EB-5 Visa Program
The typical investment is $900,000. The difference in the two amounts essentially comes from where the business/project is located. If the business/project is located in a TEA (Targeted Employment Area), then the investment is $900,000, if not, it is $1.8 Million.
There are two basic ways for the foreign national to make their investment: the Direct (Individual) Investment and the Regional Center. One choice is for the foreign national to find his or her own individual investment vehicle in which they will invest and play an active role in management and/or policy making. The second option is a government-approved “Regional Center” investment.
This first choice is more entrepreneurial – I am starting a business and running it. The second choice in a classic investment in a business and is passive – someone comes to me and asks me to invest in a company, gives me some shares, and says you are on the board of directors – minimum involvement. This method comes with an exit strategy.
As an overview, the major advantage of the individual investment option is that the foreign national accomplishes not only an immigration purpose but also invests in a business that may provide significant returns. In addition it may provide a source of income on an ongoing basis. However, there are far more immigration law hurdles to be overcome than with the Regional Center investment.
The Regional Center investment is often the quickest and most secure option (assuming the investment is made in a Regional Center with a strong track record). The immigration process is often quicker, and there are far fewer legal issues to be confronted. However, the investor is not running his or her own business; and the rate of return may be lower than in a successful individual investment.
REGIONAL CENTER vs. INDIVIDUAL EB-5
Comparing Regional Center and Individual EB-5
In addition, the Regional Center option is advantageous because:
The “How To” Of Individual EB‐5
EB-5 Investor Characteristics
The driving force behind the investment is the business opportunity specifically, and not the Green Card, generally.
Several items need to be kept in mind. Because this is an active investment, the investor needs to have a residence located approximately to the business.
The business can’t be in Miami if they live in New York. However, they could live in West Palm Beach and operate a business in Miami (a distance of about 60 to 70 miles – a long but plausible commute). Further, while he must be active in the business he can have help with the management. Also active does not mean they have to be there every minute. However, the investor does need to show that they have the ability to operate the business and have an understanding of it.
In addition, the business does not have to have only one investor. There could be multiple investors, but each investor must have an active role in the business. Thus while on the surface it might seem that you could only raise $900,000 (TEA – Targeted Employment Area) or $1,800,000 in a non‐TEA, in fact you could raise significantly more. That doesn’t mean if you needed to raise let’s say $25,000,000, you could get 28 investors of $900,000 who are all activity involved. While in theory, the answer is yes; in practice, probably not. However, the thing to remember is that while the minimum investment is $900,000, there is no maximum. Therefore, if you need to raise, let’s say $5,000,000 you might be able to get 3 investors of a million and one of two million. As to how this would work structurally, that would depend on the business form (i.e. Corporation, LLC or LLP) you choose and the responsibilities each investor takes on.