The U.S. EB-5 visa program is the same as the employment-based 5th preference visa category. EB-5 is a program that was created by Congress in 1990 as a way to stimulate foreign investment in U.S. businesses and create jobs for U.S. workers. In return for making these capital investments, foreign nationals and their immediate family members could qualify for U.S. green cards.
For many years, the EB-5 Program only required foreign nationals to invest $500,000 in a TEA project, or $1,000,000 in a non-TEA project; however, in November 2019, a new rule passed, increasing the investment requirement to $900,000 in TEA projects and $1,800,000 in non-TEA projects.
What does TEA mean? TEA stands for targeted employment areas. These are areas that are either rural or have a high unemployment rate that is at least 150% of the national average unemployment rate.
Eligible foreign nationals may qualify for EB-5 green cards if they’re investments meet program requirements. The main requirements include:
Making and sustaining the minimum investment amount into a U.S. job-creating new commercial enterprise for a certain period of time. The minimum investment amount is $900,000 for a TEA project or $1,800,000 for a non-TEA project. The investor must be credited with the creation of 10 full-time jobs for U.S. workers. Depending on whether or not the EB-5 investor choice to invest in the Regional Center Program or the Direct Investment Program, the requirements for what job creation counts differ. Finally, the investment must remain at-risk for the duration of their conditional visa period.
What are the differences between the two EB-5 pathways that were mentioned above? There’s the Regional Center Program and the Direct Investment Program and the main differences between the two programs concerns the level of involvement an investor wants in their investment as well as how job creation is counted towards the program requirements.
The Regional Center Program allows investors to take on policy-maker positions which do not involve hands-on day to day management of the investments. Whereas, the Direct Investment Program often intrigues foreign nationals who are more interested in the day-to-day operations of their investments. The benefit of being more involved in the management and operations means that the investors often have more control of their rate of return. However, these investments can be riskier than Regional Center Program investments. Additionally, a benefit of the Regional Center Program is their ability to count indirect and induced job creation as well as direct job creation. The Direct Investment Program can only count direct job creation and therefore, the Regional Center Program investors may have an easier time fulfilling job creation requirements.
Depending on the goals and risk tolerance of the investor, either program can be a great fit. Both program routes may lead to EB-5 visas and both can qualify for TEA designations and the lower investment threshold, although the Regional Center Program utilizes TEA’s more often.
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