A Look at the Two Paths to Getting an EB5 Green Card

Foreign nationals can invest in a qualified new commercial enterprise (business) under the EB5 Program and become eligible for an EB5 green card and later US citizenship.

Applicants looking to get an EB5 green card must select one of two pathways: The Direct Investment Program or the Regional Center Program. Here’s an overview of EB-5 in general as well important details on each program to help interested investors determine which path is best for their family.

EB5 Program summary:

The EB5 Program was created by Congress in 1990 as a way to stimulate the US economy through foreign capital investment and job creation. Two years later, Congress created the Immigrant Investor Program, and set aside visas for foreign nationals who specifically invest in new commercial enterprises associated with USCIS approved regional centers.

Although the two EB5 Programs differ in many key ways, both programs have the same basic requirements:

1. Qualified foreign nationals must make the necessary capital investment into a US for-profit commercial enterprise. (Either $1.8 million in a non-targeted employment area project or more commonly $900,000 in a targeted employment area project).
2. The investment must create, or in some rare cases, preserve at least 10 full-time jobs for qualified US workers for 2 years.
3. The investment must be an at-risk investment, there can be no guarantees. An EB5 investor has the chance to gain as well as lose.

The EB5 Program or Direct Investment Program

Foreign nationals who select the Direct Investment Program invest their capital directly into their selected new commercial enterprise. The investor can maintain control over the investment, manage the day-to-day operations of the investment, and better control the timing of the job creation. The investor must create or save 10 direct jobs for qualified US workers in order to remove the conditions on their permanent residency.

Although the Direct Investment Program is riskier and requires more time and effort on the part of the investor, it could lead to higher returns.

The Immigrant Investor Program or Regional Center Program

Foreign investors can invest in a sponsored capital investment project offered by a US Citizenship and Immigration Services (USCIS) designated regional center. Regional centers are public or private economic units engaged in economic growth and job creation. Investors in regional center sponsored projects place their capital into an investment pool (a new commercial enterprise). The new commercial enterprise will then transfer the investment funds into a job creating enterprise.

Investors in the Regional Center Program do not need to be involved in the day-to-day operations of their investment. In addition to less managerial responsibilities, investors benefit from regional center’s easier job creation requirements. Regional Centers are allowed to count indirect and induced job creation as well as direct job creation.

The Regional Center Program is a great option for investors whose primary reasons for investing are to obtain lawful permanent residency (green card status) for themselves and their family while not worrying about managing or living near their investment.

Targeted Employment Area (TEA) FAQ:

Investing in targeted employment areas reduces an investor’s minimum required investment amount from $1.8 million to $900,000.

Targeted employment areas are areas that are either rural or have an unemployment rate that is 150% the national unemployment rate. TEA are not strictly for one program or the other. Investors in the Direct Investment Program can utilize TEA designation, but it’s far more common to see Regional Centers utilize TEA designation.

Key Program Differences:

Job Creation

• Direct Investment Program can only count direct job creation.
• Regional Center Program can count direct, indirect and induced job creation.

I-829 Petition to Remove Conditions

• Direct Investment Program requires investors to file documentation proving that at least 10 direct jobs for qualified US workers were created. An investor will likely need to file copies of US citizenship proof, payroll records, and tax returns.
• Regional Center Program has its own methodologies for proving job creation.

Investment Funds

• Direct Investment Program funds can more easily come from a variety of capital sources such as real estate property, inventory, equipment, or cash.
• Regional Center Program funds transferred are typically cash. The capital can come from gifts, inheritance, sale of assets, dividends, or loans backed by personal assets.

Management Role Requirements

• Direct Investment Program requires EB5 investors to be actively engaged in the management of the enterprise. If an investor desires more control over their investment and having the potential for higher returns on their investment then the Direct Investment Program is the route to take.
• Regional Center Program only requires its investors to take on a limited partner (or similar) role. They do not need to be involved in the day-to-day management of their investment and can instead be involved in policy-formation.

Program Permanence

• The Direct Investment Program is a permanent program.
• The Regional Center Program still requires frequent re-authorization by Congress. For several years now, this program has been extended for short periods of time. The Regional Center Program has just been extended to September 30, 2020, as part of the federal funding package.

US Citizenship

Five years after obtaining conditional permanent residence, EB5 investors (and their family members) who fulfilled the program requirements may become eligible for US citizenship.

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