Interest in the EB-5 financing program has increased exponentially in the past year and is being explored by many developers and businesses in the United States as an alternative to traditional financing sources.
Congress established the Employment-Based Fifth Preference (“EB-5”)green card1 in 1990 to stimulate the U.S. economy through direct job creation and capital investment by foreign investors. Congress added a regional center pilot program to the EB-5 category in 1993 for pooling investor money in a defined industry and geographic area to create both direct and indirect jobs (“Regional Centers”). An EB-5 foreign investor must invest $1 million in a “new commercial enterprise” (as defined in the EB-5 regulations) in the U.S.; however, the requisite minimum investment is lowered to $500,000 if the investment is made in a high unemployment area or a rural area.2 At least 10 full-time jobs for qualifying U.S. workers must be created for each investment. Congress sets aside 10,000 immigrant visas annually for investors and their qualifying family members (spouse and minor children).