Commentary

The EB-5 program demystified


Statue of LibertyIt would be an understatement to say that America’s economy is not doing well. While the amount of debt incurred is not increasing exponentially—as it once was—it is making a very slow recovery. As a result, many entrepreneurs have suffered from the recession; funding is scarce, and that’s why there’s no better time than now to turn to or leverage the EB-5 program.

This is a guest post by Kim Bureros, of EB5investors.com.

The EB-5 program is a way for foreign entrepreneurs to gain citizenship in the US by investing $1 million in an American business or $500,000 in a targeted employment area (TEA). TEAs are rural areas with high unemployment—all the more reason to create jobs. To ensure a visa, the investment must prove that the project has created at least 10 jobs in two years. If that requirement is met, then the immigrant investor, their spouse, and any children 21 and under, receive immediate citizenship in the US. As an added benefit, the investor and their family do not have to live in the area they funded.

So the question becomes, how can your business qualify for funding from the EB-5 program?

According to the US Citizenship and Immigration Services (USCIS), there two basic requirements:

1)      Must be a new commercial business or a business that’s been sorely injured in the economy—typically, this is measured over 1-2 years and if the net loss exceeds 20%.

2)      With funding, the project or company must be able to quantify that they can produce 10 jobs or increase net gain by 40%.

These are minimal requirements for $1 million in funds and yet, this program not only boosts the economy, but also promotes the free-market. Entrepreneurial businesses have the potential to succeed with foreign entrepreneurs. This colossal cooperation is stimulating the American economy and keeping optimism alive.

The biggest hurdle for small business beneficiaries and EB-5 immigrant investors alike is how to network. The EB-5 program, on its own, requires the immigrant investor to find a business in America to support and invest in. This can be a difficult process, but, when it is successful, provides the investor a base of involvement in the business. However, this can be suboptimal for those ventures which are struggling to survive and now have an investor to appease who does not know their market, their product or their needs. This is why the USCIS has created another version of the EB-5 visa called the EB-5 Pilot Program, which involves what are known as Regional Centers.

Regional Centers permit little immigrant investor influence, and instead, determine at their own discretion where the funding should go. This approach could involve funding several entrepreneurial or damaged business projects, or submitting all the funds to one EB-5 project. In either case, these are readied funds which will promote growth in the US economy, and as long as the two criteria are met, businesses can continue to grow and prosper, while immigrant investors are welcomed into the country as citizens.

By Kim Bureros, of EB5investors.com.

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  • Jill

    I think US economy is doing very well after EB5 program progress

    http://www.eb5extell.com

    • Rana Nadeem Akhtar

      can you reply me