While it is not a requirement of the United States Citizenship and Immigration Services (USCIS) to be an accredited investor to qualify for the EB-5 Program, it is a requirement of the U.S. Securities and Exchange Commission (SEC).

This article discusses what an EB-5 accredited investor is and why it’s a requirement of the SEC.

An EB-5 accredited investor:

Has an individual or joint net worth with their spouse of $1 million at the time of investment, not including their primary residence.

OR

Has either an individual annual income of more than $200,000 or a joint income with their spouse of $300,000 annually in each of the preceding two years prior to their investment and with the expectation that they will have that income in the current year. In other words, if they plan to invest in 2019, they must provide proof of their income in 2017, 2018, and 2019.

Why this is a securities law requirement:

In the United States, companies offering or selling securities are required to register with the SEC or find an exemption. Regional Centers, which offer equity interests for sale, such as a limited partnership interest, to EB-5 investors, are exempt from the SEC registration requirements if the EB-5 applicants are accredited investors under Securities Regulation D.

In other words, approved Regional Centers must have a valid exemption (Securities Regulation D which requires investors to be accredited investors) in order to offer equity interests to investors.

Any reputable approved EB-5 Regional Center will ask an EB-5 applicant if they are an accredited investor.

Why invest in the EB-5 Regional Center Program?

• EB-5 Regional Centers frequently offer equity interests for sale, allowing interests to take on a more passive investor role such as policy maker, whereas the Direct EB-5 Program sometimes requires more of an active day-to-day managerial role from the investor.
• EB-5 Regional Centers have the distinct advantage of being able to count indirect and induced job creation in addition to direct job creation, making it easier to fulfill the main program requirements and helping investors get that much closer to their unconditional green cards.
• Most importantly, EB-5 Regional Centers commonly take advantage of targeted employment areas (TEA), reducing the minimum investment amount for investors from $1 million to $500,000.

For more information about the EB-5 accredited investor requirements, send us a message.