With layoffs and uncertainties looming in the US job market, there has been a spike in applications for EB-5 (Investor visa) as the best route to permanent residency in the US. According to Nicholas A Mastroianni, III, president and chief marketing officer of US Immigration Fund (USIF), there are around 150 EB-5 inquiries per day, mostly from skilled workers already in the US who have either been laid off or are worried about losing their jobs.
Created in 1992 by the US Congress for boosting the US economy through foreign investments, the EB-5 Regional Centers act as a medium between the investor and EB-5 Projects. Under mandate by Congress, Regional Center EB-5 petitions are given priority often resulting in a quicker path to approval, as such they are the quickest route to EB-5.
Known as EB-5 for the name of the employment-based fifth preference visa that participants receive, the program is one of the most sought-after options for permanent residency in the United States. The USCIS (United States Citizenship and Immigration Services) administers the EB-5 Program under which investors (and their spouses and unmarried children under 21) are eligible to apply for a Green Card (permanent residence) if they make the necessary investment in a commercial enterprise in the US; and plan to create or preserve 10 permanent full-time jobs for qualified US workers.
An EB-5 Regional Centre is an economic unit, public or private, in the US that is involved with promoting economic growth. The USCIS designates regional centres for participation in the Immigrant Investor Program.
Earlier this year, President Joe Biden had signed a law that includes authority for an EB-5 Immigrant Investor Regional Center Program that will be in effect through September 30, 2027. New Visa categories have been introduced to enable investors from backlogged countries primarily China, India, Vietnam to bypass any potential lines and obtain visa quickly. Priority processing is been given to rural projects.
“The demand for EB-5 has been growing and in the past three years the numbers have grown exponentially. In 2019, 3,659 applications for investment were passed under the EB-5 program. In 2020, the number rose to 51,936, and 59,028 in 2021. In the first 7 months of this year (up to July 2022), the number of approved EB-5 approvals has touched 18,095,” according to Varun Singh, managing director, Bengaluru-headquartered Xiphias Immigration.
EB-5 Regional Centre vs EB-5 Direct Investment: An investor can choose between two EB-5 programs: EB 5 Regional Centre and EB 5 Direct Investments. Although these two investments look similar, there are key differences.
Job creation methodology
Direct Investment: Only salaried positions at the new commercial enterprise are counted as jobs toward the EB5 investment.
Regional Centre Investment: Both salaried staff and indirect employment coming from the project’s involvement in the local community are counted as jobs.
Control over the business
Direct Investment: The investor (or the co-owners) is the sole owner of the business who will be the main decision maker and influencer of the company and is greatly Involved in business operations.
Regional Centre Investment: Might have a hundred investors with the EB-5 investor being just one of them. The investor is a limited partner with minimal participation in the business operations but has voting rights and gets the benefits awarded for being a limited partner.
Return on Investment (ROI)
Direct Investment: Potentially offer higher rates of return. There is more control, minimising business failure or other difficulties.
Regional Centre Investment: If it does not raise enough finance, the project may never get off the ground while the initial investors continue to incur costs. However, under the EB-5 Reform and Integrity Act of 2022, a new investor-friendly feature has been introduced that allows the investor to switch projects in case a new commercial enterprise (NCE) or a Regional Centre were to be terminated.
Advantages of choosing EB-5 Regional Centres:
• The burden of job creation does not fall on the shoulders of the investor. The Regional Centre program removes the 10 direct-employee requirements of the Traditional EB-5 Program, and substitutes a less-restrictive “indirect employment creation”.
• As a limited partner, the investor has limited policy-making involvement, yet no business making or day-to-day management authority. Thus, for the vast majority of immigrant investors not interested in day-to-day or active management of a business, Regional Centre programs offer the most attractive option.
• This program also protects the investor, as the investor is only liable to the extent of the EB-5 investment amount.
• The investor is not required to live in the place of investment. He/she can invest in one state of the US and live in another. For example, the investor may invest in a Regional Centre in the California, but can live in New York.
Filing fees: Starting July 12, 2022, Forms I-526 and I-526E has to be submitted in accordance with the new program requirements. For each form, there is a filing cost of $3,675. The EB-5 Reform and Integrity Act of 2022 has mandated an extra $1,000 fee on and after October 1, 2022.
Processing time: “In general, USCIS will prioritise Form I-526 petitions for investors who have or will soon have a visa. Form I-526 processing times are typically based on an analysis of completed cases from the previous months. The processing time is based on how long it took UCIS over the last six months to complete 80 per cent of adjudicated cases. Each case is different, and some may take longer than others. Historically, 80 per cent of cases are completed within 52.5 months, as reported by UCIS,” Varun Singh added.
EB-5 Regional Centre Success Rate: On an average, the acceptance percentage for I-526 petitions ranges between 75 per cent and 80 per cent. Overall, the approval percentage for I-829 petitions exceeds 90 per cent. Generally, an applicant who obtains approval for the I-526 form will seek permanent residency status with conditions.