TRADITIONAL EB-5
The EB-5 Visa Program allows a person and his or her immediate family to obtain a Green Card (live permanently in the U.S.) by investing in an enterprise that creates jobs for qualifying U.S. workers.
For foreign investors seeking the freedom and flexibility to live and work in the United States, this route avoids the requirement of family connections, securing a job or running an actively traded business. View our EB-5 Visa Process and Immigrant Investor Program Guide here.
The Entrepreneurial EB-5 Visa can be through both a direct (non regional center) project or using a regional center project. MSP attorneys will strategize with the investor entrepreneur to determine the best and most cost-effective solution.
EB-5 Entrepreneurial
SIMILARITIES BETWEEN THE OPTIONS:
Same amount of investment
Many believe that the regional center allows the investment to decrease from the required USD 1.05 million to USD 800,000. This is false. The decrease in investment funds is due to the geographical location of the project. If the project is located in a Targeted Employment Area (TEA), the required amount of investment then becomes USD 800,000.
10 full-time permanent jobs must be created per an investment to qualifying U.S. workers Qualifying US workers include: U.S. citizens, Legal Permanent Residents (LPRs), Immigrants authorized to work in the U.S. (e.g., asylees, conditional residents and refugees).
Those not qualified:
- Investor and his/her immediate family members
- Persons in nonimmigrant status (e.g., H1-B)
Full-time position means a position that requires a minimum of 35 hours/week
EB-5 Regional Center Program
DIFFERENCES BETWEEN THE OPTIONS:
Job Creation
- Direct Project – only includes direct jobs (W-2s / I-9’s required)
- RC – includes direct, indirect, and induced jobs (basically, more jobs can be created with an RC involved)
Corporate Structure
- Direct Project – Rigid structure
- RC – Flexible structure allowing for corporate layering
Investor’s Role
RC – limited involvement
Direct Project – allows more flexibility and responsibility
| CATEGORY | DIRECT EB-5 INVESTMENT | REGIONAL CENTER |
|---|---|---|
| Active Business Operation Management | day-to-day or through policy | day-to-day or through policy |
| Applicable Business Sectors | all that creates required jobs | all that creates required jobs |
| Business Plan | Matter of Ho compliant | Matter of Ho complaint and RC business plan |
| EB5 Investor Eligibility | Accredited investor preferred, not essential | Accredited investor preferred |
| EB5 Investor Participation | directly affiliated with US entity | capital investment through a Regional Center sponsorship |
| EB5 Investor Relationship with US Entity/Project | direct | indirect |
| Escrow of Funds | may be utilized | may be utilized |
| Job Creation Requirement | 10 full-time jobs for qualified US workers | 10 full-time jobs for direct. Also count indirect and induced jobs |
| Job Counts | direct employment | direct/indirect/induced |
| Job Creation Verification | job projection/payroll tax returns | project specific economist report/expenditure invoices/subject to final approval of USCIS |
| Project Specific Economist Report | Not required | required |
| Proof of EB5 Investment Funds | must be verifiable | must be verifiable |
| Capital Investment Range | $900,000 minimum | $900,000 minimum or higher raise per project |
| Targeted Employment Area (TEA) | if qualified, eligible for the reduced $900,000/EB5 unit | if qualified, eligible for the reduced $900,000/EB5 unit |
| Transactional Documents | PPM required unless one investor apply for himself | PPM required |
| USCIS Application Process | Historically shorter than RC | As posted by USCIS or longer |
It is imperative to explain the source of the investors funds in detail. Common source of funds (SOF), the way investors accumulated his/her investment funds, include the following:
- Employment earnings and bonuses
- Earnings from investor’s business
- Sale of business assets
- Inheritance
- Gift
- Stocks
- Retirement funds
- Proceeds from a real estate transaction
- Home equity loan
- Loan obtained from the investor’s business
- Loan obtained through a financial institution
- Loan obtained from a friend or family
Note: Loan funds must be secured by collateral assets of the investor.
If you have multiple SOFs, then each source based upon the path will be counted as an individual source.