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Monday, December 31, 2012

You Can't "Buy" a Green Card, But....

...if you have $500,000 to invest in a commercial enterprise in a targeted employment area ($1,000,000 in a non-targeted area), and plan to create at least ten permanent full time jobs for qualified US workers, then you may be in luck.

The New York Times has a story about the EB-5 Immigrant Investor visa program today, and the investment that it has spurred in a remote part of Vermont, described by the developer as the "biggest economic development project Vermont has ever seen."  Promising to create 10,000 new jobs, the price tag on the construction spree is $865 million. 

What's really interesting is how the project got financed.  The lead developers are investing $90 million, and they have raised $275 million for the first phase of the project from 550 foreign investors in 60 countries.  Phase II will require an additional 1,000 investors willing to invest $550 million.  Those investors are seeking a green card through the EB-5 Immigrant Investor program. Around since 1990, the program has been particularly popular with hotel developers since the financial crisis put a crunch of commercial real estate loans in 2008.  Developers particularly appreciate that EB-5 investors are focused on more than the profitability of the project.  As one observer put it bluntly:  “Foreigners are buying visas and are much less concerned about the rate of return they earn on their investment,” said David Loeb, a senior analyst at Robert W. Baird.

Although the program is not limited to investments in real estate, investments in commercial real estate have been a popular mechanism for gaining the EB-5 visa.  Companies have sprung up to help vet real estate investments and assist potential investors in navigating the process.  For example, one company advertises on its website: "American Life offers secure real estate investments to local and immigrant investors ... You make an investment that also qualifies for an EB-5 immigrant visa and we provide the necessary services and information required to obtain your U.S. green card."

The creative financing employed by the Vermont developers is still fairly unusual, but the program that they are leveraging has been growing rapidly.  According to the Times, in 2006 the government issued 802 EB-5 visas.  In 2011, it issued 7,818.  There is an annual limit of 10,000 EB-5 visas.

So, if you have always wanted a U.S. green card and have an extra $500,000 or $1,000,000 lying around, you probably want to act quickly in 2013 before the EB-5 visas run out. 

Tanya Marsh

http://lawprofessors.typepad.com/property/2012/12/you-cant-buy-a-green-card-but.html

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