A look at U.S. EB-5 Golden Visa options

Families in the UAE and surrounding Gulf countries are increasingly considering an investment in the future stability and security of their children by obtaining the United States golden visa. There are two distinct routes of investment through which families can apply for the U.S. golden visa – regional center or direct investment. This article explores the two investment options and outlines key considerations for families looking to participate in the EB-5 Immigrant Investor Program.

What is the U.S. Golden Visa?

The EB-5 program allows foreign investors to obtain U.S. Green Cards for themselves and their qualifying dependents (spouse and children under 21 years of age) with an investment of $800,000 in a new commercial enterprise in the United States. The program was created by the U.S. Congress in 1990 with the intent of boosting the U.S. economy through the injection of foreign capital and creation of jobs for U.S. persons. EB-5 applicants are required to demonstrate that the source of their funds is lawful and must create a minimum of 10 full-time jobs for U.S. persons with their investment.

With the success of the program and its vast benefits for the U.S. economy, Congress introduced the EB-5 Immigrant Investor Regional Center Program in 1992. A regional center is a private or public economic unit designated by the United States Citizenship and Immigration Services (USCIS) with the goal of promoting economic growth in the United States.

With the U.S. golden visa (Green Card), families can live, work, and freely travel in the United States. Additionally, the U.S. Green Card provides a pathway to U.S. citizenship.

Regional Center investment

In a regional center (RC) investment, a family chooses a government pre-approved real estate project hosted by a regional center for their EB-5 investment. The RC pools investors’ funds to finance the construction of a project in the United States. The process can be simple and hassle free with the help of experienced EB-5 specialists, such as The American Legal Center in Dubai. With guidance from an EB-5 consultant, the EB-5 applicant is presented with a number of projects for their investment. Once a project is chosen, the $800,000 capital contribution and associated fees will be remitted directly to the escrow account of the RC sponsoring the chosen project.

Direct investment

In a direct investment, an EB-5 applicant must directly invest the required capital contribution in a new commercial enterprise. EB-5 applicants are not allowed to pool their investments in a direct investment. A direct investment requires more of an active role from the EB-5 applicant as they have to manage and oversee the business in the United States.

Which is the better option?

The RC program allows investors to benefit from a passive investment. An RC investment can be more beneficial for applicants given that they are not required to be actively involved in the management of the project. Applicants may rest assured that all project-related requirements, including but not limited to job creation reports, business plans, and various economic reports related to the project, will be submitted to USCIS by the RC.

The job creation requirements of the EB-5 program are more easily met through an RC investment. In a direct investment, an investor must directly create ten full-time positions. In a regional center investment, the new commercial enterprise can directly or indirectly create the required jobs, out of which up to 90% may be indirect jobs.

“EB-5 applicants are often better off investing through a regional center,” says Shai Zamanian, Legal Director of The American Legal Center, explaining that “direct investment carries more immigration risk for applicants.” EB-5 applications affiliated with an RC investment are consistent in approval ratings. As long as an applicant can show the lawfulness of their funds, their EB-5 application through an RC investment has a high probability of success.

A look at the U.S. government statistics

Based on statistics released by USCIS, during the time in which this U.S. government immigration agency was solely reviewing direct investment applications, there was a higher rate of denials, indicating the riskier nature of the direct investment route.

In the first three quarters of Fiscal Year 2022, USCIS reviewed a total of 668 EB-5 applications. In Q1 of FY2022 (October 2021 to December 2021), USCIS approved 16 of the 61 EB-5 applications reviewed (26% approval rate). In Q2 of FY2022 (January to March 2022), USCIS approved 50 of the 152 EB-5 applications reviewed (33% approval rate). In Q3 of FY2022 (April to June 2022), USCIS approved 264 of the 455 EB-5 applications reviewed (58% approval rate). Although these numbers paint a scary picture, the RC program has traditionally and consistently had a high approval rate, somewhere between 85-92% of applications have traditionally been approved through the RC investment route.

The RC program was suspended from July 2021 to March 2022 due to a lack of reauthorization by Congress. During this time, USCIS was neither accepting new applications associated with an RC investment nor reviewing any previously filed RC investment applications. Therefore, all applications reviewed in Q1 and Q2 of FY2022 were associated with a direct investment. Applications for RC investments resumed after passage of the EB-5 Reform and Integrity Act (RIA) in March 2022. It can therefore be inferred that of the 455 applications reviewed in Q3 FY2022, a portion were associated with RC investments.

The approval rate of Q3 FY2022 during which time RC investment applications were also being reviewed is more than double that of Q1 FY2022 during which time only direct investment applications were being adjudicated. “The data suggests a much lower approval rate for direct investments,” says Shai. Although the approval rate spiked in Q3 FY2022 after USCIS began reviewing RC investment applications, it is still lower than the long-term average approval rate of 75%. Therefore, it can be expected that the approval rate will once again increase to be in line with the long-term average level now that USCIS is adjudicating RC investment applications.

“While the program mandates that an investment must be at-risk, investors can still take steps to reduce their risk, such as by choosing the regional center investment route rather than the direct investment route.” During the time in which the RC program was suspended, many firms across the region were encouraging applicants to invest in pooled direct investment projects, but The American Legal Center continued to advise their clients against this investment option, citing the increased immigration risks. “We consistently advised our clients to remain patient while the RC program was being reauthorized,” says Shai.

Regional Center investment is the way to go

With RIA’s provision of increased government oversight over RC operations and heightened security of the RC program for foreign investors, families carry less immigration risk through the RC investment route. The RIA now requires regional centers to be audited by the Secretary of Homeland Security at least once every five years. If a regional center fails to satisfy the requirements of the audit, the regional center will lose its designation.

With over 600 regional centers in the United States, it is important to find the right regional center for your investment. “Regional center investments are considerably better compared to direct investments. Nevertheless, families should pay attention to which regional center they choose for their investment,” says Shai, explaining that certain regional centers have “sanctions from the Securities and Exchange Commission (SEC) placed on them or are subjects of investigations not readily identifiable online.”

How The American Legal Center can help you

Choosing a suitable regional center for your investment is a crucial part of the EB-5 immigration process. The team of U.S. licensed lawyers and professionals at The American Legal Center can help you in finding a regional center with a stellar track record and vast experience in the EB-5 industry. “Families should ask the right questions when it comes to investing in a regional center and we will guide them in the right direction,” says Shai.

With over ten years of experience in the EB-5 industry, The American Legal Center has developed strong relationships with top regional centers operating in the United States. If you are interested in finding out more about the U.S. golden visa, contact The American Legal Center in Dubai for a free initial consultation.