The American EB-5 Immigrant Investor Visa Program was established as a means to spur commercial investment from foreign nationals by providing a pathway to conditional permanent resident status in the United States.
Canadians can access this program through a direct investment that meets certain thresholds and creates at least 10 full-time American jobs. This program provides excellent opportunities for Canadians and foreign nationals living in Canada who wish to relocate and pursue a future in the United States.
Clearly, any foreign investment, especially large-scale cross-border investments, can create a certain foreign exchange risk. However, these potential pitfalls can be easily navigated with the help of the right foreign exchange partner. Before creating a new commercial enterprise, investors can set themselves up for success by making sure that their strategy for global payments is as efficient as possible.
From Conditional Permanent Residency to Citizenship in the US for Foreign Investors
Administered by US Citizenship and Immigration Services (USCIS), a division of the Department of Homeland Security, the EB-5 investor visa grants Canadian investors (as well as their spouses and children under the age of 21) conditional permanent residence.
After two years of compliance with the stipulations of the EB-5 program, EB-5 green card holders can apply to have their conditional status removed. Upon approval, EB-5 investors become lawful permanent residents of the United States.
After living in the United States for five years, investors and their families who obtained their permanent residency through the EB-5 program can apply for American citizenship.
EB-5 Visa Requirements
Commercial Enterprise Requirements
This program favours new investments (meaning, however, there are stipulations that permit access to this program for commercial ventures established prior to the introduction of the EB-5 program in 1990).
Within this program, “commercial enterprise” is defined as any ongoing, lawful for-profit business activity, including:
- A sole proprietorship;
- Partnership (whether limited or general);
- Holding company;
- Joint venture;
- Corporation;
- Business trust; or
- Other entities, which may be publicly or privately owned.
Note that this definition does not include noncommercial activities, such as owning and operating a personal residence, regardless of the amount invested.
Pre-EB-5 Visa
Commercial enterprises that predate the EB-5 program can be admitted (created before November 29, 1990), as long as the business was:
- Restructured or reorganized in such a way that a new commercial enterprise results; or
- Expanded through the investment, resulting in an increase of at least 40% in net worth or the number of employees.
Job Creation Requirements
EB-5 investors must create at least ten full-time positions for qualifying employees through their commercial enterprise.
A qualifying employee is a person authorized to work in the United States (either a U.S. citizen, lawful permanent resident, or other authorized immigrant, such as a conditional resident, temporary resident, asylee, refugee, or person residing in the United States under suspension of deportation).
This definition does not include immigrant investors.
Full-time employment means a position that requires a minimum of 35 weekly working hours. Jobs that are considered part-time, intermittent, temporary, seasonal, or transient do not qualify under this program.
It is possible for two or more qualifying employees to share a full-time position through a job-sharing arrangement as long as the weekly hour requirement is met, however, this does not include combinations of various part-time positions.
Required Capital Investment
For EB-5, investor capital, valued at fair-market value in U.S. dollars, is defined as cash, cash equivalents equipment, inventory, other tangible property, and debts secured by assets owned by the immigrant investor. This is true as long as they are personally and primarily liable, and the assets of the new commercial enterprise upon which the EB-5 application is based are not used to secure any of the indebtedness.
Immigrant investors must establish that they are the legal owner of the capital invested. Capital can include their promise to pay (a promissory note) under certain circumstances.
The minimum investment amount is $1 million USD or $500,000 USD if the investment is made in a Targeted Employment Area (Target Employment Areas are defined below).
Note: In 2019, changes to the EB-5 program reduced the minimum investment amounts by half (formerly $1.8 million USD or $900,000 USD if in a TEA) and led to the expiry of Regional Center Program (designations as regional centers were a pilot program that made exceptions similar to those for targeted employment areas).
Target Employment Areas
A targeted employment area is either a rural area (defined by the Office of Management and Budget as a county, city or town having a population of 20,000 people or less), or an area experiencing a high rate of unemployment (defined as at least 150% of the national average unemployment rate).
Source & Path of Funds
For an EB-5 visa application, all investments should be traceable to the source of origin and must have a lawful path of funds. Investors must provide appropriate documentation to demonstrate that the capital for their EB-5 investment was gained or obtained through lawful means and lawfully given to the new commercial enterprise in the United States.
Documentation Requirements
EB-5 investors will need to provide personal and corporate tax returns for the last five years across jurisdictions. Any financial statements that are part of an EB-5 application should go through an audit prior to submission.
Eligible Sources of Funds
For an EB-5 application, there are many eligible sources of funds, the following list includes examples of the type of documentation required for each.
Real Estate Assets
- Deeds and mortgage documents for all properties
- Lease documents for all rental properties that earn income
- Appraisals for any real estate pledged
Business Ventures
- An accountant’s appraisal of all business in which the investor owns a substantial interest (both inside and outside the U.S.)
- Ownership / officership documentation
- Business registration records
Bank Statements
- Up to three years of statements for all bank accounts
- Records of withdrawal of funds from one account and deposit of funds in another account
- Transfers must be supported by official letters from the banking institution(s) involved
Investments
- Three years of stock certificates, showing all owned investments or securities accounts
- Supporting documentation capital gains were made on investments before the preceding years
Contact Olympia Trust Company Currency & Global Payments for Global Payment Solutions
There are lots of moving parts involved in establishing a new commercial enterprise. If you are considering pursuing the EB-5 Immigrant Investor Visa Program, contact Olympia Trust Company Currency & Global Payments to speak with an Account Manager.
They can help you by mitigating your foreign exchange risk and developing customized solutions to help maximize the impact of your investment while reducing costs along the way.
