Sudden price increase of the EB-5 visa from $500,000 to $900,000 is probably the most discussed topic in the field of investment migration nowadays.
The logical explanation of such a sudden spike in price would be the increased demand. Meanwhile, the USA authorities want to regulate this issue by means of new limitations introduction.
So, when one is considering the possibility of applying for the EB-5 visa, one should clearly understand the benefits it provides, as well as its peculiarities. Especially minding the newly introduced cost of the visa.
Before we tell you more about the novelties, let us take a look at the general information about the EB-5 visa.
EB-5 is a business visa issued by the USA to foreign citizens in exchange for a certain investment in the American economy, specifically — into local businesses. The program was introduced in 1990 as a temporary initiative. However, it is being extended on a regular basis, as the program has proved to be commercially and socially effective. Moreover, investors from all over the world have shown interest in it. The US authorities made this gesture in order to ensure an inflow of foreign capital, new jobs creation and to improve economic stability in underdeveloped regions. The minimum investment is $900,000. In exchange for this contribution, an investor and their family members receive official residence permit (Green Card) in the United States of America. After a while, one can receive American citizenship, as well. As of today, it is one of the fastest residence programs in the USA. The processing takes up to 3 years. Based on the experience of the previous years, it can be concluded that the investment can be returned in 5 years (from 4 to 6 years).
Pay attention to the graph showing the dynamics of EB-5 issuance to foreign investors (and their families) from 2010 to 2018, according to EB-5 Industry Analytics: The evident conclusion to be drawn from this graph is that the demand is growing rapidly and the growth rate tendency is maintained each coming year. The program has three major benefits:
Pay attention to the fact that the investment program is getting more and more popular among investors from China, Vietnam, South Korea, Taiwan, India and Russia. Below is the number of EB-5 visas issued to top-6 nationalities for the last 3 years:
It should also be noted that the US authorities introduced the quota for this type of visas, according to which not more than 10,000 EB-5 visa applications can be reviewed within a one-year period. This limitation has caused additional interest among potential investors. To explain the reasons for the increasing demand, it is important to outline additional benefits the EB-5 visa provides:
There are two investment options. The first option is to invest into one’s own business in the territory of the United States and to create 10 job positions, with the investment amount corresponding at least $1,800,000. The second option is to invest $900,000 into the projects of the US regional centers. NB: Based on statistic, 95% of investors choose the second variant, which can be explained by the following:
We suggest that you make a choice in favour of the second option, as it is the most popular among investors. The table of expenses that incur in connection with the EB-5 visa issuance is provided below:
|2||Regional center fee||50,000|
|3||USCIS fee upon the first I-526 petition filing||3,675|
|4||USCIS fee upon the I-485 form filing (after two years)||1,225|
|5||USCIS fee upon the I-829 from filing (after 3-4 years)||3,675|
The final amount of expenses will depend on the number of family members. The profitability of investment often varies from 0,25% to 1% annually. The average term for investment’s return is 5 years (within 4-6 years). Thus, after 5 years, the investor can return $900,000 and receive up to 1% from the investment. Any business visa is not a whim, but a tool for solving specific problems. In order to cover this issue in detail, we suggest you take a look at the actual cases from former or active clients of MIGRONIS.
Here are two main reasons why parents decide in favour of the EB-5 visa:
Moreover, the USA is the world center of the most prestigious educational facilities, where one can find over 50 universities included in various rankings of the most respected educational institutions. One should also not forget about 8 elite US universities of the Ivy League. Talking about employment prospects in the US companies, they have two major requirements to their potential employees: to have a diploma of the respectable US university and US work permit. This is why if children receive education in the United States and have a Green Card, it is easier for them to find a well-paid job with career prospects. Look at the following comparison: the average salary of an IT specialist in California is $250,000-300,000 annually, before tax, while in the rest of the world this amount is 10 times lower. It should also be noted that US universities diplomas are highly appreciated worldwide and serve as documents that can make their graduates stand out in the crowd of other candidates. Finally, one more thing that deserves a mention. While their child is in the USA and receives education, the child’s parents can stay in their home country and can visit their kid using a valid tourist visa.
What is transparency? It is when all the rules are clear and observed as a set, without any exceptions or privileges. Moreover, the USA is the country that has a huge market of paying customers. Take California, for example, which makes up a separate huge economy of the world, with GDP comparable to such countries as France, United Kingdom, Italy, Brazil and India. American companies always prefer to establish long-term cooperation. For this reason, they tend to sign long-term contracts, with big amounts involved. This concerns the service sector, too.
MIGRONIS has a lot of clients who for various reasons decided to leave their medium and large business and focus on investment into foreign real estate. They live on rent dividends, on interest from deposits and other investment instruments. In fact, they enjoy their lives to the fullest, without participating in business processes and operational management. If you have ever been in Florida, you could see quite a noticeable number of adults riding convertibles, playing golf and walking with their grandchildren along the coast enjoying the mild breeze and the sound of waves. Why do our clients prefer Florida? Because it can boast of 300 sunny days per year, a warm ocean (unlike California) and everything required for comfortable living. Even if we are talking about Miami apartments, each one has its own pool and gym. One can choose quiet cities, far from the hectic places, like West Palm Beach or Naples. Why is the program so popular among different types of investors? Because it has a very convenient and safe investment procedure.
One can make an investment through regional centers (RC). These are the institutions licensed by the government to carry out investment management under the EB-5 visa program. However, such centers differ to a certain extent. So, before filing the visa application, one should make a well-considered choice of the regional center. Before you choose the RC, you need to get the following information:
Why is it important to carefully choose the RC? Because it is not only about the visa issuance, but also about your investment safety (after 5 years) and its profitability. The investment makes no sense unless it gives you money and it is even worse when it takes money from you. According to the law, the investment should be a risky move, that is why the RC is in fact neither authorized, nor able to guarantee investment return. However, based on the experience of our clients, reasonable selection of the regional center allows minimizing risks. Within the 3-year period, we at MIGRONIS have analyzed 700 US regional centers, so we help our clients to choose reliable RCs and profitably invest their money according to their own goals.
RCs play a role of authorized by the government investors that give credits to American entities for the purpose of specific projects realization. In fact, a regional center is an organization focused on receiving income in favour of the government and on controlling the effective use of the borrowed funds. As a rule, an RC attracts money from investors at a small annual interest rate of 0.5% for further business lending at a 6% rate and capitalizes on this interest difference. For example, let’s take a hotel development:
First, the developer invests their own money, then they attract bank credits and, after all of this, they turn to the investments made through RCs. The process of exiting the investment is conducted in a different order, however: first, the bank returns its funds, then the investors get back their funds through the RC, and the developer gets its funds last. It is more reasonable for the developer to cooperate with a regional center, since such an option is economically more profitable. But it is only one of the possible models, which is also more reliable and attractive for investors. Another model is when the developers use their assets to cover 70% of the project’s cost and the remaining 30% are attracted via regional centers. Finally, the third model is when an RC provides 100% of the project’s cost. In this case, the investment conditions are different, too: for example, the profitability rate may be increased to 3-5%. We recommend to our clients (and you as well) to consider participation in the projects where the bank is among the co-investors. Because before signing the funding approval, the bank carefully checks the developer’s permissive documentation and examines the project. For this purpose, the bank can attract auditing companies and receive a more conclusive opinion. An RC, on its side, also carries out its independent check, including the one related to the immigration law requirements. For example, an RC can check the compliance with the requirement of creating 10 job positions, as applied to every investor. Also, RCs can check if the project is in the “targeted employment area”.
Based on our experience, we have roughly divided the process of the business visa issuance into several stages (we do all the work for the client). STAGE 1 — documents preparation It is the stage of preliminary preparation of the required documents and of dealing with other procedural issues:
It is already at this stage when you should decide on the regional center that will manage the investment. All the relations with the RC are discussed and secured by the correspondent agreement. Procedural issues are being solved within the period from 2 weeks to 2 months. Within 2 weeks, we receive confirmation from the RC regarding the investment fund receipt and I-526 petition acceptance by the Immigration Service. From this moment we start the countdown to the first temporary Green Card approval. STAGE 2 — receiving a Green Card The Immigration Service issues approval. If an investor is located outside of the US, they can receive a Green Card in the consulate. If the investor is in the US, the status can be changed without leaving the country. The first temporary Green Card is valid for 2 years. After this term expires, an investor is entitled to receive a permanent Green Card valid for 10 years. After this, the RC returns $900,000 of investments. There is another important detail to be taken into consideration. Five years after receiving the first temporary Green Card, the investor has the right to apply for US citizenship. In order to do so, one should comply with the following conditions:
NOTE! However, if necessary, you can apply for a tourist passport (Re-entry Permit). It allows you to stay for a long time outside the United States (up to 2 years) without the risk of losing your Green Card.
Along with other equal opportunities, Green Card gives its holder the same rights as citizenship (except for the right to vote and possibility to travel visa-free to 180+ countries of the world). This is why numerous clients of MIGRONIS also consider the described investment model to be a good opportunity to further receive US citizenship.
The United States Citizenship and Immigration Services has finalized and ensured the official introduction of the following changes to the previous EB-5 visa regulations: