Two Simple Questions
The two most commonly asked questions by potential U.S. immigrant investors are “HOW MUCH DOES IT COST?” and “HOW LONG DOES IT TAKE?”
In attempting to provide as complete an answer as possible to those important questions, it is hoped that potential EB5 investors and their advisors will find some useful guidance.
1. HOW MUCH DOES IT COST?
Minimum Investment Amount
The EB5 Reform and Integrity Act of 2022 (RIA), set the standard minimum investment amount at $1,050,000. These amounts are locked in by statute until January 1, 2027 and will increase in increments of $50,000 thereafter based on the change in the urban consumer price index.
There are three ways the minimum investment amount may be reduced to $800,000.
Investment in a Rural area. The determination of rural is straightforward. Any place with a population less than 20,000, and not located in a metropolitan statistical area.
Investment in a High Unemployment Area. The determination of a high unemployment area (HUA) takes a little more work. Due to past aggressive gerrymandering in some major U.S. cities, the USCIS has now taken direct oversight of HUA determination. The RIA defines an HUA as an area contained within contiguous census tracts where the unemployment rate for each census tract and any adjacent census tract is at least 150% of the national average unemployment rate.
Investment in an Infrastructure Project. The term ‘infrastructure project’ means a capital investment project in a filed or approved business plan, which is administered by a governmental entity (such as a Federal, State, or local agency or authority) that is the job-creating entity contracting with a regional center or new commercial enterprise to receive capital investment under the regional center program as financing for maintaining, improving, or constructing a public works project.
Historically, most EB5 investors have gravitated to the reduced investment amount. The difference is currently $250,000. When the standard minimum amount increases in 2027, the RIA mandates that the reduced sum shall not be less than 75% of the standard investment.
USCIS FILING FEES
On January 23, 2023 U.S Citizenship and Immigration Services (USCIS) proposed a doubling of investor EB5 investor filing fees from just under $10,000 to over $20,000 per investor family. This increase was published in the Federal Register and is now in the comment and analysis phase, as required by the Administrative Procedures Act. Therefore, implementation of the increased fees might happen as soon as March or April of 2023.
|
Form |
Current Fee |
Proposed Fee |
|
I-526E Immigrant Petition by Regional Center Investor |
$3,675 |
$11,160 |
|
I-485 Application to Register Permanent Residence or Adjust Status |
$1,140 |
$1,540 |
|
I-765 Application for Employment Authorization (with biometric services) |
$495 |
$650 |
|
I-131 Application for Travel Document |
$575 |
$630 |
|
I-485, I-765, I-131 Concurrent Filing |
$1,225 |
$2,820 |
|
I-829 Petition by Investor to Remove Conditions on Permanent Resident Status |
$3,750 |
$9,525 |
There are additional increased fees which must be paid by the Regional Center and its sponsored projects. While these are not paid directly by the investor, they are worth noting, as they will impact future Regional Center projects.
|
Form |
Current Fee |
Proposed Fee |
|
I-956 Application for Regional Center Designation |
$17,795 |
$47,695 |
|
I-956G Regional Center Annual Statement |
$3,035 |
$4,470 |
DEPARTMENT OF STATE FEES
Many, if not most EB5 investors begin their immigration process from outside the United States and will acquire an immigrant visa at a U.S. Consulate in their home country. The Department of State filing fees for processing and issuance of an immigrant visa are $345.
FEES TO AGENTS
The RIA contemplates fees to direct and third-party promoters including migration agents (Agent Fees). All Agent Fees must be be fully disclosed and paid in addition to the minimum EB5 investment.
Each regional center, new commercial enterprise, and affiliated job-creating entity shall maintain a written agreement (Fee Agreement) between or among such entities and each direct or third-party promoter operating on behalf of such entities that outlines compliance with the rules and standards of both USCIS and the Securities and Exchange Commission (SEC).
While the Fee Agreements must be made available for inspection by USCIS and the SEC, there is no publicly accessible data of the amount of promotional fees. Current and historical market trends indicate promotional fees may be in the 5-10% of the EB5 investment. Depending on the investment, this might be $80,000 - $100,000 – a significant amount. In addition, some projects may pay trailing commissions.
USCIS places the onus upon EB5 investors to ask three important questions.
Who is getting paid?
How are they getting paid?
How much are they getting paid?
The RIA states that each EB5 investment will “include a disclosure, signed by the investor, that reflects all fees, ongoing interest, and other compensation paid to any person that the regional center or new commercial enterprise knows has received, or will receive, in connection with the investment, including compensation to immigration consultants, agents, finders, or broker dealers involved in the offering, to the extent not already specifically identified in the business plan filed”.
Important Note to Investors and immigration attorneys: If you make contact with an EB5 project, without the assistance of an intermediary, you may be able to negotiate a significant discount in agent fees published in the filed business plan. Neither USCIS nor SEC have any problem with a reduction in agent fees.
IMMIGRATION ATTORNEY FEES
Given the complexity of the EB5 program, prospective investors are strongly advised to retain the services, assistance and guidance of a competent U.S. immigration attorney. There are a couple of good public resources available to find an attorney. The American Immigration Lawyers Association consisting of nearly 16,000 attorneys has a listing of EB5 qualified attorneys. www.AILA.org In addition, the EB5 trade association, IIUSA, has a large number of experienced EB5 attorney members. www.IIUSA.org
Legal fees are negotiated privately with the attorney, and it is believed those fees may range from $5,000 on the low end to $25,000 or more on the higher end.
In addition, prospective immigrant investors may wish to seek professional advice regarding U.S. real estate, business structures, business feasibility, securities and taxation
2. HOW LONG DOES IT TAKE?
TO GET A GREEN CARD
Best Case Scenario: Under a section of the RIA entitled “Timely Processing”, USCIS sets out a goal of completing adjudications of I-526E Petitions for certain investors in 120 days after receipt of the I-526E Petition. Those certain investors are those investors who have made their investment in a Rural Area or a High Unemployment Area.
To meet these lofty goals, it appears that USCIS is attempting to set up an electronic filing system whereby the regional center, project documents and bona fides of all persons involved in the regional center program are vetted and approved in advance of the EB5 investor’s I-526E petitions. In light of this streamlining, 4-8 month processing times may not be wildly optimistic or unreasonable expectations. Once the I-526E is approved, it should take another 6 -8 months to consular process an EB5 immigrant visa.
New Adjustment of Status Option. If the investor is already in the U.S. and chooses concurrent EB5/Adjustment of Status filing, then initial benefits (employment authorization and travel document) should issue within 2-8 months. The final adjudication and issuance of the green card may take another year or so.
Worst Case Scenario: USCIS publishes its processing times on its website. www.egov.uscis.gov/processing-times/
Current published processing times for I-526 petitions average 5 years!
Note, however, that the data references pre-RIA enactment I-526 petitions.
USCIS calls petitions in that queue “Immigrant Petitions by Standalone Investors”. Most of the petitions referenced however are not “Standalone” – they are pooled regional center investments.
There is no published data for I-526E Petitions. In the face of that confusing and ugly historical data, conservative prognosticators might guesstimate 2-year processing times for I-526E Petitions filed under the new Regional Center program. The fact is, we just don’t know. However, as the new I-526E Petitions filed in the summer and fall of 2022 make their way through the system, we should have more useful data within the next six months for guidance.
TO OBTAIN RETURN OF INVESTED CAPITAL
The RIA states that EB5 minimum investment amount is “expected to remain invested for not less than 2 years”. That said, most EB5 projects on the market today target return of capital around five years from investment or approval of I-829. Timing of return of capital is less of an issue if the EB5 project provides a reasonable return on investment.
Contact us today for more details on our projects: