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US EB-5 investor visas:
what you need to know
Head of Product and Strategy
Nov 06, 2019
The US EB-5 visa programme – run by the US Citizenship and Immigration Services (USCIS) – enables would-be emigrants to the US to become permanent residents by investing in an enterprise in what’s known as a ‘targeted employment area’ in that country. The investment needs to create or preserve at least 10 permanent full-time jobs for US workers.
The EB-5 programme was established in 1990 by Congress with the aim of stimulating the US economy through job creation and capital investment by foreign investors. Most EB-5 projects involve commercial real estate developments. Investors can either consider the projects of individual property developers, or invest through regional centres designated by the USCIS. Schemes operated via these centres are often still backed by single-asset developers, however. Another option is therefore to opt for a diversified model that invests in a portfolio of property assets instead of a single project.
Earlier this year, the USCIS introduced new regulations increasing the minimum amount to be invested in a targeted employment area from US$500 000 to US$900 000. Effective from 21 November 2019, the sharp hike in the investment level will reduce the number of South Africans able to make use of this option to obtain US permanent residency.
Besides the looming investment increase, South Africans aiming to go this route to secure a green card need to consider these crucial factors:
In a nutshell, if you’re considering the US EB-5 visa programme, you should approach it in the same way you would an investment: be clear on the objective (in this case, obtaining a green card) and scrutinise the risks associated with it.
If you’re going the single-asset route, ensure you conduct a thorough due diligence on the project, including the financial situation of the developer. If you need further protection against loss of capital, however, then select appropriate diversified models or schemes run by reputable persons to mitigate the risks. The best option is to seek advice from a professional to provide guidance on the process.
If you’d like further information on the potential tax consequences of investing in the US EB-5 visa programme, please contact Anton Maskowitz at email@example.com or 011 778 6641.
Sanlam Private Wealth manages a comprehensive range of multi-asset (balanced) and equity portfolios across different risk categories.
Our team of world-class professionals can design a personalised offshore investment strategy to help diversify your portfolio.
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We collaborate with third-party providers to offer collective investments, private equity, hedge funds and structured products.
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