EB-5 visa: Risk or solution?

cbarbieriPublished in “The Boca Raton Tribune” – On 05/30/2018 By Carlo Barbieri

After taking part in the preparation of EB-5 visa projects for about 15 years, and having participated in the creation of more than 400 projects that involved working with fantastic business partners in the USA, I have learned a lot about the good and not-so-good elements of the program. This comes in handy right now, as lately I have seen the EB-5 visa program being perceived by many people in Brazil with a mix of fear and joy.

Until a decade ago, we had fewer than 15 Regional Centers, and the number of projects in the works was insufficient to use all the available EB-5 visas.

Today, we have more than 700 Regional Centers and more than 1,000 projects in progress.

Some people say there are wonderful proposals available to them while others say, well, no, the projects aren’t really that good.

How do you differentiate a good project from a risky one?

Well, first, let’s make sure we are all on the same page.

The Congress of the United States created the EB-5 program in 1990 to stimulate the U.S. economy by means of job creation and capital investment by foreign investors. In 1992, Congress created the Immigrant Investor Program, also known as the Regional Center Program.

Under this federal program, a foreigner who invests $500,000 — and in some instances, $1 million — in a project that will create at least 10 jobs can apply for a green card. It generally takes from 22 to 26 months to obtain legal residency through the program, as opposed to several years if applying through other visa programs.

Now, the viability of a project is surely something the investor must determine. And he or she has to communicate this to officials as he or she moves through the process of growth and expansion.

It is not the wonderful, colorful brochures or the promise of magical strategic outlets that should guide the decision to move ahead on a project. Offers of fat dividends to investors is probably even less certain to bring interested parties on board.

PROJECT SAFETY

One of the most important things is to verify the facts that underscore the safety of the project, such as:

  • Do project leaders have experience in the business field?
  • Does the company have a past history that provides security for the future?
  • Are the elements being affirmed and promised realistic?
  • What is the growth space for the activity segment of the enterprise?
  • What are the risks of this product or service?
  • What are the long-term prospects for the project?

With these data, if the answers are adequate and create a solid feeling of security, the investment should, at least in principle, be a good one.

DEADLINES

A number of fallacies exist in the market regarding the green card deadline. The applicant must determine for certain that the information he or she is working with is correct. And this can be done in any of several ways.

First of all, you must be certain of the potential investor’s country of origin.

If the person is Chinese, chances are he or she will have to wait a minimum of 12 ½ years to receive immigration authorization.

If the potential investor is Vietnamese, the wait time is about five years.

For Brazilians, at the present time, the wait is around 28 months.

But with each passing day, this deadline may increase, unless there is an increase in quotas or the hiring of more staff to help move the process toward fruition.

The risk is more serious for those who wait too long. They must act before Brazil reaches its limit, as happened with China and recently with Vietnam. India is also heading in this direction, meaning there will likely be a time when that nation’s waiting period for an immigration OK will be much longer.

If you are definitely heading to the US, the waiting time is not excessive. Those opting to take this route must plan adequately to move their family.  But before this, good tax planning is needed to prevent the dream from turning into a nightmare.

The EB-5 is undoubtedly the best and most sophisticated visa offered. And if the process is done well, investors will have chosen the safest and fastest method of obtaining a proper US residence.

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