Attracting Foreign Buyers with E2, EB-5 Visas
There are a large number of financially well off foreign citizens that would like to come live in the United States and preferably get permanent resident status, which can lead to U.S. citizenship. In the first 9 months of 2012, the government approved 3,000 petitions from foreigners seeking to participate in the E-2/EB-5 visa programs. That was nearly twice as much as all of 2011.
The International Sunbelt Business Broker network with its presence throughout the world has access to a large number of those potential buyers. They have substantial funds and are highly motivated to come and live in the United States. They make very good buyers. Buy our presence on 10 of the best world wide web sites advertising businesses for sale, we get substantial inquiries here also from these buyer types. For more information on these government programs continue reading below.
The federal government has two visa programs that can facilitate this if these foreign nationals are willing to make a substantive investment by buying into, buying outright, or starting a new business. The visa programs are:
E-2 Visa. This is a non-immigrant, long-term, temporary visa, issued to a person who makes a substantial investment in an enterprise that is active (“not marginal”) and that the foreign buyer will direct and manage. “Substantive investment” is not defined by a minimum amount. There are, however, certain percentage requirements. For example, a business costing less than $100,000 requires an investment of at least 75 percent; a business selling for between $100,000 and $500,000 requires a minimum investment of 60 percent. The term “not marginal” means that the business must have a large number of employees and/or an established record of profitability, otherwise, the foreign buyer must show proof of an outside source of income with which to sustain him- or herself during the first few years of operation.
E-2 Visas are available to the nationals of the countries which the US has a treaty.
The treaty countries are: Albania, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belgium, Bolivia, Bosnia and Herzegovina, Bulgaria, Cameroon, Canada, Chile, China (Taiwan), Colombia, Congo (Brazzaville), Congo (Kinshasa), Costa Rica, Czech Republic, Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Grenada, Honduras, Iran, Ireland, Italy, Jamaica, Japan, Jordan, Kazakhstan, South Korea, Kyrgyzstan, Latvia, Liberia, Lithuania, Luxembourg, Macedonia, Mexico, Moldova, Mongolia, Morocco, The Netherlands, Norway, Oman, Pakistan, Panama, Paraguay, Philippines, Poland, Romania, Senegal, Singapore, Slovak Republic, Slovenia, Spain , Sri Lanka, Suriname, Sweden, Switzerland, Thailand, Togo, Trinidad & Tobago, Tunisia, Turkey, Ukraine, United Kingdom, and Yugoslavia.
Why E-2 Visa Holders are looking at the EB-5
- Many are familiar with the E2 visa program, which has been the traditional route for immigration to the USA. However, for those who have resided in America for a number of years there has been a degree of anxiety, as well as expense at renewal periods. It is increasingly clear that renewal of the E2 visa cannot be taken for granted however long you have lived in the US.
- New E2 applicants are finding a lengthy waiting period, possibility of rejection, and the need to inject an increasingly high level of funding to find a qualifying business.
- There are particular concerns
If you wish to retire,
- Have children approaching their 21st birthday,
- It you want to remain legally in the USA
Another downside is the E-2 has ‘non-immigrant’ status, which has serious implications few point out.
- There are thousands of E2 visa holders living in the US, sooner or later they are going to have to confront their status and sort it out for the long term. If they sell their business or it ceases trading, their visa will not be renewed. Also, their children at 21 will need their own visas or be forced to leave the US. Such a lack of security may not suit everyone looking to reside in the US.
Compared to other non-immigrant and immigrant visas, the E-2 visa has numerous advantages.
- It “covers” the investor, his spouse and all his children under 21.
- It is initially issued for 5 years, but can be renewed indefinitely.
- There is a relatively short processing time, including premium proceedings that allow an investor to receive a decision within one week.
- An investor can legally work in the US in the enterprise.
- Investor’s spouse can apply for employment authorization and lawfully work either for the spouse’s enterprise or elsewhere.
- The investor, his spouse and children can freely travel outside the US and reenter the US as they please.
Comments from Consular Office
‘I would also like to point out that a non immigrant (E2) visa is not a good option for someone who intends to reside permanently in the United States, If the investor retires or sells their investment, his or her visa status lapses and he or she must leave the US. Only single dependent children under 21 are eligible for visas to accompany their investor parent, and when these children turn 21 they lose their status as a dependent and their visa. The more secure option for those that have the necessary capital is the permanent resident green card EB-5 investor visa. In this case the required investment is one million dollars, or under certain circumstances $500,000.’
John Caulfield, Counsul General, US Embassy London.
Job Creation Requirements
Create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years (or under certain circumstances, within a reasonable time after the two-year period) of the immigrant investor’s admission to the United States as a Conditional Permanent Resident.
Create or preserve either direct or indirect jobs:
Direct jobs are actual identifiable jobs for qualified employees located within the commercial enterprise into which the EB-5 investor has directly invested his or her capital.
Indirect jobs are those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor. A foreign investor may only use the indirect job calculation if affiliated with a regional center.
U.S. Citizenship and Immigration Services:
(USCIS) administers the Immigrant Investor Program, also known as “EB-5,” created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under a pilot immigration program first enacted in 1992 and regularly reauthorized since, certain EB-5 visas also are set aside for investors in Regional Centers designated by USCIS based on proposals for promoting economic growth.
All EB-5 investors must invest in a new commercial enterprise, which is a commercial enterprise:
- Established after Nov. 29, 1990, or
- Established on or before Nov. 29, 1990, that is:
- Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or
- Expanded through the investment so that a 40-percent increase in the net worth or number of employees occurs.
Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to:
- A sole proprietorship
- Partnership (whether limited or general)
- Holding company
- Joint venture
- Business trust or other entity, which may be publicly or privately owned
This definition includes a commercial enterprise consisting of a holding company and its wholly owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business.
Note: This definition does not include noncommercial activity such as owning and operating a personal residence.
Investors may only be credited with preserving jobs in a troubled business.
A troubled business
A qualified employee
A job-sharing arrangement
Capital Investment Requirements
Capital means cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. All capital shall be valued at fair-market value in United States dollars. Assets acquired, directly or indirectly, by unlawful means (such as criminal activities) shall not be considered capital for the purposes of section 203(b)(5) of the Act.
Note: Investment capital cannot be borrowed.
Required minimum investments are:
- General. The minimum qualifying investment in the United States is $1 million.
- Targeted Employment Area (High Unemployment or Rural Area). The minimum qualifying investment either within a high-unemployment area or rural area in the United States is $500,000.
A targeted employment area is an area that, at the time of investment, is a rural area or an area experiencing unemployment of at least 150 percent of the national average rate.
A rural area is any area outside a metropolitan statistical area -SMA- (as designated by the Office of Management and Budget) or outside the boundary of any city or town having a population of 20,000 or more according to the decennial census.
A spouse and unmarried children under the age of 21 may be admitted to the U.S. with the buyer on a two-year conditional period. Once the I-829 petition to remove conditions is approved, then the conditions will also be removed from a spouse and children’s Green Card status. Once a permanent resident, a spouse and children will be authorized to work or attend school in the U.S.
Benefits of an EB-5 Visa
The benefits of obtaining an EB-5 visa include the following:
- Legal permanent residents admitted through the EB-5 Investor visa enjoy many of the benefits of United States Citizens, and their status requires no renewal or re-application. Other U.S. non-immigrant visas, such as E-2 and H1, often never result in permanent residency, have time limits, require additional filing with USCIS, and may require travel to the U.S. consulate in your home country every few years. Furthermore, U.S. immigration laws could change and prevent future approval when visa renewal becomes due.
- The United States is considered a safe haven for the families of permanent residents. Any member of the family granted a Green Card can come into the U.S. at any time and stay as long as they wish (subject to certain conditions regarding length of time when they leave the USA).
- EB-5 investors have constant easy access to the United States for personal and business purposes.
- Permanent residents do not need a visa to travel to the U.S., though they will need their green card. EB-5 investors may live, retire, or own their own business anywhere in the United States.
- The U.S. has internationally recognized colleges and universities for both basic education and graduate study. However, since these vary enormously, it is worth seeking professional advice on this matter. As a resident, the EB-5 investor can benefit from lower tuition costs, particularly in your state of residence.
- The cost of living in the U.S. is often considered lower than other industrial nations. Consumer goods, services, and housing can be considerably less expensive than comparable goods and services in many other countries.
- Students may work in the U.S. while they attend college, to help offset tuition costs. They may also continue working after graduation.
- The U.S. provides many financial, social, and educational entitlements: public schools, higher education and, after a period of contribution, medical and social security benefits.
- After five years, the investor has the ability to bring other family members to the U.S. and obtain U.S. citizenship for them.
- Take any job, run or start any business, even retire.
- Any nationality may apply.
- No language requirement.
- Same privileges as a US citizen:
– Free public school education
– Same university fees.
– Access to Medicare after 5 years.
- Wider job market for your children in the future.
- Property tax savings in some states like Florida.
- Citizenship after five years.
How much does an EB-5 investor have to invest in order to qualify?
In most EB-5 Regional Centers an investment of $1,000,000 must be made in order to qualify and obtain an investor visa.
Foreign investors that can invest $500,000 or $1,000,000 US dollars in a US-based business that has been approved by the federal government as an approved EB-5 Project qualify as EB-5 investors.
Here is the 3 step qualification process for potential EB-5 immigrant investors trying to obtain a visa as outlined by the USCIS.gov website:
“Acquiring lawful permanent residence (“Green Card”) through the EB-5 category is the three step self-petitioning process.”
- The successful applicant must obtain approval of his or her Form I-526 Petition for an Alien Entrepreneur.
- He or She must either file an I-485 application to adjust status of lawful permanent resident, or apply for an immigrant visa at a U.S. consulate or embassy outside of the United States. The EB-5 applicant (and he or her derivative family members) are granted conditional permanent residence for a two-year period upon the approval of the I-485 application or upon entry into the United States with an EB-5 immigrant visa.
- A Form I-829 Petition by an Entrepreneur to Remove Conditions must be filed 90 days prior to the two-year anniversary of the granting of the EB4 applicant’s conditional Green Card. If this petition is approved by CIS then the EB- applicant will be issued a new Green Card without any further conditions attached to it, and will be allowed to permanently live and work in the United States.”
Can my business qualify for funding from an EB-5 Investor?
If your business is a new commercial enterprise, or a troubled business that has been hit hard by the economy then most likely your company can qualify as an EB-5 project.
Your business must have the ability to “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.” – USCIS.gov
The 10 US workers cannot include the immigrant investor, or the spouse, or the children of the investor.
To read more of the qualifications in detail, see www.USCIS.gov