Investing for Green Cards

Mulcahy Capital has been working with many foreign investors coming into the US over the years, and some of these have availed of investment visas. The US Government's Green Card program for foreign investors into the US, known as the EB-5 program, is now twenty years old. The basics of the program grant a foreign investor a permanent residency visa, or Green Card, if they invest at least $1 million into the US and create 10 full time jobs.

There is an exception to this basic rule whereby the investment required is reduced to just $500,000 if the investment is made into an economically depressed area. What criteria are used to assess an area as economically depressed is questionable given that Boston falls within that definition under the EB-5 program, however in most surveys Boston is highly ranked as one of the best performing cities in the US.

On the face of it real estate investment may not appear to lend itself very well to the EB-5 program job creation requirements, where a more labor intensive business such as manufacturing would easily meet the job requirements. Nonetheless real estate investment has been the greatest beneficiary of the EB-5 program over the past twenty years. Investments into real estate holding companies, hotels, assisted living facilities, or mixed-use properties, with retail and/or bar/restaurants, can easily achieve the job creation requirement hurdle of 10 employees. Other real estate such as apartments or office buildings would have a harder time achieving these job numbers.

The EB-5 program, which stands for "Employment Based Immigration, Fifth Preference" was set up in 1992. Over the past twenty years the EB-5 program has generated over $2 billion in investment capital and created over 50,000 new jobs. The foreign investor is granted a permanent residency visa for them and their family on a conditional basis. Once the funds have been invested and 10 new jobs have been created within two years, then the conditional status on the visa is removed.

Some flexible terms of the EB-5 program includes allowing for the investment capital to be in the form debt or equity. Also, the jobs that are allowed to be counted include actual direct jobs (employed in the business being invested in), indirect jobs (created in vendors/suppliers to the business), and induced jobs (created by other new businesses surrounding the investment).

Surprisingly few foreign investors have taken up the EB-5 program considering that up to 10,000 visas may be granted in any one year. However there has been increased interest in the past few years with over 4,000 visas being issued in 2011 & 2009. Interest has heated up from China which accounts for 70% of all new visas. Motivations for obtaining the investor visa can range from relocating to the US for new opportunities, diversifying your investments, having access to a world class health & education system for your family, or an ability to relocate away from one's own volatile home country.

Let me know if you have further interest in the EB-5 program. Mulcahy Capital work with excellent immigration attorneys and we are constantly seeing investment opportunities that could be a good fit.