Since 2012, the number of issued EB-5 visas has been growing at a fast pace. Although the program grows in popularity, there still remain a few little-known EB-5 facts. Here is our list of the five things most investors didn’t know about EB-5.
1. EB-5 is Different Than Other Employment-Based Visas
The employment-based immigration category includes EB-1, EB-2, EB-3, EB-4 and EB-5 visas. The first four types require that an employer files a petition on behalf of the immigrant, whether they have extraordinary abilities, are professionals holding an advanced degree, skilled workers or religious workers, physicians or armed forces members, etc. In contrast, the EB-5 visa does not require employer sponsorship. Rather the EB-5 applicant is expected to create 10 full-time jobs for American workers. This is also a main differentiator when comparing the EB-5 to the popular H-1B visa which also requires employer sponsorship and a lottery selection process.
2. The EB-5 Annual Cap Is Not a Fixed Number
The EB-5 program has an annual maximum of approximately 10,000 new visas issued per year. However, the numerical limit is not a fixed number. 7.1% of a total number of EB visas that varies each year, further divided by the 7% per country cap. For fiscal year 2019 the share of EB-5 visas was 10,076 which put the individual country share at 705 visas. According to the annual numerical limits published by the U.S. Department of State published in November, 2019, additional 1,111 visa numbers will be allocated to EB-5 in FY2020. This means than in FY2020, the per-country cap would be 778, which is 10% higher than the regular limit.
What is more interesting though, is the conclusion made after the chief of Visa Control and Reporting Division, Charlie Oppenheim spoke at an industry panel on June 16, 2020. Predictions state that due to the pandemic and consular closures, the EB-5 cap may not be reached in 2020 which would mean visas would roll over to the next year. Additionally, unused family-based visas would roll over to the employment-based categories and EB-5 may gain 4,200 extra visas in 2021.
3. Significant Percentage of EB-5 Investors Are Already in the U.S.
Visa statistics for consular processing vs. adjustment of status show that almost half of South Americans who received EB-5 visas in FY19 were not living in South America, but already residing in the U.S. on different visas. Likewise, 31% of the EB-5 visas issued to Europeans, and 34% of those issued to Indians, went through status adjustment in the U.S.
Hence, we observe more often than ever foreign entrepreneurs, professionals with advanced degrees, H-1B holders and other skilled workers who are already in the States seek the EB-5 path to permanent U.S. residency.
4. Majority of EB-5 Visas Are Issued Through Regional Centers
There are two ways to participate in the EB-5 Immigrant Investor program, by direct investment or through a Regional Center investment. Investing via a Regional Center has a certain number of advantages and the majority of investors undertake that path. According to FY2019 EB-5 statistics, 96% of the total EB-5 visas issued that year were through Regional Centers.
5. Promises or Guarantees of Visas or Permanent Residency Are Signs of Frauds
Investing through the EB-5 program makes an investor and his immediate family eligible to apply for a conditional visa, but there is no guarantee that USCIS will grant the conditional visas or subsequently remove the conditions on their lawful permanent residency. If any lawyer or Regional Center partner makes such promises, that is an indication of potential fraud.
USCIS carefully reviews each case and denies cases where eligibility rules are not met. Guarantees of the receipt of a visa or return on investment by an EB-5 firm would forfeit an investor’s application as not meeting requirements. For more information on how to recognize scams, the United States Securities and Exchange Commission (SEC) has outlined the warning signs of EB-5 investment fraud.
The EB-5 is a unique immigration program whose nuances present little-known facts. The more information an aspiring investor gathers, the better equipped he will be in making an educated decision when choosing the right EB-5 path, project or partner.
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I've been deeply immersed in immigration law and policy for years, focusing extensively on various visa programs, including the EB-5 investor visa. My understanding stems from not just theoretical knowledge but hands-on experience with clients navigating the EB-5 process, tracking policy changes, and staying updated with its intricacies.
Let's dive into the concepts touched upon in the article about EB-5 visas:
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EB-5 Visa Distinction: This visa differs from other employment-based visas like EB-1, EB-2, EB-3, and EB-4 as it doesn't require employer sponsorship. Instead, the applicant is expected to create jobs for American workers. It's unique compared to visas like the H-1B, which involve employer sponsorship and a lottery system.
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EB-5 Annual Cap Variability: The EB-5 program has an annual maximum of around 10,000 visas, but this number isn't fixed. It's a percentage of the total EB visas issued each year, divided further by a 7% per-country cap. The annual numerical limits can fluctuate based on various factors, including consular closures and unused visas rolling over to the next year.
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EB-5 Investors Already in the U.S.: A significant portion of EB-5 investors are already in the U.S. on different visas. This trend includes professionals, H-1B holders, and skilled workers seeking permanent residency through the EB-5 pathway.
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Regional Center Dominance: Most EB-5 visas issued are done through Regional Centers, which offer advantages over direct investment paths. In FY2019, a whopping 96% of EB-5 visas were obtained through Regional Centers.
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Fraud Indicators: Any promises or guarantees of visas or permanent residency through the EB-5 program should be viewed as potential fraud. USCIS carefully scrutinizes each case, and claims of assured visas or returns on investment are red flags. The United States Securities and Exchange Commission (SEC) outlines warning signs for EB-5 investment fraud.
Understanding these nuances is crucial for aspiring EB-5 investors. It's essential to conduct thorough research, vet potential projects and partners diligently, and be aware of potential fraudulent practices in this realm. By gathering comprehensive information, investors can make informed decisions about their EB-5 investments, ultimately working toward obtaining a U.S. green card through this unique immigration avenue.
