Baby Boomers: The EB-5 Entrepreneur Visa as a U.S. Retirement Options for High Net Worth Foreigners

Overview of U.S. Retirement Options and Visa

Many countries offer retirement options to attract high net worth foreigners to their shores. At this time, contrary to popular belief, the United States does not formally offer a visa classification allowing foreigners to retire in the U.S. As a result of this misconception, many foreigners simply purchase homes in the U.S., mistakenly believing that owning a home allows permanent residence in the U.S. as is the case with many other countries. Instead, if an individual has a net worth of at least $ 1 million, he or she should first consider the option of investing in a Regional Center EB-5 Project in order to move the U.S. eventually as a lawful permanent resident prior to investing in personal real estate.

With regional center investment, the EB-5 program requires the principal investor to be a limited partner in a U.S. regional center and spend at least two years as a conditional permanent resident following initial approval. The investor is not required to “develop and direct” the business actively as with most investor visa applications. In conclusion, this can be a good option for an individual who has at least $ 500,000.00 to invest. An added perk is that immediate family members receive the same classification and can also reside permanently in the U.S.; live here, work here, attend public schools and universities– all very attractive options for many high net worth foreigners who can prove the lawful source of their investment funds.

Steps to investing in a regional center or becoming a resident of the U.S.

Proper investment planning must be followed well in advance of moving to the U.S. First, the appropriate tax and estate laws, treaties, currency restrictions and immigration regulations must be carefully consulted and analyzed by meeting with the appropriate professionals. Once concern is the processing time for the EB-5 program, currently taking more than a year once filed. Second, medical insurance should be purchased to cover a stay in the U.S., especially since social security benefits would not be available for at least five (5) years following approval of the visa. Third, real estate trends including foreclosure and growth rates, local schools, and crime statistics should be considered. Overall, the United States is considered a safe place to invest and reside for foreigners.

It may not be enough to simply purchase a home in the U.S.

If your intention in purchasing a “vacation home” in the U.S. is truly to vacation here, you may be still be able to do so using a non-immigrant classification such as a tourist visa, the “ESTA” program available to certain nationalities or even a student visa. However, as a cautionary note, these are temporary visas, not designed for use as retirement vehicles or for permanent residence as an immigrant to the United States!

On the other hand, permanent or immigrant visas resulting from approved EB-5 entrepreneur and certain business or family petitions would allow you to reside in the U.S. permanently as a immigrant or retiree. Taking one of these routes would ensure that you could successfully meet your family’s goal of remaining in the U.S. without forced interruptions such as required travel to your country of origin every 90 or 180 days, or more.

For example, although the ESTA system allows certain foreign nationals from 38 countries to travel to the United States temporarily for 90 days or less as a tourist or business visitor, these tourists can purchase homes and form corporations, but they generally must depart after 90 days and are not permitted to live in the U.S. permanently as they are considered “non-immigrants”.   Even so, future entries at the U.S. border could be compromised if an individual is suspected of living in the U.S. more than in his or her home country or if that non-immigrant no longer has a residence anywhere but in the U.S. Understanding the distinctions between non-immigrant and immigrant visas is critical to retirement planning.

Immigration Executive Order

CNN has reported that the President Obama’s Executive Order on Immigration might be signed as soon as late next week. This of course means that a previously unavailable pathway may soon open, allowing legalization (or semi-legalization), of millions of individuals who are presently without status.

While the details of the legalization program based on this executive order are still a matter of speculation, based on what is known so far, we anticipate that the president will take a two-pronged approach:

1) Deferred Action (possibly for individuals who spent 5 years in the U.S., have USC relatives, and no criminal record that would otherwise disqualify them); and

2) Enforcement Reforms.

It should be mentioned that it is also possible that instead of Deferred Action the president will move towards full legalization, akin to the “cancellation of removal” or similar process used in the past, though in the light of the current political climate, we believe action akin to Deferred Action is more likely.

Hopefully, we will all know more in the days or weeks to come.

In the meantime, Leslie I. Snyder P.A. will continue to follow the news on this important issue and be ready to assist  with these and other immigration matters.

EB-5 Investor Visas – New Boss to Speed Up Process

Foreign Investors, Rejoice!

The much debated EB-5 Investor Visa is about to get a much wanted overhaul. There’s a new program director at the helm, and he’s rocking the boat. At least this is what a recent article on Huffington Post is signaling.

EB-5 Investor VisaNicholas Colucci, the newly appointed EB-5 program director, held a teleconference in february, in which he proposed major improvments to this immigration visa, that paves the way to a Green Card for foreign investors and their families. He signals that he has all the intentions to stir the boat in the right direction. The question is, will Congress want to start rowing?

For years, this program destined to help grow the US economy through foreign investment, has been getting more and more sluggish and inefficient.

According to USCIS (United States Citizenship and Immigration Services), “USCIS administers the Immigrant Investor Program, also known as “EB-5,” created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors.” Basically, if you are an foreign investor, you have the opportunity to get a green card if you invest $500,000 to $1 million in a U.S. business venture, under certain conditions.

What Mr. Colucci intends to do, is bring more transparency and resources to the program, so as to make the entire process more efficient. Speeding up a process that normally takes up to 10 months to review is not the only goal, however. Increasing competency is also important, and Mr> Colucci is bringing on board more people with economic background, so that the decisions can increase the advantage to the US economy, as well. As the Huffinton Post article notes: “it makes no sense and is of little help to anyone in EB-5 to approve a project or investment that is not likely to succeed. Conversely, green-lighting projects that are well planned and likely to succeed will continue to strengthen the program’s image as well as provide much needed benefits to the U.S. economy.”

There are other issues that need improvement, besides the ones mentioned above, but they will need the help of Congress in order to become reality. For example, the EB-5 quotas: currently, the program allows for a total number of 10,000 visas to be approved, for year. However, this number is not limited to the investors alone, but includes the members of their dependands, as well. As such, the real number of investors that get approved for such visa, is actually around 3,000.

What Mr. Colucci is proposing, and Congress needs to vote into law, is to exclude the family members of those granted the investor visa, from counting towards the cap limits. This way, the number of actual investors will actually grow.

An added bonus is that these investors will not only obtain permanent residence (“green cards”) for themselves, their spouse, and children under age 21 in a relatively short period of time, but college age children will also have the option of attending in state colleges, a substantial potential savings to the individual investor, given the high cost of U.S. private higher education.  It also is a “no brainer” which potentially provides economic stimulus to the U.S. by the capital infusion and direct job stimulus.

The entire Huffington Post article HERE

Useful link: USCIS EB-5 Immigrant Visa Explained

Image courtesy of suphakit73 / FreeDigitalPhotos.net