EB-5 Green Cards
You may have heard that a Canadian citizen could invest a certain amount of money in exchange for a U.S. green card. While this is true, it certainly is not that simple. The EB-5 investor green card allows Canadians to invest $500,000.00 to $1 million in a business enterprise in exchange for a green card. For new investments in non-rural, non-targeted employment areas (TEA), the investment must be $1 million and create 10 direct jobs. The foreign national must also direct oversee the development of the enterprise. This is as difficult as it sounds, and most people do not elect to go this route.
There are options though. If the investment is in a rural area, or a TEA, you only need to invest $500,000.00, demonstrate the creation of 10 indirect jobs, and you do not have to be directly involved in overseeing the business. To qualify for a TEA, an area must have an unemployment rate of 150% of the national average. In short, you can reduce the investment amount in half, and lower the job creation requirement, simply by investing in a TEA.
What do I need to do?
Generally, the Canadian citizen has to put the entire $500,000.00 or $1 million at risk. The funds may be derived from gifts, but they must come from lawful sources. Upon deposit of the funds, the application process takes approximately six months. Upon approval, the Canadian citizen receives conditional residency – similar to the conditional residency received by a foreign spouse in marriage green card cases. Three months before the two-year anniversary of conditional residency, the Canadian citizen must apply to remove the condition, thereby making him/her a permanent resident.
Is there an easier way to get a green card?
Needless to say, most Canadians seeking a green card would opt for the $500,000.00 green card since: 1) it is half the price; 2) does not require direct management of day-to-day operations; and 3) it only needs to show the creation of ten indirect jobs. However, applying for an EB-5 green card and demonstrating that your new/proposed business meets the requirements takes a lot of time and money. Fortunately, foreign nationals looking for a green card with minimal effort can look to investing in a Designated Regional Center.
What is a designated regional center?
A designated regional center (RC) is a USCIS pre-approved investment/enterprise that has already met the requirements to accept $500,000.00 investments in exchange for a green card. In other words, investors do not have to show that the enterprise is in a TEA or rural area, or that it has created 10 jobs. This has already been done by the individuals/groups who created and had the RC approved. All the Canadian citizen has to do is invest $500,000.00 in the RC of his/her choice. There are approximately 130 regional centers in the United States. However, many of them are shell companies that were started simply to get investors - but not offering any legitimate business to invest in. As a result, most of investors in these regional centers have their EB-5 application for green cards denied. There are probably only a handful of regional centers that are legitimate, operating companies. These centers have 100% – or near 100% – approval rates for EB-5 green cards. Any denials in the green cards usually stem from the source of investor funds – and not from the viability of the RC's business model. Thus, even though there are a lot of regional centers, investors only have a few choices if they want a good shot at getting a green card.
Some of the benefits of an EB-5 green card have already been discussed. You get a green card within six months and are thus free to live, work, study and do anything you want in this country (legal, of course). Another benefit is that your spouse and children under 21 can all qualify get green cards under the same $500,000.00 investment. For example, if you are married with four children under 21 years of age, that would mean your family is entitled to 6 green cards for $500,000.00 (if you invest in a RC). Most foreign investors put the $500,000.00/$1 million simply to get a green card and do not expect a return on investment. However, some of the legitimate RC's do, in fact, offer a return on your investment. So for those of you who want something more than just a green card, picking the right RC could yield a financial return that would be icing on the cake.
Of course, there are downsides to an EB-5 green card. Investing $500,000.00 into a regional center has the same inherent risks as investing in anything else - such as stocks, bonds or mutual funds. There is no guarantee of a return on investment, or even a return of the principle amount. You run the risk of losing it all if the regional center you invested in loses business or ceases operations. You also run the risk of losing your conditional residency if the regional center ceases operations prior to your removal of the condition. Performing appropriate due diligence on several regional centers is paramount to ensuring that you make the best decision possible.
Why would I want to invest when I can move to the U.S. on other visas?
There are many reasons people elect to seek an EB-5 green card. Perhaps they are currently on a visa that does not allow for adjustment of status to a permanent resident, such as an E visa. Perhaps they are eligible for an employment-based green card, but the priority date is not yet current, such as an EB-3 green card. Perhaps they are wealthy entrepreneurs who are looking to start a business in the U.S. and a green card is simply a nice side benefit. Whatever your reasons, the EB-5 is certainly a great path to an expedited green card.
Facts & Statistics
- Since the EB-5 program started, approximately 90% of all foreign investors elect to apply for EB-5 green cards through an existing regional center rather than creating their own investment enterprise.
- There were 110 applications for new proposed regional center applications in 2010, with 71% of the applications being approved.
- 1,955 foreign investors filed EB-5 green card applications in 2010. Only 332 applications were filed in 2005, and the numbers have gone up drastically since then. It is expected that even more investors will apply in the coming years.
- 89% of foreign investors who applied for an EB-5 green card in 2010 had their applications approved.
- 41% of the approved green cards were granted to citizens of China. 16% came from citizens of South Korea.