Country

USA

 

USA:Land of Opportunities

 We are all familiar with the adage, “The American Dream”,which signifies that in America, anyone can become successful and prosperous and fulfill all his dreams. This land, where they say anything is possible, is The United States of America (also referred to as the United States, the U.S., the USA, or America).

The United States is the third largest country by total area. The population of USA comprises of ethnically and culturally diverse people who trace their origins to numerous countries around the world. This multiculturalism is the product of large-scale immigration from many countries. USA also has a sizeable Native American population who has contributed in its own unique way in shaping American history and culture. This cultural mix has been often described as a homogenizing melting pot in which immigrants and their descendants retain distinctive cultural characteristics but at same time live in harmony and strive to achieve their goals in this land of opportunities.

U.S.A. is a federal constitutional republic comprising of fifty states and a federal district. It shares the longest unguarded border in the world with Canada to the North and its southern neighbor is Mexico. Together with Canada and Mexico, the USA forms the North American continent.

USA is still considered a global superpower that exercises economic, political, and military influence over other countries. It is a permanent member of the United Nations Security Council and New York City hosts the United Nations Headquarters. It is a member of the G8, G20, and Organization for Economic Co-operation and Development. Almost all countries have embassies in Washington, D.C., and many have consulates around the country. Likewise, nearly all nations host American diplomatic missions. The country accounts for 40% of global military spending and is a leading economic, political, and cultural force in the world.

The U.S. economy is the world’s largest national economy. The American dollar has a strong global presence and the ups and downs of US stock exchanges are closely monitored throughout the world. The United States has a capitalist mixed economy, which is fueled by abundant natural resources, a well-developed infrastructure, and high productivity.  This has made USA a land of opportunities that has created more billionaires than any other country in the world.The country offers its residents a high standard of living and a good quality of life.

 Residency by Investmentin USA: EB-5 Investor Visa Program

The US government introduced residency by investment in 1991, more commonly known the EB-5 visa or the million-dollar Green Card.

In August of 2003, INS began approving regional center petitions for the first time since 1998.  EB-5 visa is now once again being processed by the INS after a brief break from 1998 to 2003.

INVEST IN REGIOANL CENTER AS DEBT OR EQUITY OR MUTUAL FUND

The USA Immigrant Investor Program (USA IIP) or more commonly known as the EB-5 visa or the million-dollar Green Card is an easy and quick way of obtaining a Green Card based on US investment. The fifth employmentbased visa preference category, created by Congress in 1990, is available to immigrants seeking to enter the United States in order to invest in a new commercial enterprise that will benefit the US economy and create at least 10 full-time jobs.  There are two ways to invest within the EB-5 category and they are:

  • Creating a NEW commercial enterprise or
  • Investing in a troubled business.

As per US Bureau of Citizenship and Immigration Services website, “entrepreneurs (and their spouses and unmarried children under 21 years) who make an investment in a commercial enterprise in the United States and who plan to create or preserve tenpermanent full time jobs for qualified United States workers, are eligible to apply for a Green Card (permanent residence).

Up to 10,000 visas may be authorized each fiscal year for eligible entrepreneurs.

An applicant must invest $1,000,000 US, or at least $500,000 US in a targeted employment area (high unemployment or rural area).  In return, USCIS may grant conditional permanent residence to the individual.”

Who can qualify?

There are three ways within the EB-5 category to qualify for a Green Card and they are:

  • Creating a new commercial enterprise or
  • Investing in a troubled business or
  • Investing in a regional centre.
  1. New Business Enterprise:

To qualify, the applicant must:

  1. Invest or be in the process of investing at least $1,000,000 US.  If the investment is in a designated targeted employment area (discussed further below) then the minimum investment requirement is $500,000 US.
  2. Benefit the U.S. economy by providing goods or services to U.S. markets.
  3. Create full-time employment for at least 10 U.S. workers.  This includes U.S. citizens, Green Card holders (lawful permanent residents) and other individuals lawfully authorized to work in the U.S. (however it does not include the applicant, his spouse, sons or daughters).
  4. Be involved in the day-to-day management of the new business or directly manage it through formulating business policy – for example as a corporate officer or board member.

Targeted Employment Area is defined by law as, “a rural area or an area in USA that has experienced high unemployment of at least 150 percent of the national average.”

  1. Troubled Business:

To qualify, the applicant must:

  1. Invest in a business that has existed for at least two years.
  2. Invest in a business that has incurred a net loss, based on generally accepted accounting principles, for the 12 to 24 month period before the applicant filed the Form I-526 Immigrant Petition by an Alien Entrepreneur.
  3. The loss for the 12 to 24 month period must be at least equal to 20 percent of the business’s net worth before the loss.
  4. Maintain the number of jobs at no less than the pre-investment level for a period of at least two years.
  5. Be involved in the day-to-day management of the troubled business or directly manage it through formulating business policy. For example, as a corporate officer or board member.
  6. The same investment requirements of the new commercial enterprise investment apply to a troubled business investment ($1,000,000 US or $500,000 US in a targeted employment area).
  7. Regional Center Pilot Program: (90% of investors apply under this program)

To qualify, the applicant must:

  1. Invest at least $1,000,000 US or $500,000 US in a regional center affiliated to a new commercial enterprise or a troubled business located within the area of the USCIS designated Regional Center. Regional Centers are defined and discussed further below.
  2. Create at least 10 new full-time jobs either directly or indirectly through the capital investment.

A Regional Center is defined as any economic unit, public or private, which is involved with the promotion of economic growth, improved regional productivity, job creation, and increased domestic capital investment.

Regional Center investors may rely on indirect job creation rather than directly hiring ten employees. A competent professional, such as an economist, must quantify the indirect employment. If the regional center is in a high unemployment area the required capital is reduced to $500,000 US.

Of the 10,000 investor visas (i.e. EB-5 visas) available annually, 5,000 are set aside for those who apply under a pilot program involving an INS-designated “Regional Center.” To date, the quota has not been exceeded.

Some interesting features of the EB-5 Program:

EB-5 investors include people from all walks of life – professionals, business people, persons wanting to facilitate a child’s education, and retirees. Because the EB-5 visa permits employment in the US, many EB-5 investors become involved in charity or part time work. Simply put, the EB-5 visa gives investors the flexibility to do what they want in the USA.

Investors who wish to obtain a Green Card for themselves and their family members but do not wish to actively manage their business should consider the EB-5 Investor visa. For such investors, it is most often cheaper to utilize the EB-5 category rather than to start and maintain a business.

When investing with a regional centre, investors need to be extra cautious in choosing the right regional center for their investment. It is important to understand the proposed project and its intricacies before making an investment.

Many EB-5 applications have been rejected because the projects proposed by many regional centers did not createthe necessary 10 jobs which are a pre-requisite for visa approval under the EB-5 Program.

Each Regional Center investor purchases a partnership interest in a specific investment partnership managed by different companies that owns, renovates and manages a property in the Regional Center. Indirect employment results from jobs created by elevating a previously underutilized property to a more productive use. Thus, the investment in the company or limited partnership meets the requirement for the EB-5 visa.

The applicant’s spouse and unmarried children under the age of 21 years may be admitted to the U.S. with the applicant on a two-year conditional period. If the applicant’s I-829 petition to remove conditions is approved, then the conditions will be removed from his/herspouse’s and children’s Green Card status.  As a lawful permanent resident (Green Card holder),the applicant’s spouse and children will be authorized to work or attend school in the U.S.

Processing of the visa application:

Our firm is an active participant in the EB-5 Investor Program since 1997 and we work with several regional centers which have a long history of successful investments and high EB-5 approval rates.

Obtaining a “Green Card” through the EB-5 Program is a three-step process:

  1. The successful applicant must obtain approval of his or her Form I-526 Petition for an Alien Entrepreneur.
  2. He or she must either file an I-485 application to adjust status to lawful permanent resident (if applying from within USA), or apply for an immigrant visa at a U.S. consulate or embassy outside of the United States (if applying from outside the USA). The EB-5 applicant(and his or her dependents)are granted conditional permanent residence for a two year period upon the approval of the I-485 application or upon entry into the United States with an EB-5 immigrant visa.
  3. A Form I-829 Petition by an Entrepreneur to Remove Conditions must be filed 90 days prior to the two year anniversary of the granting of the EB-5 applicant’s conditional Green Card.  If this petition is approved by CIS then the EB-5 applicant will be issued a new Green Card without any further conditions attached to it, and will be allowed to permanently live and work in the United States of America.

Processing times vary from as little as a few weeks to as much as six months. It is hard to predict or promise a particular processing time. However, the entire process takes approximately eighteen months.

Benefits of the program:

  • Relatively smaller amount of investment as compared to many European countries
  • Applicants directly obtain permanent residency in lieu of temporary residency as is the case with many European Residency by Investment programs
  • Wider choice of investment available to applicants – There are many regional centres to choose from across the country hence many options available to investors with respect to type of project and location
  • Applicants and their dependents can live, study and work in USA right from day one
  • Visa free travel to over 130 countries around the world

 Comparison between EB-5 Investor Program and Canadian Immigrant Investor Program:

 

 

American Canadian
Amount $1 million in new or existing business or $500,000 US in a regional centre $ 800,000 CD
Period of investment Five years Five years
Financing for investment

 

No finance available Finance available for 5 years with total interest of around CD$ 180,000

 

Risk of investment

 

Definite business risk No return and hence no risk

OR

If financial loan option chosen then loss of $180,000 paid towards interest and administrative fees to the financial intermediary. Hence calculated risk

Minimum  net worth

 

No need to show minimum net worth

 

Must have minimum net worth of $1.6 million CD
Gifted net assets Gifts – inherited assets are permitted as long as they were obtained by legal means

 

Gifts – Inherited assets are allowed. Net worth must be generated by investor’s own efforts in a business venture. However, spouse’s assets may be included
Management experience No obligation to show any management experience in business Must have management experience
Third party investment

 

 

Relative or friends can make investment on behalf of person seeking a Green card Investor must have generated his own assetsfrom his own business ventures. No third party investment allowed
Processing time

 

  • Application made within USA –  3-4 months
  • Applications made outside of USA – 3-6 months

 

Minimum –8-10 months, maximum – 4 years. Applications under the Quebec Program are processed faster than the Federal Program.

 

 

Exploratory  trip

 

 

No obligation to undertake an exploratory trip to USA

 

No obligation to undertake an exploratory trip under FIIP or QIIP, but it is mandatory to undertake one for all PNP Investor Programs
Business plan Detailed business plan has to be submitted by the LLC company in which the investor is making an investment No need to submita business plan

 

Selection interview

 

No detailed interview is conducted with the investor rather, approval under EB-5 Program is based on paper screening of documents and business project Very detailed and intensive interview conducted with the investor
For applications outside of USA, interview with a visa officer is generally for medical and security clearance only and investor must have a general idea about what he his business project is about  
Conditions The business project must create 10 full time direct and/or indirect jobs for Americans within a period of 24 months No conditions attached
Quota

 

 

There is a quota of 3000 visas allocated to regional centers out of a total of 10,000 but quota has never been exceeded No official quota but there is an yearly cap
Investment in real estate

 

 

 

 

Investment in commercial real estate allowed but project must be approved by the US immigration department No investment in real estate allowed

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