On Internet Business

The EB5 visa program for entrepreneurs

Posted by Michael under Entrepreneur Resources, Leadership

EB5 is a visa program that offers permanent residency in the US for foreign entrepreneurs and investors. Under this scheme, entrepreneurs who create a new commercial enterprise or invest in a ‘troubled’ business in the US are entitled to US residency and eventual citizenship.

The purpose of the program

This visa preference category allows immigrants to enter the United States in order to invest in a new commercial enterprise that will benefit the US economy and create at least 10 full-time jobs or to invest in a troubled enterprise. Essentially it’s a preference system to boost the current economy or drive new growth.

EB5 Criteria

To qualify for the new business entrance you must:

1. Invest or be in the process of investing at least $1,000,000 or $500,000 in a designated target areas.
2. Benefit the U.S. economy by providing goods or services to U.S. markets.
3. Create full-time employment for at least 10 U.S. workers.  This includes U.S. citizens, Green Card holders (lawful permanent residents) and other individuals lawfully authorized to work in the U.S, but not you, your spouse, or children.
4. Be involved in the day-to-day management of the new business or directly manage it through formulating business policy.

Troubled business investment criteria are that you must:

1. Invest in a business that has existed for at least two years.
2. Invest in a business that has incurred a net loss, based on generally accepted accounting principles, for the 12 to 24 month period before you filed the Form I-526 Immigrant Petition by an Alien Entrepreneur and that loss must be equal to 20% of the business’s net worth before the loss.
3. Maintain the number of jobs at no less than the pre-investment level for a period of at least two years.
4. Be involved in the day-to-day management of the troubled business or directly manage it through formulating business policy. 
5. The same investment requirements of the new commercial enterprise investment apply to a troubled business investment ($1,000,000 or $500,000 in a targeted employment area).

What are the drawbacks?

1. The EB-5 visa program is currently due to end in 2012 and average time from application to approval is six to nine months so it’s necessary to allow enough time for your application.
2. You may find the administrative load heavy – a vast amount of paperwork is needed to maintain your green card status.
3. Many people have found they need to hire a legal specialist to complete their application and this can add substantially to the cost of the programme.
4. Unlike Europe where tax payments depends on the country where you reside, the USA charges income tax on all US citizens and permanent residents based on worldwide income irrespective of where they live.

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