Although accredited investor status for citizenship is not strictly mandatory for the United States Citizenship and Immigration Services (‘the USCIS’), in order for individuals to qualify for the EB-5 visa program, the status is required by the Securities and Exchange Commission (‘the SEC’).
Read further to find out why accredited investor status is beneficial for many applicants.
EB-5 accredited investors should have an individual or combined (with a spouse) net worth of $1 million when initiating the investment. This amount cannot include the worth of the primary residence. Another alternative is to have an annual income of $200,000 or $300,000 jointly with their spouse in the two preceding years before the investment.
There should also be an expectation that this income amount will continue in the next year. For example, those investing in 2020, must supply income statements of 2018, 2019 and 2020.
The SEC requires companies in the United States that offer or sell securities must be registered with them or find an appropriate exemption. In Regional Centers that offer equity interests like limited partnerships to its EB-5 investors operate with an exemption with the SEC requirements. This is only if EB-5 investors are already accredited investors according to the Securities Regulation D. This means that even Regional Centers must show valid exemptions according to the US Securities Regulations to be eligible to offer equity interests to the investors in their programs. Approved EB-5 Regional Center with a good reputation will also choose to ask if the investor is an accredited investor before entering in an EB-5 program relationship.
EB-5 Regional Center Investor Program
EB-5 Regional Centers often will supply equity interests for sale. This provides interests that act in a more passive role in an organization such as policymaking. This is different from the direct investment EB-5 programs that are more dedicated to those who wish to take on a more active role in the organization such as daily operational tasks or managerial roles from the investor.
The EB-5 Regional Centers also have an advantage over direct investments when it comes to counting the job requirements of the program. Direct investments need to prove there are 10 physical jobs filled in a business to count for the job creation requirement of the program. However, regional centers have the ability to count indirect or induced jobs that are created as a result of the NEC. This allows investors more freedom in meeting the requirements.
Another advantage of EB-5 Regional Centers is that they offer investor programs within their targeted employment areas, (TEA). These areas allow for a minimum investment amount that is decreased to $900,000 instead of the direct investment amount of $1.8 million. This incentive will also attract more investors into the program.
What is an EB-5 accredited investor?
To qualify to be an EB-5 accredited investor, a person must have either a personal or joint net worth of $1 million. However, this amount cannot reflect the worth of the person’s primary residence and must come from other sources of income.
An accredited investor must also have an annual income of $200,000 individually, and $300,000 when in combination with their spouse, for the previous two years when applying for the EB-5 visa. It is also expected that the person will make the same amount during the year of the investment.
EB-5 accredited requirement for the EB-5 Program
While the USCIS does not make this requirement to be qualified for the EB-5 investor visa program, the SEC laws do expect this for investments into Regional Centers. For a number of regional centers that have gained favorable reputations in the US, they will expect their EB-5 investors to show proof of the income or net worth policy prior to allowing them to invest in the programs.
How to become an EB-5 accredited investor
It is possible that your immigration lawyer will be able to assist you in gaining your Accredited Investor Verification Letter for their EB-5 investor clients. Experienced attorneys will help the investor to submit the required documentation that proves their eligibility. It is highly recommended that anyone seeking the EB-5 investor visa should consult with an experienced immigration attorney to help with the process.