Since 1993, the EB-5 investor green card has allowed Canadians to invest $500,000.00 to $1 million in a business enterprise in exchange for a green card. For new investments in non-rural, non-targeted employment areas (TEA), the required investment $1 million plus the creation of 10 new direct jobs for U.S. workers. The Canadian citizen is also required to directly oversee the development of the enterprise.
If the investment was in a rural area, or a TEA, the investment amount was reduced to $500,000.00, plus the creation of 10 indirect jobs for U.S. workers. To qualify as a TEA, an area must have an unemployment rate of 150% of the national average or be located in a rural area with fewer than 20,000 people.
2019 changes to the EB-5 program
In July 2019, the Department of Homeland Security announced significant changes to the EB-5 program. Specifically, the $500,000 investment amount for regional centers or TEA’s will increase to $900,000 starting November 21, 2019. Further, the $1 million investment requirement for non-regional centers or TEA applications will increase to $1.8 million starting November 21, 2019.
How do I apply for an EB-5 green card?
Generally, the Canadian citizen has to put the entire $500,000.00 or $1 million at risk. The funds may be derived from gifts, but they must come from lawful sources. Upon deposit of the funds, the application process takes approximately six months. Upon approval, the Canadian citizen receives conditional residency – similar to the conditional residency received by a foreign spouse in marriage green card cases. Three months before the two-year anniversary of conditional residency, the Canadian citizen must apply to remove the condition, thereby making him/her a permanent resident.
Is there an easier way to get a green card?
The majority of Canadians seeking a green card would opt for the $500,000.00 green card since: 1) it is half the price; 2) does not require direct management of day-to-day operations; and 3) it only needs to show the creation of ten indirect jobs. However, applying for an EB-5 green card and demonstrating that your new/proposed business meets the requirements takes a lot of time and money. Fortunately, foreign nationals looking for a green card with minimal effort can look to investing in a Designated Regional Center.
What is a designated regional center?
A designated regional center (RC) is a USCIS pre-approved investment/enterprise that has already met the requirements to accept $500,000.00 investments in exchange for a green card. In other words, investors do not have to show that the enterprise is in a TEA or rural area, or that it has created 10 jobs. This has already been done by the individuals/groups who created and had the RC approved. The Canadian citizen has to invest $500,000.00 in the regional center of their choosing ($900,000 after November 21, 2019). As of July 2019, there are over 880 Regional Centers in the United States. However, many of them are shell companies that were started simply to get investors – but not offering any legitimate business to invest in. As a result, most of investors in these regional centers have their EB-5 application for green cards denied. There are probably only a handful of regional centers that are legitimate, operating companies. These centers have 100% – or near 100% – approval rates for EB-5 green cards. Any denials in the green cards usually stem from the source of investor funds – and not from the viability of the RC’s business model. Thus, even though there are a lot of regional centers, investors only have a few choices if they want a good shot at getting a green card.
Advantages of the EB-5 green card
Some of the benefits of an EB-5 green card have already been discussed. You get a green card within six months and are thus free to live, work, study and do anything you want in this country (legal, of course). Another benefit is that your spouse and children under 21 can all qualify get green cards under the same $500,000.00 investment. For example, if you are married with four children under 21 years of age, that would mean your family is entitled to 6 green cards for $500,000.00 (if you invest in a RC). Most foreign investors put the $500,000.00/$1 million simply to get a green card and do not expect a return on investment. However, some of the legitimate RC’s do, in fact, offer a return on your investment. So for those of you who want something more than just a green card, picking the right RC could yield a financial return that would be icing on the cake.
Disadvantages of the EB-5 green card
Of course, there are downsides to an EB-5 green card. Investing $500,000.00 into a regional center has the same inherent risks as investing in anything else – such as stocks, bonds or mutual funds. There is no guarantee of a return on investment, or even a return of the principle amount. You run the risk of losing it all if the regional center you invested in loses business or ceases operations. You also run the risk of losing your conditional residency if the regional center ceases operations prior to your removal of the condition. Performing appropriate due diligence on several regional centers is paramount to ensuring that you make the best decision possible.
Why would I want to invest in an EB-5 when I can move to the U.S. on other visas?
There are many reasons people elect to seek an EB-5 green card. Perhaps they are currently on a visa that does not allow for adjustment of status to a permanent resident, such as an E visa. Perhaps they are eligible for an employment-based green card, but the priority date is not yet current, such as an EB-3 green card. Perhaps they are wealthy entrepreneurs who are looking to start a business in the U.S. and a green card is simply a nice side benefit. Whatever your reasons, the EB-5 is certainly a great path to an expedited green card.