Today’s EB-5 Program—Why the Original Program Can’t Compare

Today’s EB-5 Program—often called the “Pilot” or “Regional Center” Program—has come a long way since it was first created. The Original EB-5 Program, I’m sorry to say, was a virtual nightmare for potential investors. Applying for a Green Card was a risky, uncertain, oppressive process. Fortunately, the contemporary program is what the original should have been all along: a real incentive to invest in the U.S. economy and a clear path to U.S. permanent residency.

In this article, we’re going to compare the Original Program with its modern counterpart. I think that understanding the   will help illustrate what a fantastic opportunity the EB-5 program now is.

Under the Original Program…

… it was not enough to simply invest the necessary sum of money in a business venture. To qualify, the applicant was obliged to show that the investment created an entirely new business. The “new commercial enterprise” requirement—as it was called—dramatically increased the financial risk for investors.

But now, under the Pilot Program…

… this condition no longer exists under the pilot program. It’s enough to simply invest in an existing enterprise, as long as it was created after November 29, 1990. This, of course, is how it should have been from the start. The pilot program therefore eliminates the excessive risk involved in starting a business from the ground up.

Under the Original Program…

… the new enterprise must directly create new jobs for 10 full-time workers, who could not include the investor or members of the investor’s family. This, as you might imagine, represented a difficult feat for a single person’s investment.

But now, under the Pilot Program…

… the investment itself need not directly create any jobs at all. The pilot program only requires that the investment indirectly create 10 jobs. So how is this determined? The answer: industry job-multiplier statistics. If these statistics show—as often they do—that an investment of $500,000 will contribute to the regional economy in a way that will likely create or save at least 10 jobs, then this requirement will be satisfied.

Under the Original Program…

… the investor was obliged to play an active role in the day-to-day management of the business. Investing one million dollars, establishing a new business, creating at least 10 jobs—these were still not enough to qualify for a visa under the original program. Applying for an EB-5 visa meant having to be a business manager as well. This condition—the “active management” requirement—also meant that investors had no choice but to live where the business was located.

But now, under the Pilot Program…

… simply making a qualifying investment is enough to satisfy this requirement. While the pilot program does technically require the investor to participate in management or policymaking, this participation is often largely symbolic. And this means that investors and their families can live anywhere they wish, regardless of where they decide to invest.

Under the Original Program…

…the investor had to shoulder the burden of providing the U.S. government with sufficient proof that the necessary requirements had been met. And this was no easy task. Satisfying these conditions and proving that they had been satisfied were two entirely different things. The amount of documentation required was astounding, and with no assurance of success.

But now, under the Pilot Program…

… it’s no longer the immigrant’s job to prove that the investment meets the requirements. Applying under Pilot Program means investing in a Designated Regional Center—an economic entity, often a development company, that the U.S. government has given permission to attract EB-5 investors. Once a business developer becomes a regional center, USCIS has already determined that the commercial enterprise meets all the major requirements. This means that the business enterprise that you invest in has already been approved! While applying for an EB-5 visa still requires substantial documentation from the investor—and although there are never any guarantees—this fact about the pilot program dramatically reduces the amount of work, not to mention the risk, involved in obtaining a Green Card.

Quite a difference, isn’t it? Thanks to the many reforms that were made, the EB-5 Investor Visa Program is now the most secure flexible path to a U.S. Permanent Resident Green Card.