Understanding The EB 5 Investor Program
The EB 5 investor program is the only investment based visa program in the United States. This type of investment allows foreign nationals to apply for resident status in the United States in exchange for giving the country a significant investment. The EB 5 program is overseen by the government agency known as the United States Citizenship and Immigration Services.
The standard program is known as the stand alone program, and it is known as the original EB 5 investment program. It can take up to three months longer to process a direct investment application, but many business people consider the direct investment option the better and safer option. It is also considered to be more profitable because it reduces the chance that the investor will lose money, while the return on the investment is higher.
The direct investment option is also the better option when showing the government that the applicant is in compliance with all requirements. This is typically the option that investors choose when they want to invest in nationally recognized franchises.
There are several requirements that must be met when applying for the http://www.eb5diligence.com/eb-5-basics.
New Commercial Enterprise
The investor does not have to establish a new business. However, the investor must invest funds into a brand new commercial enterprise. A new commercial enterprise can be defined as:
• A completely new business
• An expansion of the business
• An existing business that is being restructured for a new commercial enterprise
• A troubled business
The Business Structure
The structure of the business can take several legal forms including sole proprietorship, partnership, Limited Liability Corporation, holding company, joint ventures and business trust. The business can also be traded privately or publicly.
For Profit
The business that the EB 5 applicant invests money into must be a for profit organization. Nonprofit and/or charitable organizations cannot be funded with EB 5 investment money.
Investment Requirement
The minimum investment requirement that an investor needs is $1 million. However, the minimum investment needed for a Targeted Employment Area is $500,000. The USCIS requires that all funds are considered to be “at risk” during the investment time frame, and during the 2 year residency requirement for investors. This means that any attempt to redeem or repay the revenue will disqualify the EB 5 investor from being approved for permanent residency.
Escrow
The capital investment of the EB 5 applicant must be an investment that is at risk and not a loan. No guarantees must be made on the investment, and the investment must meet the at risk qualifications of the federal government. Neither party should mention redemption or guarantees. This means that the entire capital has to be at risk and there cannot be any reserve accounts.
The investor must ensure that no distribution of funds is taken out of the investment capital account. Distributions from profits can be taken out, but these distributions cannot diminish the amount of capital.
These are some of the factors that EB 5 investor applicants should be aware of. They should also consider hiring an experienced immigration attorney to help them with the application process.
