Receive United States of America permanent resident status through purchase of pre-construction real estate.
Disclaimer: First of all we would like to emphasis that neither web-portal www.askGrand.com, nor Grand Real Estate Company and their employees or representatives are NOT licensed immigration attorneys. All information below cannot be considered as legal advice. We recommend anyone seeking for legal advice to contact appropriate state licensed attorneys.
Below, we simply share the information that has become available to us during ordinary course of our real estate business. We strongly recommend verifying everything via your attorney.
United States permanent resident card (also known as Green Card) through investments (EB-5 program) is one of the most popular way of immigration to the United States of America.
Eb-5 investor visa is aimed to attract foreign capital to United States in order to create additional jobs for US citizens. Obtaining an EB-5 visa provides direct way to obtaining a Permanent Residency (Green Card) - a document that allows a person who is not a US citizen to live and work in this country. Permanent resident status is granted to the investor himself, as well as to his/her spouse and minor unmarried children (under 21 years of age) at the same time.
Foreign EB-5 investor status has many advantages compared with other immigration categories. The EB-5 program allows you to get a Green card relatively quickly (the whole process takes 1.5-2 years, sometimes less) and is open to all foreigners.
There are two versions of the EB-5 Program: standard and pilot.
If the investor wants to use the Standard Program, then he must invest $ 1 million in the US economy (or $500,000 if the project located in the target employment zone) and create and maintain for several years a minimum of 10 jobs as a result of implementing his investment project. At the same time, the investor should take direct part in the management of the enterprise - that almost always means - to be present in the United States. This option is not suitable for everyone.
Since 1992, the US Congress has established a pilot version of the EB-5 Program. The pilot option allows investors to pool capital and invest in major projects through the Regional EB-5 Centers. There are 3000 visas for foreigners allocated specifically for the Regional Centers annually.
Each Regional Center must be appropriately licensed by Unite States Citizenship and Immigration Cervices (USCIS). Getting such a license requires substantial work and financial resources and it usually takes more than a year.
Most visitors of pre-construction real estate portal www.askGrand.com and Grand Real Estate Company clients are interested in immigration to the USA through the purchase of real estate. Therefore, we will focus on this aspect only.
There are many Regional Centers have been created during the last several years. It is common for the Regional Center project to be located in the targeted employment zones, so the amount of investments required is reduced to $ 500 thousand. The responsibility for ensuring that the project meets the criteria of the EB-5 Program is borne by the Regional Center. Responsibility for the implementation of the project and the creation of the planned number of jobs is borne by the developer company. At the same time, developer also finances the project at his own expense and via banks construction loan. Thus, all parties (investors, the Regional Center, the bank and the developer) are equally interested in the successful completion of the project, and this is one of the reasons for the popularity of the EB-5 Pilot Program.
The EB-5 program is targeted to develop most straggled regions of the United States, so overwhelming majority of such Regional Centers are not located in places where the person who has extra $ 500,000 would like to live in with his family, but in some "rural" parts America. Moreover, in approximately 90% of cases, foreigners are invited to invest their half a million dollars for 5 years (this term is one of the main requirements of the EB5 program) in the construction of facilities like ski resorts, city infrastructure projects, distribution centers and etc. Since under the terms of the program, the return of the invested money to the investor cannot be guaranteed by the regional center (although, of course, everyone promises that their project is very safe), then the question arises for many clients - is it profitable in the end? Invest $ 500,000 for 5 years for a meager percentage (usually 1% -1.5%) today in order to obtain a residence permit in the US for the whole family? It sounds good if at least green cards received and $500,000 investment did not become a “donation”. After all, there is always the likelihood that, for reasons beyond the investor's control, the project will be delayed or even will not be completed at all ... Therefore, it is critically important to select the correct (verified) EB5 Regional Center.
After reading the snippets of information about the investor visa EB-5 many Grand Real Estate Company clients turn to us with the question: "How to obtain US citizenship (residence permit)? I still buy an apartment more than $ 500,000! "
Until recently, the answer was:" No! Buying a house or apartment in the US does not give any immigration privileges. " But everything changes ...
There was no worthy preconstruction development projects approved in accordance with the EB-5 program as a regional center in South Florida for a long time. More and more investors were forced to invest in Delaware, Idaho and other states. But fortunately some local real estate developers saw for themselves the benefits of the EB5 program and obtained the status of a regional center. It is important to understand, that there is a very limited number of new construction residential projects approved as EB-5 project!
What are the advantages of investing in residential new construction development projects that have been approved as Regional Centers?
1. You need to invest only $ 500,000, not $ 1 million.
2. An investor does not have to take an active part in the management of an enterprise. The Developer of the project and the Regional Center are engaged in this.
3. Creation of minimum required 10 jobs for your investment (mandatory requirement for each investor under the EB5 program) is obvious and will be dictated by the construction process itself. When the Regional Center was established, it was already calculated how many jobs will need to be created to build the building.
Attention! One of the main requirements of the EB-5 program is the mandatory documentary confirmation of the legal origin of the funds ($ 500,000) invested by the investor. If such documented confirmation is not possible for any reason, the application will be rejected by USCIS.
In order to get the cherished US Green Card for all members of your family, you as an investor in the Regional Center must fulfill several conditions:
1. To Invest a minimum of $ 500,000
2. To invest this money in target employment area (Regional Center)
3. To Create a minimum of 10 workplaces
4. To keep the investment active for at least 5 years
This is how these conditions are met when buying an apartment in a new building approved as a Regional Center:
1. To invest at least $ 500,000. Obviously, when you are buying condominium unit worth $ 500,000 or more in a new building approved as a Regional Center - this condition is met. Moreover, the apartment itself can be cheaper, but to fulfill the terms of the program, you still need to invest at least $ 500,000. So at the end you will receive your money back in the form of new condominium unit delivered to you upon completion, and the rest in the form of actual money (but only after the expiry of the mandatory period of your investment - 5 years)
2. To invest $ 500,000 in in target employment area (Regional Center). The new building has already received the status of the Regional Center and all necessary licenses for this, so this condition is also fulfilled when the project is licensed as Reginal Center.
3. Create a minimum of 10 jobs. It goes without saying that you will not be asked for a certificate and a list of the lucky employees who had an opportunity to work with you. Moreover, such a list is not required from a developer either. Special tables have been developed by Immigration authorities that demonstrate the approximate number of jobs that will be created in a certain region, subject to the investment of a specific amount as a result of the implementation of a particular project.
For example, it is estimated that for the construction of a 60 apartment building in a certain area, it is necessary to invest $ 25 million. Part of the funds will go to purchase materials. To produce them and to deliver to construction site will create a number of indirect jobs. The other part of total investment will go to create jobs - hire builders and maintenance personnel. So the government already knows that in order to create $ 25 million building, a total of about 260 workers will have to be employed. If the project is complete, then workers were hired. The fact of employing workers is practically obvious, when the result is obtained – completed building(of course, we have simplified a little here - the regional center will prove this fact by reporting on purchased materials and paid salaries, but this is the burden lies on the Regional Center – not at investor.) By the way, that's the reason why despite the fact that there will be 60 apartments in the future building, only 10-15 investors will be able to be classified as Eb-5 program investors (the limit on the number of jobs created). The remaining apartments in this building will be sold on general terms.
4. To keep the investment active for at least 5 years. Here is a small problem, but it also can be solved. As you know, it takes to build the building about 1,5-2 years. By the time of construction completion, investor and his family will obtain temporary resident permit. Only two years after that, he be able to ask the US government to remove the temporary restriction. But the development is already built. Therefore, an apartment bought under the EB-5 program cannot be sold until the end of the 5-year period (restriction on the sale). For the same reason the Regional Center will not return the balance until the end of the 5-year period if the purchase price of the condo unit was less than half a million Dollars. There are no restrictions on renting the subject unit.
Legally everything looks in the following way:
1. Group of EB-5 Investors registers its own company LLLP (Limited Liability Limited Partnership). Trust fund is created from investors' deposits ($ 500,000 each)
2. This LLLP company provides a loan to the developer for the construction of a residential project (let’s say at 1.5% per annum) and uses developer’s property as collateral (land under construction).
3. At the same time, each individual investor goes into agreement with the developer for the construction of a particular condominium unit in the future development, which states that the payment period for this apartment comes due in 5 years.
4. Simultaneously, each investor submits an Immigrant Petition by Alien Entrepreneur to the US Immigration Service (Form I-526) in order to obtain temporary Green Card (for 2 years) for all family members. Approval usually takes 1-1.5 years.
5. In about 2 years the building is completed and each investor receives his residence from the developer as a return on his investment. (If the purchase price for condo unit is more than half a million dollars, then investor has to pay the difference at the closing of the transaction).
6. According to the terms of the original agreement between the company created by investors (LLLP) and the project developer, the developer must repay his loan to LLLP after 5 years. Therefore, the Regional Center continues to exist until the expiration of this period. On the other hand, under individual agreements to purchase units in the project there is a restriction to sell the condo residence, which also expires in 5 years from the date of the loan to the Developer (that is, approximately 3 years after the delivery of the project).
7. 90 days prior to the expiry of the temporary Green Card (2 years after it was originally granted), investor submits an application to Immigration and Citizenship Services for the removal of such restrictions (Form I-829) from his Permanent Resident Permit. After approval of this petition, investor and his family members receive unconditional permanent Green Card (for 10 years). This Green card can either be extended unlimited number of times, or you can change the permanent resident status to the status of a US citizen. Application for citizenship can be filed after 4 years and 9 months from the receipt of the first (conditional) green card.
8. In 5 years, two events occur simultaneously: 1. Developer must repay his loan to investors at LLLP. 2. Investors should close their debt under individual contracts for the sale of condominiums to the developer. The amounts are the same - $ 500,000. Both agreements are closed at the same time. Restriction of resale of investor units is waved.
As a result, in 5 years:
- EB-5 program conditions are fulfilled completely
- Developer built the project partly financed by a cheap loan from EB-5 investors.
- Investor receives (1)condominium unit in a new development as a return of the money originally invested in approximately two years ( No need to wait all 5 years to see the return) together with (2)Permanent Residency for the whole family (conditional two year residency at the beginning and permanent one after that)
The advantages of investing in a regional center as residential pre-construction development are that
- It is Local (not in a distant state, but here in a well-known Florida)
- Your investment is well protected. Due to the fact that money invested are recorded as the company's loan to the developer, investors will be able to demand the property of the developer (at least the land on which the project is to be built) in an unfavorable situation if any to occur.
- The actual return of the investment in about 2 years in the form of condominium unit (and not after 5 years (as usual).
- The actual return of the investment is NOT in the form of any shares of a future recreational facility or entertainment center, which will later have to be sold. Its actual unit that investor can watch being built.
- There is no need to be constantly present in Florida or the USA
Types of investments in pre-construction residential developments may vary significantly from project to project depending on the conditions and structure approved by the regional center. Moreover, even the conditions in the same project can change for many reasons during the time. Therefore, we encourage you to contact Grand Real Estate Company representatives at 954-822-0556 or askGrand.firstname.lastname@example.org for any questions you might have. Our specialists will also be able to provide you with the latest data on available projects approved as a Regional Center for the EB-5 investors.
We are always happy to help you.