The EB-5 preference category was created to encourage foreign nationals to invest in either a new commercial enterprise in the U.S. or an already existing U.S. business that is struggling. Now, more than ever, the EB-5 preference category is especially beneficial to both the United States and foreign national investors alike. With the ever present and continually growing immigrant visa backlogs, the EB-5 preference category is one way to circumvent the uncertainty and delays associated with traditional employment-based immigration. Moreover, the U.S. economy, and particularly small business, desperately needs outside investment to help maintain and create jobs for U.S. workers.
The threshold investment to qualify for the EB-5 preference category is quite steep: at least $1,000,000 or, if investing in a "targeted employment area," at least $500,000. Although the $1,000,000 investment is likely out of reach for most foreign nationals, the $500,000 investment in a targeted employment area is more attainable. If a foreign national has the ability to make such an investment, they should not discount the EB-5 preference category as a viable option. A targeted employment area is defined by the United States Citizenship and Immigration Services (USCIS) as "a rural area or an area that has experienced high unemployment of at least 150 percent of the national average." Considering the national unemployment rate is currently averaging 10%, a targeted area of employment would be a rural area or an area with at least 15% unemployment.
Depending on whether the foreign national invests in a new enterprise or a troubled business will dictate whether they need to remain involved with the business. If the foreign investor does not want any commitment beyond making their investment, they should consider investing in an existing U.S. business that is struggling. A troubled U.S. business for EB-5 investment purposes is one which has been in existence for at least 2 years and has incurred a net loss of approximately 20% of the business' net worth in the preceding 1 to 2 years. If the foreign national investor would like to invest in a new business venture, they must remain involved with the enterprise and manage the day-to-day operations to help ensure its continued success. While an investment in a troubled business need only preserve a certain number of jobs, an investment in a new enterprise must create at least 10 additional full-time jobs for U.S. workers.
If a foreign national has the means to make the size of investment required by the EB-5 preference category, they should seriously consider it. Not only would it help them and their family members obtain green cards much faster, but it would also help to bolster the U.S. economy and create or preserve many vital jobs for U.S. workers.