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As an investor or entrepreneur, there are multiple options that could allow you and your immediate family (spouse and children) to move to the United States. Which option to pursue ultimately depends on your goals, your capital means, and the degree of risk you are willing to undertake.
Investors typically come to the U.S. on L, E1, E2, or EB-5 visas. The L (intracompany transferees), E1 (treaty trader), and E2 (treaty investor) are non-immigrant visas, i.e. the recipient and immediate family (spouse and unmarried children under 21 years of age) are permitted to reside and work in the U.S. temporarily. The EB-5 program is an immigrant visa process, which results in conditional permanent residence for the investor and immediate family for two years. Then, ninety days prior to the expiration of the two years, the investor can petition to remove the conditions and become a permanent resident as long as the conditions required for the EB-5 program are met. Permanent residence ultimately allows for naturalization (becoming a U.S. Citizen) after five years as a law-abiding permanent resident.
The visa classifications outlined above may be used independently, or in conjunction with one another to meet the investor’s goals. For example, an investor that owns an overseas manufacturing facility may want to start a retail outlet to sell the goods manufactured abroad to the U.S. consumer market. If the investor is from a treaty country, then he or she may apply for an E2 treaty investor visa (non-immigrant) to open the startup retail outlet in the U.S. A few years after establishing the retail outlet and feeling reasonably assured of it’s long-term success, the investor may decide to make an EB-5 qualifying investment into the U.S. to grow the number of outlets, create the required jobs, and apply for an EB-5 visa, which would result in permanent residence. In this scenario, the investor/entrepreneur would be permitted to establish the business in the U.S. via a non-immigrant visa, which would allow for his/her children to attend school and reside in the U.S. temporarily, and then decide to pursue permanent residence via EB-5 after establishing the business.
Investors and entrepreneurs have varying goals, access to capital, and tolerances for risk. Some common goals investors have include:
The amount of capital available to the investor or entrepreneur plays an important role in the decision making process. The EB-5 program requires an investment of US$1,000,000 that is put 100% at risk with no guarantee of a return. For certain high-risk areas, deemed Targeted Employment Areas (TEA), an investment of only US$500,000 can be made; however, while the investment amount is cut in half, the capital is subjected to higher risk because the TEA regions by definition are rural or economically depressed areas evidenced by high unemployment.
The non-immigrant visas also require substantial capital to establish and sustain a start-up business, as well as many other requirements including showing the ability to sustain the family, but depending on what is reasonable and customary for the business endeavor, the investment may be substantially less than the EB-5 program.
The degree of risk an investor can endure is also an important element when mapping out a strategy. If an investor would like to “test the water” before making a US$1,000,000 investment, then the example outlined above is one viable strategy. On the other end of the spectrum, if an investor with substantial expendable capital is certain the goal is permanent residence and he/she would like to make the investment with minimal involvement, then pursuing an EB-5 through a Regional Center investment may be a better route.
When making an EB-5 investment, investors can either make a Direct Investment in a new commercial enterprise, or invest their funds with a designated Regional Center. With Regional Centers, monies are pooled from multiple investors for large projects and the required sustained employment can be satisfied by indirect employment created due to the economic activity of the pooled investment. Direct Investments are direct capital contributions to new businesses (established after November 29, 1990) where the investor must create a minimum of 10 full-time, sustainable jobs for U.S. workers (USCs or LPRs). Regional Centers have a lower risk for the investor because they bare the burden for the required job creation, economic analysis, business plan, etc.; however, the return on investment can also be lower than that of a Direct Investment. With a Direct Investment, the investor typically has more control over the direction of the new business, it’s growth, and the rewards from its success.
As stated, the EB-5 Program requires an at risk investment of US$1,000,000 (or US$500,000 for Targeted Employment Areas). It also requires that the investment be in a single, new commercial enterprise that is “for profit”, that the investor be involved in the day-to-day management or policy formation, and that it creates full-time employment for at least 10 qualifying U.S. workers within the two year conditional residence period. If making a direct investment, the investment must be made in the company that creates the 10 jobs. If investing in a Regional Center, then the jobs can be indirectly created through the economic activity of the Regional Center. Either type of investment requires a comprehensive business plan, proof of the source of legal funds, and the involvement of multiple professionals.
A comprehensive, detailed, and credible business plan must be submitted that shows that the nature and size of the business will require at minimum 10 full-time employees, including the estimated dates they will be hired. An EB-5 business plan must include, among other things, a market study, the organizational structure, economic and break-even analyses, an operational plan, a financial plan, and marketing and sales plans at a minimum. Professional business plan writers often produce the plans in consultation with the investor or regional center, and the investor’s immigration attorney reviews the plan to insure it meets the legal requirements of the EB-5 program.
The investor must also provide documentary evidence to show the source of the funds and that the funds were acquired lawfully. There is no limit on the time-frame for the inquiry into the funds. In general, the inquiry will go back sufficiently far enough to ascertain how the funds were obtained via business operations, employment, investments, etc. For example, if an investor inherits money from a parent, the investor would also need to show where the parent had acquired the money.
In general there are multiple professionals involved in an EB-5 process, including immigration lawyers, business plan writers, economists, business law practitioners, financial professionals, and escrow agents to name a few. As a potential investor, you should retain immigration counsel to insure you are protected throughout the process. Your immigration lawyer will oversea the process, review the work product of the multiple disciplines involved, and insure the process complies with EB-5 law and USCIS policy.