When I travel the world I often ask people if they know about the US EB-5 visa, or employment-based fifth preference category. Interestingly, most people don’t know that it provides a method for eligible Immigrant Investors to become lawful permanent residents — informally known as “green card” holders — by investing at least $1,000,000 to finance a business in the United States that will employ at least 10 American workers.
Most immigrant investors who use the EB-5 program invest in a targeted employment area (TEA), a rural area or area with high unemployment — which lowers the investment threshold to $500,000.
Since the creation of the EB-5 Program, Chinese citizens were the leading investors that utilized the EB-5 program taking about 80 percent of the approximately 10,000 visa numbers allocated to EB-5 investors per year. Following China, investors from India, Vietnam and Singapore have been investing in the program in significant numbers. However, with the recent growth of individuals with high net worth from Africa, the region is playing a more active role in the EB-5 Investor Program. Over the past three years, the number of EB-5 petitions filed by African investors increased rapidly, with Nigeria leading the way, followed by South Africa and Egypt.
Indeed, there is no other program in the world like the EB-5 program in the U.S. Many countries offer investment immigration programs that compete with the EB 5 visa program, such as Canada, Australia, Britain and New Zealand. However, the required investment amounts for these four programs are significantly higher than the EB-5 visa, ranging from approximately $750,000 to over $4.5 million. All these exceed the $500,000 minimum for the EB-5 USA program.
There are two forms of investment under the EB 5 visa program: the individual investment program and the Regional Center investment option. The individual investment program supports a stand-alone investment in a single entity, while the Regional Center program creates larger projects for funding by multiple investors. EB-5 Regional Centers offer projects in TEA areas and manages the project on behalf of the investor, which is why many investors prefer to invest with a Regional Center project however, some investors prefer the individual investment option, which allows for more control and management in a business and may provide higher investment returns. At the end of the day, due diligence and working with a highly qualified attorney is essential in selecting a Regional Center or individual project.
The EB-5 visa, once known as the “golden visa” has many advantages. In contrast to other types of business visas, the EB-5 visa provides an opportunity to live and reside in America permanently, and to become a U.S. citizen after five years. There is no work or employment requirement, and it gives long-term certainty to reside in the US. Particularly for an African investor, obtaining U.S. permanent residency and eventually, U.S. citizenship within five years, will allow for greater ease of travel anywhere in the world!
The EB-5 visa also allows derivative benefits to the family of the investor. An investor’s dependent family can be included in the EB-5 immigrant petition, and therefore they also enjoy the same status as the investor. Dependent family members include an investor’s spouse and all unmarried children under the age of 21. The EB-5 visa gives an investor and his/her family, greater flexibility to live, work, or study in the U.S. than most other U.S. visa options. In addition, an investor can take advantage of lower university fees for their children and can buy property anywhere in the U.S.
There is no doubt that the U.S. is the most desired destination in the world. The economy and the rule of law is stable; and America has the largest consumer market in the world, and it’s therefore an ideal location for a successful business endeavor.
Finally, it is very timely for African investors to consider investing in the U.S. According to the research of Brookings Institution, the U.S. is mutually interested in expanding trade in agricultural goods. Current agriculture exports to the U.S. are less than 3 percent of total exports under AGOA (African Growth and Opportunity Act). Expanding opportunities for sub-Saharan African agriculture exports to the U.S. will produce benefits to the U.S. and Africa economically. Growth in trade in manufactured goods and services is another important sector. Making progress here will diversify U.S. trade with sub-Saharan Africa, which is currently dominated by oil and gas exports.
African investors should look into U.S. investment opportunities, which would in turn create opportunities to direct business back to Africa.
The EB-5 visa and U.S. citizenship provides many unique benefits to an African investor. That said, the EB-5 Program is set to expire on Dec. 7, 2018, but will likely be renewed on a short-term basis. However, there are impending regulatory changes to the EB5 Program, which include a significant increase to the minimum investment amount of $500,00 and other stricter requirements. The clock is ticking on the EB-5 visa.
Simone Williams, Esq. is Founder & Managing Attorney at Williams Global Law, PLLC.