EB5 Paths to a Green Card

Which path is suitable for Vietnamese EB-5 applicants, Regional Center or Entrepreneur?

The answer to this depends on how much the person is willing to invest, and whether or not he wants to be actively involved in the business and control the financial aspect of the business.

The program of Green Cards for investors began with the Million Dollar Green Card. This required an investor to bring 1 Million dollars to the US to start or purchase a business that would hire at least 10 workers who are US citizens or permanent residents.

Later, to encourage more foreign investment, CIS then allowed a smaller amount of $500,000 to be invested in a rural area or in places where the unemployment rate is at least 150 percent of the national average. These are called TEA (Targeted Employment Area) and they can be located any place, even in the middle of cities.

There are three types of EB5 investments:

(1) A one million dollar Direct Investment.
(2) A 500 hundred thousand dollar Direct Investment in an area with high unemployment. For both the 1 million and 500 thousand Direct Investments, the foreign investor must be present and must be actively involved in the management of the business. He retains complete control of the finances of the business.
(3) A 500 thousand investment in a Regional Center enterprise. A Regional Center is not connected in any way to the US government. It is a private financial venture that arranges for investment in businesses that meet the requirements of foreign investors. The foreign investor simply transfers $500,000 plus a startup fee to the Regional Center. After that, the Regional Center has complete control of the investment money and the financial return to the investor is usually minimal.

To some investors, the Regional Center is attractive because they do not need to be personally involved in the running of a business. And, they are free to live anywhere in the US, can bring their spouse and children under 21 with them to the US, and just need to wait for CIS final approval of the business.

The downside of Regional Centers is that they maintain complete control of the foreign investor’s money. If the Regional Center puts the money in a business that quickly fails, or that does not meet CIS requirements, the foreign investor will have to start the EB5 Green Card process all over again. And there is no guarantee that the investor will see all or any of his $500,000 investment again.

Last year there was some negative publicity about some Regional Centers. Some of them did not maintain the requirement of creating ten jobs for US workers or did not satisfy CIS that they were functioning according to the requirements of the program. As a result, CIS was investigating new Regional Center applications more carefully, and approvals were slower. However, this year also saw CIS approve a number of new Regional Centers.

In any trustworthy Regional Center program, the center will put the $500,000 investment in escrow until CIS approves a visa for the investor. If a Regional Center states that they will start using the money as soon as it is received and will not wait for CIS visa approval, then the investor should be wary.

We do not have a favorite type of EB5 investment. It really depends on whether the investor wants to control the business actively, or whether he wants to allow a Regional Center to do everything for him, with no control over his investment. Both the Direct Investments and the Regional Center investments are at-risk. There is no guarantee that the investor will make a profit. If the business fails, the investor will have to start again, from the beginning.
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Q.1. For EB5 investments, what is the biggest challenge that potential Vietnamese investors face?
A.1. Business and accounting procedures in the US and Vietnam are quite different, so the potential Vietnamese investor may have difficulty providing a complete paper trail for the money he plans to invest in the US.

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Q.2. What about the dependents of Green Card investors?
A.2. An investor’s spouse and unmarried children under the age of 21 can be admitted to the U.S. with the investor. The spouse and children will be authorized to work or attend school in the U.S. If the investment receives final CIS approval after two years, the whole family can be approved for permanent Green Cards.

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Q.3. After a Green Card investor gets his permanent Green Card, how long does he have to wait to apply for US citizenship?
A.3. He can apply for a permanent Green Card after two years and then must wait five more years to apply for US citizenship.

 
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