June 14, 2021

EB-5 visa. A permanent residency by investing in the US

This article is part of Documented’s Glossary. We want to make it easier for all to understand the US immigration system. If you want to know more about different visa types and immigration terms, please check our library here.

What is the EB-5 visa and how investing in the US can get you one

The EB-5 is an employment-based visa available to non-American investors who wish to open a business in the United States. Congress created the program in 1990 with the purpose of stimulating the economy through job creation and capital investment created by foreign investors. As part of the program, entrepreneurs, including their spouses and children, can apply for residency if they make the necessary investment in a business in the U.S. and “plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers,” according to USCIS.

As of November 21, 2019, applicants must invest a minimum of $1.8 million in a business based in the U.S. or least $900,000 into a targeted employment area (TEA). Congress has set aside EB-5 visas for participants who invest in TEAs, which are usually high-unemployment or rural areas, to promote economic growth.

Some rules to know

All EB-5 investors must invest in a new commercial enterprise that was established:

After Nov. 29, 1990; or
On or before Nov. 29, 1990, that was:
- Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results; or
- Expanded through the investment, resulting in at least a 40% increase in the net worth or number of employees.

Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business, including:

A sole proprietorship;
Partnership (whether limited or general);
Holding company;
Joint venture;
Corporation;
Business trust; or
Other entity, which may be publicly or privately owned.

This definition includes a commercial enterprise consisting of a holding company and its wholly owned subsidiaries, if each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business.

This definition does not include noncommercial activity, such as owning and operating a personal residence.