By Jason Cruz
Northwest Asian Weekly
While some seek investment opportunities for themselves, others do it for their children.<!–more–> But no matter the reason, wealthy foreign investors have a pathway to a green card that’s much quicker than the traditional process.
Entrepreneurs, businesspeople, and investors outside of America can seek a visa that would permit them a chance for a green card if they fund or establish a business in America. But while the opportunity for permanent residency is appealing, the risks of investment and the possibility of being denied remain.
E-2 visas are authorized by a treaty between the United States and the treaty country, according to Charina Garcia, a San Francisco immigration attorney with the Cornerstone Law Group. Treaty countries include Japan, South Korea, and Taiwan, among others. Notably, however, two of the largest countries outside of the United States, China and India, are not treaty countries.
“The advantages of this visa are that it allows entrepreneurs and small business owners to invest in the U.S. and start a business,” Garcia said. “The goal is to generate work for U.S. workers.”
“The hurdles are that the investment must be substantial and the [U.S.] Department of State does not define what is substantial,” Garcia continued. “Therefore, we advise our clients that it must be substantial in relation to the start-up costs for the business. We have seen E-2’s approved for individuals that have invested $100,000.” However, Garcia added, “The investor cannot simply put the $100,000 in the bank.”
The investment in the U.S. business must be an “active” investment.
“Many times, the investors start the business before they have even secured the visa,” Garcia said.
Other risks include having the U.S. consular officer determine that the investment is “not substantial enough” or “won’t generate jobs for U.S. workers and will deny the visa,” explained Garcia.
Despite the potential of being denied, Garcia indicated that her practice has seen an uptick in those looking for an E-2 visa.
“There are more start-ups that are coming to us to see if they qualify for the investor visa.”
Garcia, whose firm is located in the San Francisco Bay Area, indicated that the industries where applicants are looking to invest include technology, restaurants, and mobile applications.
Under this particular visa, the applicant must come to the United States to develop and direct the enterprise. The person cannot merely provide the funds for investment and remain an observer to the investment.
The cost for an E-2 visa is $270, plus attorney fees if the applicant decides to use an immigration attorney.
The spouse and unmarried children under 21 years of age may receive a visa to accompany the applicant to the United States.
Originally enacted in 1992 as a pilot program and regularly reauthorized since its start, the EB-5 visa has gained interest from many foreign investors. The EB-5 visa offers options for those willing to invest a significant sum of money in the commerce of the United States. It is sometimes referred to as “the million dollar visa” due to the belief that it takes a million dollars of investment to receive this type of visa.
The state of Washington has benefited from EB-5 investors. In 2011, $48 million of investment from this particular visa helped the state to finance replacing the Highway 520 floating bridge.
The EB-5 is capped at 10,000 visas per year and is regulated by the U.S. Citizenship and Immigration Services. Similar to the E-2 visa, the principal investor, their spouse, and unmarried children under 21 years of age would be allowed green cards. The applicant is granted a temporary green card for two years and then must apply to have the temporary status removed. There would be a review of the applicant’s investment and a determination of their visa status at that time.
One of the largest differences between the E-2 and the EB-5 is that citizens from non-treaty countries may apply for the EB-5. Thus, investors from China are able to take advantage of this visa program. According to Elizabeth Peng, an immigration attorney with Peng and Weber in Mercer Island, nearly 70 percent of the EB-5 applicants are Chinese investors.
In addition to investors from China, she notes applicants from Russia, Korea, and Vietnam are also taking advantage of this visa.
According to Peng’s law firm, many Europeans apply due to the lower tax rates. On the other hand, Chinese investors seek the opportunity to educate their children in America.
There are two distinct ways to an EB-5 visa. The first is the active participation approach. Under an EB-5, the applicant must invest $1 million in a new commercial enterprise or at least $500,000 in a targeted employment area. Targeted employment areas include businesses in rural areas of the United States or an area of the country with high unemployment. This approach requires that the applicant personally direct the business. There must be a showing that the business is sustainable and would create jobs for U.S. citizens.
The second way to apply for an EB-5 visa is through a passive approach, which would allow the investment of the applicant’s money into a pre-approved business. Under this situation, the applicant would direct the investment into a U.S. Regional Center that would pool the investment into a business most likely not chosen by the applicant. Private companies ensure that the money provided for investment by the applicants are “clean” and are not a result of illegal drugs or other forms of organized crime. Peng pointed out that while this approach may appeal to those that need to manage other businesses, it can be a risk. Peng indicated that the applicant investing the money would have no control over the funds and may not understand or be comfortable with U.S. business practices. “There are a lot of worries,” Peng notes. Despite the investment, the applicant may lose their money in the business.
Moreover, they may be denied a green card after review of their temporary green card permit.
The fee to apply with the EB-5 visa is also much more expensive than the E-2, as applicants must pay an initial $1,500 fee to the USCIS for a temporary green card for the first two years that they are in the United States and then another $3,750 in order to remove the conditions of the temporary green card permit.
The EB-5 visa is considered a win–win situation for the investors and the U.S. economy. It provides the investors and their family with the opportunity to gain permanent residency in the United States, while boosting the U.S. economy by ensuring that at least 10 American citizens are employed by the investment and that the businesses are sustainable. (end)
Jason Cruz can be contacted at firstname.lastname@example.org.