economy
- The investor must “manage” the commercial enterprise