EB-5 Visa Investment Options
EB-5 program was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors, especially in China and Vietnam. Investments may be made in either of two ways: individually (direct), or through a government-approved regional center. In this article, the advantages and disadvantages are presented in order for investors to choose the most appropriate to them.
Direct Investment Basics
In the direct method, the foreign individual invests a minimum amount of $1 million directly to set up a new enterprise, to buy an existing business or to establish a new subsidiary. Business plan is required to the investor. After the investment license gets approval in the host country, the investor establishes his business and directly runs the business here.
In addition, investors must prove that their investment will directly create 10 full-time jobs for qualifying employees within 2 years of the visa petition’s approval. In this direct investment method, investors must engage in enterprise management and directly runs the business.
Regional Center Basics
In the regional center method, the foreign individual invests in an enterprise through a government-approved regional center. The minimum investment amount is $500.000. A regional center investor can satisfy the job-creation requirement by creating direct or indirect full-time jobs for at least ten employees within two years of the visa petition’s approval.
Unlike a direct investor, there is no requirement of educational background, foreign languages and professional degrees for a regional center investor. The investor can have a full refund of investment capital after 5 years, in cash or stock and also receive annual interest.
Choosing an Investment Method
Each method has its own advantages and disadvantage. The investor is encouraged to choose the one that matches with his finance, professional background and management experiences.
Pros and Cons – Direct Investment Basics
– Pros: the investment not located within a regional center allows investors to have full control over the business. This is an opportunity for them to expand and develop their own business, also earn more if their business go well. In addition, the investors have right to decide the expansion, narrow or shares selling of their enterprise. They are entirely active to deal with difficulties.
– Cons: Investors are responsible for all legal procedures, need to be good at languages and have professional skills. The investors also need to spend a lot of time and efforts on their business. The investors are responsible for debts, and losses if their business do not success. Investors must prove that their investment will directly create 10 full-time jobs for qualifying employees within 2 years. Indirect or related jobs will not be accepted. Thus, this is one of the biggest disadvantages for investors.
Pros and Cons – Regional Center Basics
– Pros: Investors do not directly run the business. Thus, there is no requirement for education, foreign languages and professions. USCIS only set job creation requirement towards this investment: 10 full-time employments for qualifying employees within 2 years. However, prior to calling for investment, each project has its own calculation of jobs created per investor and has been approved by USCIS. Therefore, job creation requirement does not matter to investors. As such, the rate of success and holding a green card for the whole family is higher than that of the investment not located within a regional center.
– Cons: Without their careful consideration on projects, investors might suffer several risks such as loss of capital, no permanent green card, not becoming U.S citizens. However, the most important issue, regarding to EB-5 investment located within a regional center, is to select a prestigious and professional consulting company which assists investors to complete procedures, assess and decide EB-5 projects to meet USCIS’s requirements.
EB-5 investment located within a regional center means that the investors do not directly run the business, manage or solve problems by themselves. This type is not suitable for investors who are looking for profits.
Note: EB-5 investment located within a regional center can be returned after 5 years. However, in practice, all investors are not paid back at all. That depends on many different factors: whether the project is completed or not? Is the business profitable? Are there any commitments between the investor and the project owner?
These essential information on EB-5 investments, will hopefully help potential investors to choose the right option. RSCC is a professional EB-5 investment consulting company to assist you have a successful investment.