Changes to the EB-5 Visa that May Affect You
If you are a Canadian citizen looking to move to the US, you’ve probably heard about the EB-5 Visa classification. Over the years it has gained popularity for wealthy investors who seek a fast track to gaining American residency and eventual citizenship. Major changes went into effect in November 2019 for the EB-5 investment program which are important to be aware of if you are considering this path to US immigration.
What is the EB-5 Visa Investment Program?
Created in 1990 by Congress, it was designed to create jobs and stimulate the economy. Essentially, the program requires a foreign investor to invest capital in a US commercial enterprise to create a minimum of 10 full-time jobs. Minimum investment amounts are either $1,000,000 USD or $500,000 USD if an investment is made in a rural area or an area with high unemployment rates (Targeted Employment Area, or TEA). A capital investment can be cash, equipment, or inventory, among others. All capital must be valued at its fair market value in US currency and in certain cases can include a promissory note.
There are several types of businesses that qualify for the EB-5 program, such as a sole proprietorship, partnership, corporation, or business trust, to name a few. The foreign investor must acquire a new enterprise that was established after November 29, 1990, or, under special circumstances, before that.
Although the main requirement is to inject capital in a new commercial enterprise that will create at least 10 full-time jobs, a foreign investor may choose to invest in a troubled business. If the EB-5 investor chooses to invest in a troubled business, they do not have to create 10 new full-time positions; rather, the business will need to maintain the same number of employees that exist upon investment for at least two years.
What has Changed?
As of November 21, 2019, the capital requirements have increased by as much as 80%! Previously, investors could opt to invest $1,000,000 USD or $500,000 USD in a TEA. However, as of November 21, the minimum investment is $1,800,000 USD or $900,000 USD in a TEA.
If the EB-5 Visa is an immigration path that you’re considering, understanding the new capital requirements is very important. Of course, many additional factors will affect your decision to choose this route versus others. At MCA Cross Border Advisors, we help you understand all the financial considerations involved in making a change of residency and guide you towards the path that’s right for you.