Is the EB-5 investment visa both a good method to obtain permanent residency in the USA and a good investment?
The EB-5 visa requires the applicant to invest $500,000 in a program offered by what is referred to as an authorized regional center. The United States Immigration and Citizenship Service (USCIS) have so far authorized well over one hundred of these regional centers. In return for the $500,000 investment the applicant, their spouse and their unmarried children under 21 gain all important green cards with permanent residence status in the USA.
Several thousand applicants over the past few years have successfully settled in the USA on this visa which is currently available until 2012. The visa has the requirement that, after two years (referred to as I-829 stage), it is necessary to prove the $500,000 has been held in the authorized program (i.e. not removed) and ten full time jobs have been created.
Those considering the EB-5 visa may have different criteria for selecting the regional center program that best matches their priorities and requirements.
1. Some focus on regional center programs with a proven track record, i.e. a 100% success rate with the initial application, 100% record with removal of conditions (after two years) and return of the $500,000 within a reasonable time period.
2. Some place an emphasis on simply obtaining the green card; they are not worried about seeing the return of their $500,000.
3. Some focus on obtaining a high rate of interest on the $500,000.
When considering the question "is the EB-5 visa both a good visa and investment", it is worth highlighting some of the implications of the three approaches above.
A problem with the first approach is that simply because a regional center fulfilled all the requirements with an earlier program does not mean it will with future programs. Economic conditions have changed dramatically over the past few years; for example the outlook with real estate investments is presently seen as a lot less favorable than it was when applicants first invested in the EB-5 visa. Some property based EB-5 programs may be offering property far in excess of current value.
A problem with the second approach is that it may be difficult to separate the investment performance and the visa. The visa requires the creation of ten jobs; if the investment fails it is unlikely those jobs will be created so not only would the visa investor lose their $500,000 they could potentially lose their permanent residency status.
The third approach carries other dangers; for example assume one invests in a program that focuses on the rate of return, say as an example commercial property or condos in a leisure resort or a mixed investment program. If an emphasis is placed on investment return rather than creating the ten jobs per investor, despite a good return, the immigrant investor may face a problem at the I-829 stage (removal of conditions) as insufficient jobs have been created.
There are two extremes with the regional center programs currently available that offer an important insight into the program.
Seminars are being run particularly in China and the Middle East (to non-English speaking clients) to encourage applicants into various EB-5 qualifying programs. The seminars emphasize the safety of certain programs and investment potential. What they fail to mention is that some of these programs are highly speculative, with the potential investor financing an unproven high risk scheme that has been unable to generate funds from banks or other mainstream commercial resources. The EB-5 investor is therefore seen as a potentially good alternative investment source.
At the other end of the spectrum are EB-5 regional centers which have ongoing programs that fund quasi government bodies for a specific fixed term period. The rate of return on such programs can be low but some of these programs have a one hundred per cent track record of success and have returned the full investment of $500,000 from earlier investors who would probably consider the EB-5 both a good visa and an acceptable investment.
