Lawful permanent residents, more popularly known as green card holders (“Green Card Holders”, are immigrants under the Immigration and Nationality Act (the “INA”), with rights, benefits, and privileges to reside in the United States permanently. A green card allows a non-US citizen to gain permanent residence in the United States and eventually gain United States citizenship.
Green cards may be granted to spouses, family members, refugees, exceptional talents, or investors. The EB-5 Visa program was intended to create jobs for United States workers and to infuse new capital into the United States economy by granting entrepreneurs an incentive to start business in the United States. In 1993, Congress decided to create similar path for investors and introduced the Immigrant Investor Pilot Program (the “IIPP”). The original method of applying for the EB-5 Visa shall be referred to herein as the “Entrepreneur Visa” while the method mandated by the IIPP shall be referred to as the “Investor Visa”. The differences, advantages, and disadvantages of both methods are described in greater detail below.
The Entrepreneur Visa
Traditionally the EB-5 Visa required a stand alone and direct investment in the US economy (the “Entrepreneur’s Visa”). The Entrepreneur’s Visa has three (3) requirements:
1. Make an investment in a new commercial enterprise; this can be a pooled investment;
2. Make the required minimum investment determined by project location; and
3. Lead to the creation of employment for at least ten (10) full-time US workers.
The Entrepreneur’s Visa requires the investor to make an investment into a new or existing business venture in the US and to do so individually or in partnership with other investors. An important note to make is that in the Entrepreneur’s Visa the only jobs that are counted towards the ten (10) jobs required are direct jobs only. Direct jobs are jobs which establish an employer-employee relationship between the commercial enterprise and the persons that they employ. The Entrepreneur’s Visa does not include indirect jobs or induced jobs, both terms which will be covered below.
The Investor Visa
The Investor Visa is meant for investors who do not wish to be directly involved in the day-to-day running of a business but instead are interested in a more passive investment. The Investor’s Visa has three (3) requirements:
1. Make an investment into an economic unit involved with the promotion of economic growth (also known as “Regional Centers”);
2. Make the required minimum investment determined by project location; and
3. Lead to the creation of employment for at least ten (10) full-time US workers.
Unlike the Entrepreneur’s Visa, the Investor’s Visa will count indirect jobs and induced jobs towards the ten (10) full-time jobs minimum. Indirect jobs are defined as jobs held outside of the commercial enterprise (no direct employer-employee relationship) but that are created as a result of the commercial enterprise. Induced jobs are jobs created due to the presence of direct jobs and the indirect jobs.
Those pursuing an Investor’s Visa invest into Regional Center investment projects which may include, software companies, large and medium sized hospitality projects, mixed-use real estate projects, senior assisted living homes, ski resorts, charter schools etc. All of which requires the investor to be part of policy making i.e. a member of the board, but does not require for an investor to be involved in daily management.
