EB-5 Investor Visa in High Demand
The EB-5 investor visa has been in high demand lately, largely due to a sharp increase in applications from China. The EB-5 visa program is available for investors who invest a minimum amount of capital in a U.S. business. In order to qualify for the EB-5 investor visa, the business investment must meet one of the following requirements:
- The foreign national applicant must invest at least $ 1 million in a new commercial enterprise that creates at least 10 new jobs for U.S. citizens or lawful permanent residents within two years of the investor’s admission into the United States.
- The foreign national must invest $500,000 in a Regional Center in a targeted area in a United States.
- The foreign national must invest at least $500,000 in a commercial enterprise in a targeted employment area, which is a rural of less than 20,000 residents or an area that has experienced high unemployment of at least 150% of the national average.
Each year, there are 10,000 EB-5 visas available to foreigners who invest at least $500,000 in U.S. development projects. In exchange for investing in U.S. development projects, the foreign investor and his or her family members are eligible for green cards, or permanent residency, within two years.
As a result of the high demand for EB-5 visas from China, last summer the State Department deemed the visa “unavailable” to Chinese investors under the 2015 year, which began on October 1, 2014.
Moreover, according to the Wall Street Journal, a senior government official estimated a two-year wait for EB-5 applicants to obtain a visa, starting this spring. “Such a long backlog will cause problems both for investors and U.S. companies that want EB-5 money to start or finish their projects,” said Mr. Yale-Loehr to the Wall Street Journal.
According to the Wall Street Journal, the EB-5 program accounts for less than 1% of the visas issued by the U.S. each year and, until recently, demand for EB-5 visas hadn’t come close to surpassing the supply. In 2013, the U.S. issued 8,564 visas and in fiscal 2012, the total was 7,641.
In addition to high demand from Chinese applicants, applications from South Korea, India, and Mexico are also plentiful. Immigration law prohibits any single country from receiving more than 7% of the visas available in any year, but when a country’s cap isn’t reached, the State Department allows leftover visas to be transferred to another country. Consequently, China has been able to receive more than its 7% share of the allotment.
Experts point out that part of the reason for the increased demand for the EB-5 visa may be Canada’s termination of its investor program, which allowed foreigners to apply for permanent residency in exchange for investing 800,000 Canadian dollars in a multiyear, interest-free loan to the government. Canada eliminated the program in early 2014, saying that it didn’t provide enough economic benefit.
Source: Ronald Shapiro, JD Supra Business Advisor