- 10,000 green cards reserved each year for the EB-5 regional center program
- No minimum education requirement
- No business or management experience requirement
- No language requirement
- No excessive waiting periods or quota backlogs
- No sponsor needed
- Investment capital can come from any lawful source
- Investors not required to manage their investment on a daily basis so they may pursue other professional and personal ventures inside or outside of US
- Satisfy job creation requirements by counting both direct and indirect jobs
June 11, 2010, 8:24 AM ET
Immigrant Investors, An Underserved Market
Finding new clients is a challenge for all financial advisers. But most advisers are overlooking an untapped and growing client base: wealthy foreign investors seeking to gain permanent residency in the U.S.
EB-5 green cards also allow affluent foreign investors (and their family members) to work in the U.S. in any capacity, go to school, or retire here.
Each year, 10,000 visas are available for EB-5 investors looking to come to America.
According to the U.S. State Department, the number of so-called “investor green cards” issued nearly tripled to 4,218 in the fiscal year 2009 ended September 30, compared to just 1,443 EB-5 visas issued in fiscal year 2008.
TAX PLANNING FOR EB-5 INVESTORS BECOMING PERMANENT RESIDENTS
With proper advance planning, EB-5 Program applicants can undertake measures to minimize their U.S. FIT and FTT exposure. Thus, applicants for the EB-5 Program should consider tax planning prior to becoming U.S. residents, that is, while they are still non-residents. This tax planning can be formulated so as to take effect only when the applicant knows that he or she is eligible for the EB-5 Green Card, but the urgency for the applicant to undertake this FIT and FTT planning becomes more critical as the EB-5 application proceeds towards permanent residency, as depicted below:
TIME LINE FOR EB-5 PROCESSING AND TAX PLANNING
The "EB-5" Investor Visa Program provides foreign nationals an innovative and flexible path to permanent residency in the U.S. (Green Card) for themselves, their spouses and their children less than 21 years of age.
The EB-5 Program permits an applicant to invest a minimum of $500,000 in a U.S. Government designated Regional Center in the U.S. The Regional Centers are designed to allow pooled investments to create jobs in targeted high-unemployment areas in the U.S. Thus, the qualified applicant can obtain a Green Card without having to create their own business in the U.S. or to even emigrate to the U.S. until the Green Card has been issued. A Green Card gives the holder the right to live and work anywhere in the US.
EB-5 Visa Program Process
◆ Step 1 - The qualified applicant files form I-526, a petition requesting the U.S. Citizenship and Immigration Services to certify the applicant and the investment as eligible for the EB-5 Program.
◆ Step 2 - Upon approval of the I-526 petition, the applicant files an immigrant visa application and is interviewed at the Embassy in the applicant's home country. Upon approval of the application, the applicant is issued an immigrant visa to the United States. A conditional Green Card is issued to the applicant shortly after his/her arrival in the United States.
◆ Step 3 - After two years, the applicant must file to remove the "condition" from the Green Card using form I-829. At this time, the Regional Center will provide proof of job creation.
Tax & Estate Planning for EB-5 Program Applicants
Citizens and permanent residents of the U.S. are subject to federal income tax (FIT) on their worldwide income and to gift and estate tax (FTT) on their assets located anywhere in the world, while nonresidents of the U.S. are taxed only on their income and assets arising or located in the U.S.
MDH specializes in international income and estate tax planning for EB-5 Program applicants, and we work with nationally-recognized immigration law firms in the U.S. to assure a seamless transition for applicants becoming permanent residents of the United States. Some of our planning techniques include corporate reorganizations, foreign and U.S. trusts, partnerships, limited liability companies, life insurance, annuities, and gifting programs. We also work with our client's advisors in his or her home country to assure that the client receives complete and comprehensive tax and business planning services, and that the client and their loved ones maintain the standard of living to which they are accustomed.
Kevin J. Mullin, J.D., C.P.A., has been practicing law for over 15 years with a focus on advising foreign investors on their U.S. real estate investments and international business and tax planning. Mr. Mullin has offices in Denver, Colo., and Washington, D.C. http://www.intl-taxlaw.com/ . He also maintains representative offices in Latin America and the Middle East to support his professional and client relationships globally.