COMPARISONS FOR EB-5 VISAS

There are three different ways in which to apply for and invest in the US as an EB-5 investor, separate from starting one’s own Regional Center, which can also be addressed. Below are the risks and benefits of the 3 different investment options.

NEW ENTERPRISE

Flexibility – a person can chose where and what industry you want to invest in.
If you have a business in your home country, then you can make your new business a subsidiary.

Business Plan – A business plan is required

Job Creation – Only direct jobs and the creation of 10 jobs or more over the conditional green card period of 2 years will satisfy the requirement

Management and Control – You are able to control the business and its growth. If you can expand the business, you will be the one who profits from the business

Processing time- generally 2-3 months longer than a regional center. Regional Centers usually have USCIS pre-approval

Residence – You are required to live near the business. Not necessarily next door, but in the region.

Benefits of investing $500,000 in a distressed area – risking less of your capital and more control over the day to day operations since it is your business

Drawbacks of investing $500,000 in a distress area – riskier location for investment, usually a high unemployment area. Must live in the same regions (location) of the business. If the business shutters within a two-year period, the investor may lose the entire amount of the investment.

Benefits of investing $1,000,000 – Can invest in any type of business anywhere in the US, which also gives the investor much more control over the investment and the business operations.

Risks – Risk of losing the entire investment if the shuts down in two years, must live in the same region (location) as the enterprise and the investment must be shown to have created 10 or more jobs – if the investment serves to expand an existing business.

REGIONAL CENTERS

Flexibility – Limited: USCIS approves the businesses in the Regional Center and they are usually in specific industries including larger commercial establishments.

Business Plan – Although this has been satisfied somewhat when the Regional Center was established, the investor still has to come up with a plan to show job creation

Job Creation – Job creation in a Regional Center can be either direct or indirect jobs.

Management and Control – There is much less control when investing in a Regional Center. The investor in a Regional Center is actually a limited partner, with no say in the day to day operations of the management. The Regional Center acts as the general partner.

Processing time – Usually the processing time is 2-3 months shorter than the average time utilized by USCIS because of the pre-approval.

Residence – You can live and work anywhere in the US.

Benefits of investing $500,000 – Risking less capital; removes the requirement of having at least 10 employees because the investment can count indirect or induced jobs; not required to be in the day to day management

Risk of investing $500,000 – Little or no control of the investment and the general partners are typically the beneficiaries of the investments; investment is made at high risk area and if the business shuts down in two years, you can lose your investment

Benefits of investing $1,000,000 – Removes the requirements of direct job creation, no investor involvement in day to day operation and investor can live anywhere .

Risks of Investing $1,000,000 – Little or no control of the investment and the general partners are typically the beneficiaries of the investments; investment is made at high risk area and if the business shuts down in two years, you can lose your investment

INVESTING IN AN EXISTING BUSINESS

Flexibility – Inflexible since the business is already in existence and is probably distressed since it is seeking investment

Business Plan – A business plan is needed in order to substantiate the investment’s ability to preserve or create the number of jobs

Job Creation – This is easier since it is an existing business. Investment must be shown to maintain or create jobs or satisfy the numerical requirement of 10 jobs through a combination thereof.

Management and Control – There would be substantial control over the business since your investment is being used to help a distressed business turn around without loss of the investment.

Processing time – about the same time as investing in a new enterprises

Residence – The investor would need to live in the same location where the business is operating.

Benefits of investing $500,000 – Less risk of capital, removes requirement of having at least 10 employees because the investment can count preserved jobs, more control over the day to day operations

Risks of investing $500,000 – If the business shutters in two years, the investment is lost, investor must meet the job requirement- whether counting preserved jobs or creating new jobs, stressed investment by virtue of rescuing a business and being in a distressed area.

Benefits of investing $1,000,000.00. – It removes requirement of having at least 10 employees because the investment can count preserved jobs, more control over the day to day operations

Risks of investing $1,000,000.00 -– If the business shutters in two years, the investment is lost, investor must meet the job requirement- whether counting preserved jobs or creating new jobs, stressed investment by virtue of rescuing a business and being in a distressed area.

The basis for an EB-5 is that in exchange for an EB-5 visa and resulting permanent resident cards for the investor and his family, an investor must be willing to place their capital “at risk” to generate a return. All three categories have benefits and risks. It depends on what the investor is seeking.

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