EB-5 Investors: Explained

(By Rahul Reddy & Rebecca Chen, Attorneys at Law)

While the EB-5 immigrant investor visa has many advantages for those who are able to meet the requirements, it is not without its risks. This article discusses the substance of the EB-5 immigrant investor visa, along with tips to become an EB-5 investor in the safest possible manner.

What are the Qualifications for an EB-5 Visa? 

The “immigrant investor visa”, also known as the EB-5 visa, is an investment-based opportunity to obtain U.S. permanent resident status (a “green card”). Generally, one may obtain a green card through the EB-5 category by meeting two requirements: (1) invest $1,000,000 of legally obtained capital in a U.S. commercial enterprise and (2) create 10 jobs for U.S. workers.

The $1,000,000 investment requirement may be lowered in some limited circumstances. For example, the requirement may be bypassed by investing within a “Targeted Employment Area”, which includes areas that have been defined as “rural” or with “high unemployment”. In that case, the investment requirement is lowered to $500,000.

The second requirement may be lessened in certain circumstances as well. For example, if the investor invests in a “troubled” business, jobs that are “saved” are counted towards the 10 job requirement, in addition to “jobs created”.

Who May Benefit?

The investor, along with his or her spouse and unmarried children may all obtain green cards through this category

What are the Advantages?

Does not require PERM Labor Certification: There is no requirement to demonstrate that there is a shortage of U.S. workers available to perform your job. EB-5 allows PERM labor certification to be avoided altogether. 

Does not require a permanent job offer in the U.S.: This is unlike the EB-1C Multinational Executives or Managers Category, which requires a permanent job offer in the U.S.

Does not require extraordinary ability: The EB-5 visa category does not require a demonstration of any  special skills or abilities. 

What are the Disadvantages?

Investment risk: EB-5 investors are often the targets of Ponzi Schemes, and fraud has cost investors millions of dollars in 2015 alone. However, fraud can have even more drastic effects on EB-5 investors than loss of earnings (since many EB-5 investors choose to forego other investments with a higher rate of return due to the immigration benefits the EB-5 program provides). Because the EB-5 program does not initially award the entrepreneur full permanent residency, but rather a conditional green card good for two years, EB-5 fraud can have drastic effects on immigration benefits long after the initial investment was made, such as loss of permanent residency status.

Expensive: Most of the time, one must invest at least $500,000 or $1,000,000 just to meet the EB-5 investment requirement. This is in addition to the additional work and expenses required (such as administrative and legal fees) beyond the actual investment.

Removes non-immigrant status: The EB-5 category gives the investor a two year temporary green card, which causes the investor to lose any previous non-immigrant status (H-1, L-1, etc.), unlike most other paths to permanent residence. For this reason, it is extremely important that the case is ultimately successful.

Reddy & Neumann, P.C. is an immigration law firm in Houston, Texas. For over 15 years, our firm has successfully represented corporate clients across the United States in their efforts to bring foreign workers and business professionals to the United States. Reddy & Neumann, P.C. is highly experienced in working with employment-based visas, adjustment of status, green cards, and PERM labor certification. From filing, through approval, and on to appeal, we do everything possible to ensure that your company can bring the best and brightest in the world to the United States.