How the US investment visa works
The EB-5 investment visa allows you to acquire a Green Card for you, your spouse and your unmarried children under the age of 21 by investing $500000 (R7.6million) in a qualified EB-5 project.
The EB-5 investment visa allows you to live, work, study or open a business anywhere in the US.
To qualify for a Green Card, the investor has to invest in a project that creates at least 10 jobs for US workers.
There are two ways to invest:
* The direct approach entails investing the funds directly into your own business. The investor has to manage the business and prove that the business has created at least 10 jobs. This approach comes with a large regulatory burden to ensure that the business meets the strict requirements of the EB-5 programme. It also means that the investor has to spend most of his or her time in the US to prove that he or she is managing the business.
* The indirect approach entails investing in an “off-the-shelf” investment project. This means that all of the financing and regulatory requirements are already in place. By investing in such a project, the applicant is able to rely on the indirect job creation method - in other words, by taking the total jobs created over the life cycle of the construction project and dividing it by the amount of EB-5 investors, there will be at least 10 jobs created per investor.
In addition, many projects on the market have pre-approval from the US Citizenship and Immigration Services (USCIS) for having met the requirements of the EB-5 programme, including job creation. If the investor’s goal is to obtain a Green Card and not actively manage a business, this approach is cheaper, more convenient and reduces the risk significantly.
It takes about 18 to 24 months from when the investment is made to obtain a conditional Green Card.
The conditional Green Card is valid for two years. Before the end of this two years, the applicant has to apply to have the conditions on his or her Green Card removed. In order to do so, he or she has to prove to the USCIS that his or her investment has created at least 10 US jobs.
Once the USCIS is satisfied that the investment has met all the requirements of the EB-5 programme, the applicant’s Green Card will be converted into an Unconditional Permanent Green Card. It is at this stage that the funds that were invested in the project can be returned to the investor.
From November 21, the minimum investment amount is set to increase from $500 000 to $900 000. This means that to meet the filing deadline, all applications need to be submitted by the end of this month at the latest to qualify for the investment of $500 000.
All applications that are submitted before November 21 will not be affected by the additional changes to the regulations that also come into effect on this date. These changes raise the eligibility requirements of the EB-5 programme.
Michael Honiball is a director and tax specialist at Werksmans Attorneys.