Investing in America as a foreigner is a good path to take if you want to earn an EB-5 visa and become a permanent resident of the US as a result.
Of course you’ll have to stump up the capital to take advantage of this scheme, so how much will you need to invest and what are the variables involved?
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Understanding targeted employment areas (TEAs)
The main thing which influences the visa cost for prospective applicants is the minimum EB-5 investment amount. This changes according to whether or not you put your money into enterprises that are based on targeted employment areas, or TEAs for short.
A TEA is basically a part of the country where the economy could do with a shot in the arm, namely through the creation of jobs that will occur as a result of EB-5 investments.
There are different definitions depending on whether the region is rural, or whether it is an urban area with high unemployment.
In either case, the minimum capital investment required is $800,000. This is attractive not only because it lowers the barrier to entry for the investor, but also means that there is less money on the line. Meanwhile the more deprived, underdeveloped parts of America will be targeted for investment, and enjoy economic growth as a result.
Appreciating the alternatives
If you do not want to put your money into TEAs as part of an application for an EB-5 visa, you of course have the option to instead invest in parts of the country that do not qualify under either the rural or high unemployment definitions.
This gives you more flexibility, and of course means that you can choose to invest in places that are more economically robust to begin with. The downside is that outside of TEAs, the minimum investment that’s required of EB-5 applications is $1.05 million.
There is also a cap on investments that are covered by this project, currently sitting at $1.8 million. So there is definitely a particular type of investor that is better suited to EB-5 visas than others. And with just 10,000 visas of this kind issued annually, demand usually outstrips supply, so it is not a sure bet.
Getting to grips with different investment approaches
Another point to make when discussing how much you’ll need to invest for an EB-5 visa is the variety of approaches on offer.
There are two main categories; direct investment and regional center investment. As the name suggests, a direct investment is one you make as an individual, and there’s an expectation that you’ll essentially take on a managerial role in any enterprise you fund.
Meanwhile a regional center investment basically sees your cash put into a pot with other investors, to have it then distributed among whichever projects require it in a given part of the country.
The same minimum and maximum investment limits are in place whichever avenue you go down. And of course you will need to prove that the capital you are handing over was obtained in a totally above board way, because of course the EB-5 scheme has to avoid the likelihood of it being used for money laundering.
Final thoughts
For overseas entrepreneurs who want to launch an enterprise in the US and earn a green card as a result, or for investors who want to become permanent residents without necessarily getting hands-on with the management of a business stateside, an EB-5 visa makes sense.
Now you know how much you’ll need, you can start taking next steps and hopefully begin the process that will lead to full blown US citizenship.
