09 / 19 / 2016

Using the EB-5 Visa to Help Fund Your Startup

eb_5_visa_united_states.jpgCreated by the Immigration Act of 1990, the EB-5 visa is a United States visa that provides a way for an immigrant to obtain a green card through a more non-traditional method. In order to qualify for an EB-5 visa, a foreign national must invest $1,000,000 in an American business. This amount should create a minimum of ten jobs for U.S. workers (excluding the investor). There is a general exception to the $1,000,000 amount if the foreign national invests $500,000 instead in a Targeted Employment Area. This is a region of the United States that is experiencing high unemployment or considered rural.

What happens after you're approved for an EB-5 visa?

Upon approval of a foreign national’s petition for an EB-5 visa, the individual investor and their immediate dependents are granted conditional permanent residence. The conditional permanent residence lasts 2 years. It is during this that the investor must prove the requisite amount ($1,000,000 or $500,000) has been invested in the appropriate existing or new business. Additionally, the investor must show that 10 jobs have in fact either been created, will reasonably be created in time, or have been maintained due to his investment in that specific existing or new business.

Here in Texas, EB-5 visas have served as a source of financing for some businesses, according to the actions of Karl Zavitkovsky, the Director of Economic Development for Dallas. Zavitkovsky has been working to make Dallas into an EB5 Regional Center. The intention is to make Dallas a place where the process of nationalizing immigrant investors are streamlined. This involves the city working with investors, or at least transforming the city into a more conducive environment for investment. The mutual trade-off for businesses and immigrants appear to be “low-cost capital” for the business, coming from the immigrant, and a green card for the immigrant, coming from the United States Government; all at an ostensibly easy-going, mostly pain-free pace. Additionally, because each $1,000,000 investment brings in 10 new employees for the company to be invested in, the city in which the company operates in benefits from job growth and taxes.

Have you considered an EB-5 visa as an avenue for funding?

Albeit unique in its nature (not everyone has a relative/friend who happens to have $1,000,000 lying around for investment and isn't a U.S. Citizen) this is most definitely one source of funding so long as all federal hurdles can be overcome. Plus, your new (or existing and growing) business would be gaining 10 new employees thanks to this program. Realistically, this source of funding is more likely appropriate for those that are growing so fast, the company needs the injection of employees and it just so happens the owner has an affluent friend intending to immigrate to the United States.

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