The US Investor Green Card programme has grown increasingly popular with South Africans, with applications having more than tripled (346%) over the last few months.
Nadia Read Thaele, director of LIO Global, a specialist firm in residence and citizenship by investment programmes, said that the jump in applicants is ahead of the expected increase in the required minimum from $500,000 (R7.6 million) to $900,000 (R14 million).
“Most applicants are concerned about their children and a big advantage of the programme is access to top quality education as children can study at US universities at same rates as US nationals,” she said.
“The programme allows family investors to include their spouse and unmarried children (under the age of 21) in their application and the investor and his/her immediate family may live, work or start a business anywhere in the US.”
Job creation requirement
Michael Honiball, director and tax specialist at Werksmans Attorneys, said that to be able to qualify for a Green Card, the applicant is required to invest in a project that creates at least 10 jobs for US workers.
There are two ways to invest, said Honiball.
A direct approach would entail investing the funds directly into one’s own business. The investor would have to actively manage the business and prove that the business has created at least 10 jobs.
However, this approach also comes with a large regulatory burden to ensure that the business meets the strict regulatory requirements of the EB-5 programme.
It also means that the investor will have to spend most of his time in the US to prove that he is actively managing the business.
The other way is to take an indirect approach. This entails investing in an ‘off-the-shelf’ investment project where all the financing and regulatory requirements are already in place.
By investing in such a project, the applicant is able to rely on the indirect job creation method i.e. by taking the total jobs created over the lifecycle of the construction project and dividing it by the amount of EB-5 investors, there will be at least 10 jobs created per investor.
In addition, many projects on the market have pre-approval from the USCIS (United States Citizenship and Immigration Services) for having already met the requirements of the EB-5 programme, including job creation.
If the investor’s goal is to obtain a Green Card and not actively manage a business then this approach is cheaper, more convenient, and reduces the risk significantly, saind Honiball.
How long does it take to get a Green Card?
It takes approximately 18-24 months from when the investment is made to obtain a Conditional Green Card, said Honiball.
“From the moment that the applicant has obtained a Conditional Green Card, he has all the rights and obligations of being a US permanent resident. This means the immediate ability to live, work, open a business or study in the US.”
Honiball said that the Conditional Green Card is valid for two years, and before the end of this two-year period, the applicant will need to apply to have the conditions on his Green Card removed.
“To do so he will have to prove to the USCIS that his investment has created at least 10 US jobs, said Honiball.
“Once the USCIS is satisfied that the investment has met all the requirements of the EB-5 programme, the applicant’s Green Card will be converted into an Unconditional Permanent Green Card. It is at this stage that the funds that were invested in the project can be returned to the investor.”
Honiball said that there is a last-minute rush to participate in this programme from investors from across the world owing to imminent changes.
“From 21 November 2019, the minimum investment amount is set to increase from $500,000 (R7.6 million) to $900,000 (R13.7 million),” he said.
“This means that in order to meet the aforementioned filing deadline all applications need to be submitted by the end of October at the latest in order to qualify for the investment amount of $500,000.
“Furthermore all applications that are submitted prior to 21 November 2019 will not be affected by additional changes to the regulations that also come into effect on this date.”
These changes raise the eligibility requirements of the EB-5 programme, Honiball said.
“The net effect of the price hike and other changes to the regulations will have the effect of making it much more difficult to obtain an EB-5 Investment Visa after 21 November 2019.”