Since the EB5 scheme was set up in 1990, it has encouraged thousands of foreign investors to put their money into projects on US soil in return for a green card.
From a financial perspective it has been a roaring success, generating billions for the economy each year and also putting that cash towards enterprises in areas that have the greatest need of it.
So from an investor perspective, what are the advantages of participating in the EB5 initiative, and are there any drawbacks?
Pro – Minimum investment requirements are modest
In order to apply for an EB5 visa, investors need to stump up just $500,000 to put into a new business based in the US.
This sounds like a large sum in isolation, but where business budgets are concerned it’s comparatively low.
Con – Only targeted employment areas (TEAs) are eligible for entry level investments
The $500,000 minimum we just mentioned is available to investors who plow their capital into TEAs, which are either poorer urban areas or isolated rural regions.
If you want to invest in a part of the state or the country that is prosperous, then this lower limit jumps up to $1 million.
Pro – Investor involvement is variable
For overseas investors who want to get hands-on with building a business in America, this is an option. But regional investment centers are also widely used, and give would-be US residents with enough capital a way to get a visa while taking a backseat role in the actual running of the enterprises they fund.
Con – A green card isn’t guaranteed by EB5 investment
It takes at least two years for the terms of an EB5 visa application to be met and for a visa to be issued, during which time issues might arise with the enterprise in question.
That’s why using a tried and tested EB5 investment affiliate network is the best way to get applications approved and ensure that your capital goes towards projects which have a high chance of thriving in the long term.
Pro – Permanent residence is granted upon being issued with a visa
Getting a green card with an EB5 classification may take time and require patience, but once it has been issued you will be able to become a permanent resident of the US, with all of the perks and privileges that this brings along with it.
This also makes it easier for family members to attain the same status, which is obviously advantageous to investors who have partners and children that they want to bring with them when they relocate.
Con – Your new business must employ at least 10 permanent team members
If you’re hoping to buy a green card by setting up a microbusiness in America, think again. As well as putting up a minimum amount of capital as mentioned, you also need to employ 10 or more American citizens, or those with permanent residence status, to comply with the requirements of the EB5 scheme.
This means you can’t bring trusted colleagues and employees over from other parts of the world to work in the US. This is of course because the main purpose of EB5 investments is to create jobs and reduce the levels of unemployment in TEAs.
Pro – The potential for making a significant return on your investment is appealing
More often than not, EB5 investment is discussed as a means of getting a green card without needing to meet any of the criteria that are usually needed for the US to issue a visa to a foreign national.
However, it’s also worth remembering that this is still an investment opportunity, which in turn means that the money you put into a new business will ideally generate returns over time, and leave you with total or partial ownership of an asset that you can eventually sell.
The bottom line
The upsides of EB5 investment definitely outdo the drawbacks, so long as you are the right type of person with both the money and the business acumen to make it all worthwhile.
You will still need advice and guidance throughout this process, so get reputable experts onboard to ensure that the desired outcome is achieved.
