USA – EB-5 Investor Visa

Introduction

The United States of America has a population over 325 million people that reside in the world’s third largest country by total area. The US represents the world’s largest economy by nominal GDP fuelled by its status as the leading importer and second largest exporter of goods. The country comprises 50 states that offer a wide range of business environments that are ideally suited for all requirements.

As a nation, the US hosts some of the world’s most advanced medical and educational facilities and coupled with its diverse climate and geography make it an ideal gives the holder and immediate family the right to residency in all states, including Texas and Florida which gives access to the public education system at all age levels and the US is also home to thousands of highly regarded private schools, many of which are multi-lingual and provide a route to some of the world’s highest-ranking universities and colleges.

Requirements/Investment Options

The EB5- Visa was created by the Immigration Act of 1990, which provides a proven method for foreign investors and their families (spouse and dependants under the age of 21) to obtain a Green Card (permanent residence).

An applicant must be willing to make a significant investment in the country, as the fundamental purpose of the EB-5 Visa is to stimulate the US economy through job creation and capital investment. In return, foreign immigrant investors are granted all the benefits of permanent US residency.

There are two investment options that an applicant can choose from to successfully obtain an EB-5 Visa:

Direct Active Investment

Requires a minimum investment of USD$1.8 million, or a minimum investment of USD$800,000 if investing in TEA’s (Targeted Employment Areas) with unemployment of at least 150% of the national average, or rural areas. The investment being in a new commercial enterprise/ job creating entity. Alternatively, the required investment can be in an existing commercial enterprise/ job creating entity.

The investment must create 10 full time jobs or under certain circumstances can preserve 10 full time jobs, excluding the investor and their immediate family members. There may be a possibility that the new or existing commercial enterprise managed by the investor can create the required number of jobs, directly, indirectly or induced. The investor will actively manage and supervise other employees, the day-to-day operations, and will be involved in policy formation of the new commercial enterprise/ job creating entity.

Regional Center Passive Investment

The required investment can be in a new commercial enterprise/ job creating entity, which entered into a licensing relationship with a company designated by the USCIS as a Regional Center (i.e. the Regional Center designation covers a geographical area of business activity and employment creation).

In the majority of these Regional Center investments, the projects, the job creating entity, are directed and managed by separate developers and operators than the investor. The investor will usually have a security interest in the new commercial enterprise and have a passive management role in making policy decisions or joint management decisions with the other investors in the commercial enterprise.

Requires a minimum investment of USD$1.8 million, or a minimum investment of USD$800,000 if investing in TEA’s with unemployment of at least 150% of the national average, or rural areas. The investment being in a new commercial enterprise/ job creating entity. Alternatively, the required investment can be in an existing commercial enterprise/ job creating entity. The investment must create 10 full time jobs or under certain circumstances can preserve 10 full time jobs, excluding the investor and their immediate family members. Under the Regional Center designation, the new or existing commercial enterprise / job creating entity, can create the required number of jobs, directly, indirectly or induced.

Summary of the Process

There are over 800 approved EB-5 Regional Center projects across the United States. Investors should focus on Regional Centers with a successful track record, ensuring projects are financially viable, managed by credible developers, compliant with EB-5 immigration requirements, and have a clear exit strategy. RIF Trust will guide investors through the selection process.

The first step is for the EB-5 investor to sign a Representation Agreement with a qualified U.S. immigration attorney experienced in providing immigration due diligence and legal advice regarding EB-5 project documentation.

The attorney’s legal fees range from USD $20,000 to $25,000 plus costs (government processing fees, copying, and mailing). This covers the preparation and filing of the EB-5 petition. Once the petition is approved, the next step involves filing applications with the U.S. consulate for conditional permanent residence for the investor, spouse, and minor children. The final step is filing a petition with USCIS for unconditional permanent residence after the two-year conditional period.

When transferring the required investment to the EB-5 Regional Center project, investors must also submit an administration/syndication fee of USD $70,000 or $90,000.

Dual Citizenship

The USA has no restrictions on dual citizenship.

Taxation

All US citizens and residents, including resident aliens and citizens who reside outside of the US, pay federal tax on their worldwide income. Also taxed as residents are individuals who meet a ‘substantial presence test’, which requires physical presence in the US for 183 days or more during a calendar year. Income tax rates are progressive up to 39.6%.

The maximum rate of capital gains tax is 20%.

For US citizens and residents, a unified estate and gift tax is imposed on the net value of the transferred assets, in excess of USD$5,450,000. The top rate for estate and gift tax is 40%. There is no net worth tax in the US.