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This guest post was contributed by Square 1 Group, a real estate web design company.
The United States is eager to attract investors from abroad, offering a range of incentives to foreign investors. In this post, we’ll look at how you can turn your investment dollars into a passport to a vibrant and fast-paced economy!
Congress created the EB-5 program in 1990 to stimulate foreign investment, and applications have surged. In 2010, USCIS received fewer than two thousand applications for the entire year, but by 2015 the entire allotment of 10,000 visas were “taken” by August. Although the EB-5 program is most popular with foreign investors from China – with South Korea in second place – this program also offers a solid opportunity to investors from Canada. In fact, until recently, Canada had its own EB-5 equivalent program for foreign nationals looking to move “up North.”
The EB-5 program has become extremely popular with US companies hoping to snag investor capital in the wake of the recession, with domestic investment capital more scarce. Many EB-5 participants see the program as a partnership, allowing domestic corporations to create durable jobs in exchange for access to capital from foreign investors. We’ll look at these requirements in more detail below.
The EB-5 program is administered by USCIS (United States Citizenship and Immigration Services).Entrepreneurs, as well as their spouses and unmarried children under 21, can apply for a green card if they satisfy two investment-oriented criteria. Obtaining a visa under the EB-5 process generally takes between 18 and 26 months, much speedier than the several-year commitment required by other US visa programs. Canadian applicants may receive a conditional visa as soon as six months after funds are deposited.The EB-5 program also has flexible residency requirements for people seeking to maintain a home life in Canada.
In a nutshell, the two requirements for an EB-5 visa are financial investment and job creation. Applicants have to invest in a commercial enterprise in the United States and make a plan to create or preserve no fewer than ten permanent full-time jobs for US workers.
Many investors choose real estate, contributing funds to hotels, condominiums, office towers, and public/private buildings in order to take advantage of growing markets in high-profile metropolitan areas. Normally, the rate of investment is $1,000,000, although some program options allow visa seekers to halve that amount.
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It’s important to understand how these numbers break down, since they have a significant impact on your role and responsibilities. The EB-5 program offers you the opportunity to become a direct investor in a US-based enterprise, with a minimum contribution of $1,000,000. You must directly oversee the business, which may be challenging. You will also be responsible for financial investment and job creation. This could be an attractive option for visa seekers looking to expand a franchise or other established business.
However, there is an alternative. One oft-overlooked loophole in the EB-5 requirements is the Immigrant Investor Program, also known as the Regional Center Program. This carveout sets aside EB-5 visas for applicants investing in commercial enterprises in targeted, USCIS-approved regional centers known as Designated Regional Centers or RCs. RCs are intended to promote economic growth and relieve high unemployment. Participants investing under these strategic funding guidelines can invest $500,000 instead of $1,000,000. (Note: the EB-5 program is up for renewal on September 30, 2016, and the $500,000 amount may increase.) They can also participate as passive investors, without the same level of direct input.
Apart from the hefty discount, investing in a Designated Regional Center simplifies your application. The EB-5 program requires a detailed proposal to ensure that your funds are will have a strong impact. You must justify every aspect of your choice, which can be difficult for a foreign national looking to break into a new industry.
If you choose a Designated Regional Center, much of this grunt work is already complete – USCIS has already determined that these communities are a promising, target-rich environment for your money. However, research is crucial –many of these regional centers were created solely to serve as a “landing pad” for foreign investment, and they may not be a good fit for you or your funds.
Although smaller industrial cities like Cleveland and Pittsburgh may seem less attractive, they offer many opportunities for the creative investor. They often promise lower labor and land costs for real-estate development, and are increasingly attractive options for young professionals looking to settle down. You can find a list of approved Regional Centers on the USCIS website. Some – like Milwaukee and Detroit – may have geographical advantages for Canadian companies.
The United States economy offers invaluable market access – and as USCIS’ own priorities show, opportunities are highly diverse and evolving. Why not take advantage of this tailored investment partnership option, and in the process secure a United States visa?
About the Author: Square 1 Group is a boutique web development team based in Los Angeles, California. Our real estate experience and our digital marketing expertise makes us an ideal fit for real estate agencies looking to expand their business online. We provide all our clients with individualized support and maintenance; online marketing services; and content creation, and we are passionate about delivering custom services to the websites and companies we work with.