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Entrepreneurs often see the EB-5 green card and its promise of permanent residence based on investment as the best path to a green card. However, when working with entrepreneurs we rarely recommend the EB-5 path to our entrepreneur clients.

The first problem is the size of the investment. The EB-5 green card currently requires a $500,000 or $1 million investment, depending on the location of the business. Many entrepreneurs are disappointed to learn that the investment must be from their personal funds, rather than a reflection of the overall investment made into the business. Therefore investment from angel investors and venture capital funds will not count toward the investment amount.

Similarly, reinvesting profits does not qualify for the purposes of an EB-5. In order to qualify the funds for EB-5 purposes, an investor would need to take the profits from the business, pay taxes on those profits, and then re-invest those funds back into the business. For obvious reasons, this may not be desirable, especially in a C-Corporation.

That said, for entrepreneurs who are already committed to investing the requisite capital, the EB-5 certainly should be on the table as a green card option. However, it may not be the best option. The current timelines for the EB-5 process can be intimidating. Here is an overview:

I-526 stage: two year USCIS processing time

  • Demonstrate investment of capital
  • Demonstrate how the business will create 10 new jobs

I-485 stage: 6-12 month USCIS processing time

  • Demonstrate that you qualify for a green card
    • Disqualifying factors may include:
      • Criminal record
      • Terrorist or communist activity
      • History of unlawful work or presence in the US

After two years with a conditional green card, the investor must file an I-829 to remove the conditions: two year plus USCIS processing time

  • Demonstrate that the investment has been maintained
  • Demonstrate that the business has created at least 10 new jobs

With this timeline, the EB-5 process will take at least seven years. First, this is just a long period of time. Second, this leaves the entrepreneur’s capital tied up in a company he/she may no longer wish to pursue but must just to maintain the green card process.

Even with the EB-5 process ongoing, an entrepreneur may consider other green card options, including the EB-1A for individuals of extraordinary ability and the National Interest Waiver. In certain circumstances where the entrepreneur also has a foreign business the EB-1C for multinational managers and executives may be an option.

The benefit of these other green card options is speed. These green card processes may take between 6 and 24 months to complete. That is significantly faster than the overall EB-5 process. With a faster process the entrepreneur is free to make strategic decisions, such as reducing staff, moving the capital from the business, or even selling the business. These options give the entrepreneur freedom to maneuver as he/she sees fit.

When establishing your business in the US consider each green card option. The EB-5 may be worth pursuing due its clarity, but as the business develops each of these other options should be considered as well.

To learn more about the green card process and how we can be of assistance, please schedule a call.

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