US EB-5 Investor Program – Direct Investment vs. Syndicate/EB-5 fund

Immigration to USA has been on a rise through the very popular EB-5 Immigrant Investor Program which has a quota of granting 10,000 visas every year. First created in 1990, this program became more famous after the 2008 recession which was the period when traditional lending became tough and this program was considered as a more accessible form of financing as banks were reluctant to lend. The EB-5 Investor Visa Program allows foreign investors to attain a green card and citizenship, eventually, by investing a substantial sum of money either through the direct investment option or through a syndicate/EB-5 fund. While both these options lead to permanent residency, the EB-5 investor should be aware about the basic differences in both of these options.

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	Direct Investment Option	Syndicate/EB-5 fund Option
Investment Amount	US $1 million	US $500,000
Job Creation Requirement	Investors have direct responsibility of creating 10 jobs	The syndicate/fund has direct responsibility of creating 10 jobs
Management of the business	Investors have to look after the day-to-day management of the business.	Syndicate fund has direct control over the day-to-day management of the business.

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Direct Investment Option

Lets talk about the direct investment option first. It requires investors to invest a sum of US $1 million in a targeted employment area, a new venture or in a troubled enterprise. This option is best suited for all those investors who want to be directly involved in the day-to-day management of their businesses. Since they will be directly responsible for running their business, they have to make sure that it runs successfully to be granted citizenship by having adequate knowledge about business practices. The visa upon arrival will be conditional on the grounds that the investors will be required to generate 10 full time employments within 2 years. If the United States Citizenship and Immigration Services (USCIS) are satisfied at the time of verification of this requirement, the investors will be granted permanent residency, which means that they need to come up with some solid business plans that can live up to this job creation requirement.

Syndicated/EB-5 fund Option

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Under this investment option, the EB-5 investor will be required to invest US $500,000 with a syndicate/EB-5 fund in an approved regional center. This option is also known as the regional center investment option.  A Regional Center is a business entity that coordinates foreign EB-5 investment within an area in compliance with EB-5 statutory, regulatory, and precedent decision framework.  Even though this option will also lead to a conditional green card, the difference lies in the fact that investors opting for this option will attain the legal status of a limited partner and they won’t be directly responsible for managing the day-to-day operations of the business. Moreover, the investors will not have to bear the direct responsibility of creating 10 jobs as the syndicate/EB-5 fund will take care of that as well. A regional center investment is best suited for all those investors who would give preference to participating in the policy-making activities of the business, rather than having direct control over the day-to-day operations of the business.

Having explained both the investment options separately, it is important to highlight the fact that selecting either of them will lead to a green card for the investors and their families if they apply for Immigration To USA. As a green card holder, the investors will be considered lawful permanent residents of the United States, and they will be able to obtain citizenship after physically residing in United States for a period of 2.5 years out of a total 5 year period, without being absent from the country for 6 months or more at a time.

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For more information about the US EB-5 Program, please feel free to visit our website Lalani & Associates.