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Jun 30, 2023

Comparing EB

Two options are available to investor immigrants to the USA to consider. The choice depends on the ... [+] situation of the investors. When considering options for U.S. immigration as an investor, two

Two options are available to investor immigrants to the USA to consider. The choice depends on the ... [+] situation of the investors.

When considering options for U.S. immigration as an investor, two prominent programs stand out: the EB-1C inter-corporate transfer visa and the EB-5 regional center investor visa. Each program offers different advantages and considerations, making it crucial to understand their nuances before making a decision.

The EB-1C program offers a direct path to permanent residence for investors who are transferred to ... [+] the USA from abroad under certain conditions.

The EB-1C program provides a direct pathway to a permanent green card for both the investor and their family. The essence is that a manager or executive abroad uses this inter-corporate transfer vehicle to get U.S. permanent residence. Think for example, a manager for Toyota in Japan is transferred to a Toyota factory in New York. This is a classic inter-corporate transfer. With a relatively fast processing time of less than two years for the direct green card application, it is known for its efficiency. Unlike the EB-5 program, there is no strict minimum investment requirement for EB-1C. The investment amount depends on the specific business venture, allowing for flexibility, and even franchises to be considered.

Direct control of one's fate is one consideration in an investment immigration program.

One of the key benefits of EB-1C is that investors have control over their funds in their own businesses. Sometimes an investor might use a start-up in the U.S. to transfer himself to the U.S. from his own parent company abroad to take advantage of this visa. In that case, one year must pass before the manager will become eligible to apply for a green card. The level of control in running your own company provides a sense of security and allows investors to actively participate in business operations. Due diligence in terms of verifying the source and path of funds is required, but the paperwork is generally less burdensome compared to the EB5 program. Compliance with the rules is still important but the EB-1C visa offers more flexibility for investors.

Cost of doing an EB-1C application is comparatively low.

Cost-wise, the EB-1C program is relatively affordable, with legal fees typically less than $10,000. Additionally, the program offers a clear and long-term path to citizenship, providing a sense of certainty for those seeking permanent residency in the United States. To qualify for EB-1C, investors are expected to have at least some level of involvement in the business they are transferred to in the USA and they must demonstrate basic English language skills since, after all, they will be managing an American business. A prerequisite of at least one year of management experience in an associated foreign business within the past three years is also required, assuming we are talking about investor managers or executives coming to the USA, as opposed to skilled workers.

In contrast, the EB-5 regional center program operates under a conditional green card structure, which converts to permanent residency after two years. However, the processing time for EB-5 immigrant visas is significantly longer, especially for applicants from countries such as China and India, where backlogs can extend the wait time to 10+ years, except for certain specific set-aside regional center applications at the present time.

The investment requirement for EB-5 is set at $800,000 for regional center projects. In this discussion, we are not talking about the $1,050,000 investment requirement for the direct investment EB5 option which few investors take anyway. Unlike the EB-1C program, investors in the EB-5 program do not have direct control over their funds if they choose to invest through a regional center. This lack of control exposes investors to a certain degree of risk, as their funds are funneled into third-party projects.

Due diligence plays a crucial role in the EB-5 program, necessitating comprehensive scrutiny of the source and path of funds. This requirement results in a more extensive paperwork process. Stricter enforcement of rules is also observed in the EB5 case, making adherence to regulations essential. It's important to note that the higher legal costs associated with EB-5, ranging from say $60,000 to $70,000 in some cases, reflect the increased complexity and due diligence requirements of the program.

Investors in EB5 projects do not have to play an active part and can keep relative distance from the ... [+] management.

Similar to EB-1C, the EB-5 program offers a long-term path to citizenship, ensuring stability for investors and their families. However, the level of investor involvement differs significantly. EB-5 investors in regional center projects are not required to actively participate in the business.

Investors who do not speak English can qualify for the EB5 program.

Additionally, there is no specific English language requirement, making it more accessible in terms of language proficiency. Unlike EB-1C, no prior management experience is necessary to qualify for EB-5. These are two reasons why the EB-5 model may be the right choice in particular from some investors.

Regarding the timing of the return on investment, EB-1C investors will eventually have the opportunity to retrieve their invested funds if they choose to do so based on business requirements. No specific time frame is required. On the other hand, EB-5 investors typically expect to see a return on their invested funds after approximately five years.

It's important to bear in mind that immigration policies are subject to change, and the information provided here reflects the current state of these programs. Therefore, it is strongly recommended to consult with an immigration attorney or expert to obtain the most up-to-date and accurate information tailored to individual circumstances when moving forward with such investments. See the table below for a better picture of this comparative analysis.

Copyright A. Semotiuk 2023