As a foreign entrepreneur looking to immigrate to the US, deciding to make an EB-5 visa investment is the first concrete step towards securing your Green Card. But the decision to take this pathway toward permanent residency isn’t the only major choice you’ll have to make.
Once you have gathered your capital, it’s time to pick what project to fund. And, the choice you’ll make will have a great impact on your ROI, investor risk, and likelihood to secure a visa.
Direct vs regional center investments
There are many reasons why the US consistently ranks as one of the best countries to start a business, including the fact that the economy provides plenty of opportunities to multiply your invested capital. However, not all investments come with the same potential or risk level.
When allocating your EB-5 capital, choosing wisely between investing in a regional center or making a direct investment can impact your chances of successfully becoming a permanent resident of the US and receiving capital gains.
Here’s an overview of the two options:
- Direct investments will require you to invest in a new or existing commercial enterprise, in which you will retain most of the managerial control. Direct investments are best for entrepreneurs looking to maintain a hands-on approach and access unlimited ROI potential, but they can be riskier.
- Regional Center Investments – regional centers are entities designated by the USCIS to gather and allocate investors’ funds towards projects that will benefit the US economy. Choosing to invest in a regional center project can reduce your investor and immigration risk, but can curb your future capital gains.
Regardless of the project category chosen, you should keep in mind that the EB5 program requires the capital to be “at-risk”, and investors can lose their right to a Green Card if they are unable to create and maintain at least 10 full-time jobs for qualified employees.
5 types of EB5 visa investments for foreign investors
If you are unsure about the best type of EB5 visa investment for your goals, working with an experienced lawyer can help you assess your risk tolerance, offer insights into a certain industry, and understand each project’s potential for returns.
What’s more, a visa attorney can help you understand the current EB-5 processing times and how much time the approval takes.
Here are five options to consider.
Directing money to an existing business
Partnering with a local business owner who understands the industry and is in the process of raising funds can benefit both parties.
Launching a new commercial enterprise
If you have a solid track record of launching successful businesses, and you have an in-depth understanding of the US economy, you might consider launching a new commercial enterprise.
This strategy is ideal for those investors with a high-risk tolerance who wish to maintain full control over their enterprise and access potentially unlimited capital gains.
Investing in targeted employment areas
Targeted Employment Areas (TEAs) are geographical locations in the US with an unemployment rate that is at least 150% higher than the national average.
Investing in these areas is commonly done through regional centers and requires a reduced minimum investment of $800,000 instead of $1,050,000. Investing in rural areas and TEAs can be a great option to shorten approval times by taking advantage of expedited visa processing.
Taking part in real estate development
For investors looking to benefit from the booming real estate market in the US, taking part in real estate development can yield high returns while curbing immigration risk.
Indeed, real estate development projects are commonly handled by a regional center in charge of pooling investors’ funds and ensuring that enough jobs are created for each investor.
Purchasing a failing business
If you have the experience and knowledge necessary to revitalize a distressed business, investing in an enterprise that is currently struggling or is undervalued can help you gain control over a company without having to start from scratch.
No matter what project you decide to invest in, it is paramount for foreign investors to carry out comprehensive due diligence and reduce the risk of fraud. If in doubt, a specialized lawyer can guide you in the complex process of securing an EB5 Green Card.
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