EB-5 direct investment works by following a similar process as other types of EB-5 projects, but with some differences and variations. The basic steps of the process are:
- The investor applies for the EB-5 program by investing a minimum of $1,050,000 in a new commercial enterprise that directly creates at least 10 new full-time jobs for qualified U.S. workers. The investment amount can be reduced to $800,000 if the project is located in a targeted employment area (TEA) or an infrastructure project. A TEA is a rural area or an area with high unemployment rate, while an infrastructure project is a project that supports public infrastructure development.
- The investor files Form I-526, Immigrant Petition by Alien Investor, to USCIS, along with the required documents and evidence, such as the source and path of funds, the business plan, the economic impact analysis, and the proof of job creation. The investor has to prove that their investment is legitimate, lawful, and compliant with the EB-5 program, and that it will create or preserve at least 10 full-time jobs for qualified U.S. workers within two years of the approval of the petition.
- If the petition is approved, the investor can apply for a conditional green card, either by filing Form I-485, Application to Register Permanent Residence or Adjust Status, if they are already in the United States, or by applying for an immigrant visa at a U.S. consulate or embassy abroad, if they are outside the United States. The conditional green card grants the investor and their immediate family members (spouse and unmarried children under 21) the right to live, work, study, and travel in the United States for two years, subject to certain conditions and obligations.
- Before the expiration of the conditional green card, the investor has to file Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, to USCIS, along with the required documents and evidence, such as the proof of the investment, the proof of the job creation, and the proof of the maintenance of the investment. The investor has to prove that they have maintained their investment and that the project has created or preserved the required jobs within the specified time frame.
- If the petition is approved, the investor and their immediate family members receive a permanent green card, which grants them the right to live, work, study, and travel in the United States permanently, without any restrictions or limitations. The investor can also apply for U.S. citizenship after five years of continuous residence in the United States.
What are the benefits and challenges of EB-5 direct investment?
EB-5 direct investment has some benefits and challenges that investors and developers should consider before making a decision. Some of the benefits are:
- Control and management: EB-5 direct investment gives the investor more control and management over their investment and their business, as they can choose the type, location, and structure of the business, as well as the policies, strategies, and operations of the business. The investor can also be more involved and engaged in the business, as they can be the owner, the manager, or the employee of the business.
- Return and exit: EB-5 direct investment gives the investor more potential and flexibility in earning a return and exiting the investment, as they can benefit from the profits and growth of the business, as well as the appreciation and sale of the business. The investor can also decide when and how to exit the investment, as they can sell, transfer, or liquidate the business, as long as they meet the requirements of the EB-5 program.
- Independence and autonomy: EB-5 direct investment gives the investor more independence and autonomy in pursuing their investment and their goals, as they do not have to rely on or cooperate with any other parties, such as regional centers, developers, or service providers. The investor can also avoid some of the fees and costs that are associated with other types of EB-5 projects, such as administrative fees, management fees, or legal fees.
Some of the challenges are:
- Responsibility and liability: EB-5 direct investment entails more responsibility and liability for the investor and their business, as they have to comply with various regulations and requirements from the U.S. government, such as USCIS, SEC, IRS, and others. These regulations and requirements can be complex and time-consuming to comply with and may change over time. Responsibility and liability can also increase the risk and exposure of the investment and the business, as well as the possibility of disputes and litigation.
- Difficulty and uncertainty: EB-5 direct investment involves more difficulty and uncertainty in achieving the investment and the goals, as they have to create or preserve at least 10 new full-time jobs for qualified U.S. workers within two years of the approval of the investment. This can be challenging and unpredictable, depending on the type, performance, and market of the business, as well as the economic, political, and social conditions of the area where the business is located.
- Competition and saturation: EB-5 direct investment faces more competition and saturation in the market, as they have to compete with other businesses and ventures that offer similar products and services, as well as other EB-5 projects that use the same visa category. This can affect the availability, attractiveness, and competitiveness of the investment and the business, as well as the return and exit of the investment.
Therefore, EB-5 direct investment is a type of EB-5 project that involves investing in a new commercial enterprise that directly creates at least 10 new full-time jobs for qualified U.S. workers. EB-5 direct investment can offer more control and management, more return and exit, and more independence and autonomy, but also more responsibility and liability, more difficulty and uncertainty, and more competition and saturation. EB-5 direct investment requires a careful selection and evaluation of the business and the investment, as well as a thorough due diligence and disclosure of the business and the investment.
EB-5 direct investment is a complex and dynamic type of investment that requires a lot of knowledge and expertise. EB-5 direct investment is also a rewarding and beneficial type of investment that offers a unique opportunity for investors and developers. If you are interested in learning more about EB-5 direct investment, please visit our website or contact us for more information. We are here to help you.