EB-5: see the rules for investors to have a green card – 09/23/2022 – Mercado

The EB-5, the US program that gives the right to a “green card” in exchange for investments in the country, resumed this year, after a reform. Among the changes, the minimum investment amount was reduced to US$ 800 thousand (R$ 4.2 million, in the quotation of Friday, 23rd) and there is the expectation of greater fraud control.

These visas allow the investor to live in the United States for an indefinite period, in exchange for an application of resources that generates at least ten direct jobs there.

The value of the minimum investment required was lower: it dropped to US$ 800 thousand in areas with high unemployment, and US$ 1.05 million (R$ 5.5 million) in other areas. The previous rule, from 2019, required at least $900,000.

In most cases, the investment is made through the regional center model: several foreigners contribute resources to a project designed and run by third parties, without having to get involved in the day-to-day business.

“Most of the projects via the regional center are for construction, especially hotels. These are activities that generate jobs and need resources”, explains Ana Elisa Bezerra, vice president of LCR Capital Partners, a company that helps obtain investor visas.

You don’t need to be an experienced investor, just have money. There are also no age restrictions, which makes room for retirees, young couples and students to apply. “We have cases in which parents make a donation to their child, so that he can invest and start the process”, explains Bezerra.

The process is carried out in two parts: in the first, the US government assesses the applicant’s profile and the investment project. If approved, the person receives a temporary green card, valid for two years, which allows them to work, study and live in the country. The benefit can be extended to the spouse and children under the age of 21.

After two years, a new assessment is carried out. If it is confirmed that the project has generated the jobs, applicants receive a standard green card, valid for ten years, and can withdraw from the project they invested in, if they wish.

In addition to the investment amount, you have to pay about US$7,500 (R$39,400) in fees to the government. Immigration lawyers charge around $30,000 to assist with the process, and regional centers charge administration fees.

Despite the high investment, the wait time to obtain an EB-5 can be long. According to the USCIS, the American body that analyzes applications, the current average time for completion of processes is four years and four months.

The new rules provide for visa quotas for investments in rural and infrastructure areas, which may include clean energy. However, it’s unclear whether new orders that fall under this will get faster approval.

The USCIS says that, as a rule, applications are reviewed on a first-come, first-served basis. “Each case is unique, and some may take longer than others,” says the agency.

“In good times, it took a year. Now, it’s taking three to five years,” says Felipe Alexandre, a lawyer at AG Immigration, about the wait time for the EB-5.

He considers his customers to be reticent. “People are still waiting a while to see what will happen with the first investors [com as novas regras]. Five years [de espera] is not acceptable”, evaluates the lawyer.

Engineer Celio Pereira, 61, took half a decade to complete the process. He applied in 2017 and got the visa in July this year. “I had part of the requirements approved in January 2020, but the pandemic came and delayed everything”, he comments. “I got into depression while I was waiting, but I went to therapy and now I’m motivated”

Pereira worked for two decades at Petrobras and had no experience as an international investor. He sought advice, which helped him choose a hotel project on the outskirts of Miami.

“I received reports on the progress of things, but I didn’t need to keep up. I also received dividends. The expectation is to recover the amount invested in a few years”, he says.

The engineer, who has always lived in Rio de Janeiro, plans to live in Orlando and work there as a magician at children’s parties, a profession he has been working in for a few years. Once the process is completed, the foreign citizen is free to seek employment there or open other businesses.

The pandemic has delayed visa processes in general, but the EB-5 category has had even more hurdles. The program was created in 1990 and has undergone several reformulations. In 2019, the minimum investment amount was increased from US$500,000 to US$900,000.

However, some candidates went to the US court questioning the change and won. The government had to reformulate the program, which ended up being suspended last year because Congress did not approve the new rules before the necessary date.

EB-5 resumed in March of this year after Congress included it in a budget bill. The program was extended until 2027, with modifications. Now, there will be more mechanisms to prevent fraud, such as a federal control over the definition of high unemployment areas, previously in the hands of states and cities.

The most curious case involving EB-5 investments was the Hudson Yards complex in Manhattan. The most expensive real estate project ever made in the US –US$25 billion–, received US$1.2 billion in investments from foreigners seeking visas.

The point is that part of these investments were made in the lowest category, US$ 500 thousand at the time, whose intention was to develop poor areas of the USA. Betting on cartographic creativity, the developers argued that the project aimed at the luxury market, in an upscale area, would help to develop poorer neighborhoods in New York, such as the Bronx and Harlem, several kilometers away.

The first Hudson Yards buildings were completed in 2019, but the pandemic has left the offices empty. Other projects financed via EB-5 also made losses. As a result, some foreign investors went to court to sue the administrators. To avoid situations like this, the federal government promises to assess more firmly the feasibility of projects to be financed via the EB-5.


Understand the EB-5 visa

Which is?

An immigration visa that allows you to live in the United States, aimed at people who want to invest in business in that country.

What are the requirements to get one?

It is necessary to make an investment of at least US$ 800 thousand (in areas of high unemployment) or at least US$ 1.05 million (in other areas of the country), in a new business that generates at least ten direct jobs over two years , to be occupied by persons authorized to work in the United States.

What kind of project can be done?

One can invest in various types of business such as shops, farms, small factories, etc. The most common model is for the investment to be made in a “regional center”, a model in which several investors form a partnership to enable a larger project to be managed by third parties.

It is not allowed to carry out a purchase and sale operation, such as obtaining a property in exchange for the investment made, for example.

What do you need to prove?

That the investor has high income or other assets, that the resources to be invested have a lawful origin and that the business plan is consistent.

How does the process work?

There are two steps. In the first one, it is necessary to make the investment and present the documents that prove that the requirements have been met. Upon passing the first stage, the person receives a temporary green card (residence permit), valid for two years.

After this period, there is a new assessment to verify if the investment actually generated jobs and was carried out properly. If everything is correct, the person receives a regular green card, which allows them to live in the US for ten years and can be renewed later.

How long do I need to stay connected to the business?

Until the second evaluation step is completed. After that, the investor can sell his business or transfer his share of society to third parties.

Do I need to live close to the investment location?

Not. You can invest in one city and live in any other part of the US.

Can I take the family?

The visa can be extended to the spouse and children who are under 21 years old on the date of entry of the process.

How much?

US government fees total about $7,500. Hiring a law firm to handle the application costs between $30,000 and $35,000. If the investment is made via the regional center, administration fees are also charged.

What is the pass rate?

Lawyers estimate that more than 90% of applications are approved, provided they are properly crafted. In fiscal 2021, 2,639 green cards were awarded via EB-5. Of these, only 31 were for Brazilians. China was the most benefited country, with 1,567 visas.

How long it takes?

The US government says the current average wait time is 4 years and 4 months. With the changes in the process, there is an expectation that the responses to new requests will come out more quickly.

How to order?

You have to fill in forms online and wait for the analysis. The request can be made from Brazil, other countries or on American soil.

Do I need to wait for the final result before moving?

You can travel to the US on a regular visa, such as a student or tourist visa and, while there, file the process and ask for an adjustment of status. Thus, the person can remain in the country, on a regular basis, while waiting for a response.




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