EB-5 center OK’d: Company hopes to attract $50M in foreign funds
by Simon Shifrin, Idahobusiness.net
An Idaho company that hopes to plug the gap in financing for startups and other growing businesses in the state has won federal approval to serve as a “regional center” for foreign investment.
Invest Idaho LLC, formerly known as I-Cubed, joins the list of more than 70 centers across the country authorized to channel money from qualified foreign investors into the local economy under the EB-5 visa program.
The company plans to attract $50 million from qualified foreign investors as part of its initial phase, which will be used to set up a fund that could subsidize dozens of projects in any of Idaho’s 44 counties – bringing ideas out of university labs and startup garages, and helping small businesses test new products or markets.
“This really becomes a key – and, I think, historic – economic development milestone for all of Idaho,” said Miles Mahoney, chief executive officer. “Without capital, the great ideas die on the vine. … That’s the ‘valley of death.’ It’s a lack of seed funding. This is bringing $50 million of leverage capital into the state of Idaho.”
Rick Ritter, Invest Idaho’s chief operating officer and CEO of Idaho TechConnect, said too many good ideas in the state are getting bypassed by risk-averse banks and the angel funds and venture capital firms that are looking for massive rates of return as the economy begins to recover.
“None of those guys want to play with the kinds of folks we’re talking about,” he said. “The venture capital guys have moved upstream. Angel guys have moved upstream. It is now a worse problem than it was two years ago. That doesn’t mean we don’t have ideas. In times of economic downturn, we actually have more ideas, but less money than we had before.”
State officials have backed Invest Idaho’s efforts, with the Idaho Department of Commerce helping the company with its application to U.S. Citizenship and Immigration Services – the federal agency that oversees the program – and providing introductions to potential investors through its foreign trade offices.
Gov. C.L. “Butch” Otter has highlighted the EB-5 program as a “key element” of his effort to attract new foreign investment to Idaho as part of Project 60, his plan to grow the state’s annual gross domestic product to $60 billion from $52 billion.
“The value of U.S. residency, and being put on the fast track to citizenship, is an incredible tool to help us attract foreign investment in our Idaho businesses,” he said through a spokesman in response to the center’s creation. “We don’t want to miss this opportunity to infuse our economy with new investment that will stimulate job creation.”
The Department of Commerce says two other Idaho companies that plan to invest in resort development and tourism infrastructure are seeking regional center status. One of the companies has already submitted an application.
Invest Idaho submitted its application in March and received preliminary approval on Sept. 1, though it only confirmed the news to the Idaho Business Review last week.
The EB-5 program was launched under the Immigration Act of 1990. It offers green cards to foreign nationals who invest either $500,000 or $1 million in the United States and create at least 10 jobs within two years.
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Uptick in EB-5 investor visas could partly help spur South Florida economy
By Steve Gara - Miami Business and Industry Examiner, Examiner.com
I found it very interesting to see that the opportunity for foreign nationals to get a green card by way of investing here in the US, particularly in Florida is on the rise. Most of the interest in investment is in distressed real estate, properties that are located all over south florida, whether it is residential or commercial. There is a pilot program established for wealthy foreigners to get the EB-5 investor visa but they must to invest upwards of half a million dollars or more in a new or established business that leads to the creation of 10 or more full time jobs.
Until the pilot program was approved, a $1 million investment was typically required to be eligible for the EB-5 investor visa, which required investors to employ 10 workers directly. The lower investment threshold could be a significant incentive for more people to apply, attorneys say.
About 10,000 EB-5 investor visas are available annually, of them about 3,000 for the pilot program. Last year, fewer than 1,000 were issued under the relatively obscure EB-5 visa program. A move is under way in Congress to make the pilot program permanent in the aftermath of growing interest brought about by the recession.
This is good news for us locally because it jumps starts our local economy by bringing in much needed fresh capital from overseas since local sources for funds and credit still remain dry. This new influx of funds creates jobs, which in turn creates the momentum for the economy to get rolling again and could give south florida a competitive edge to emerge from the recession better off than most areas of the country.
As the debate heats up with immigration reform in the coming year, it will be interesting to see whether this program in fact gets expanded or becomes a casualty of bureaucracy.
EB-5 Investment Visa Video
EB-5 Investor Visa
On November 2, 2007, the Wall Street Journal published an article: “Got $500,000? The U.S. Awaits (Government’s EB-5 Program Offers Foreign Investors Green Cards for Job Creation)”.
A Federal program known as EB-5 (Immigrant-Investor Visa), administered by the U.S. Citizenship & Immigration Services (“USCIS”), encourages foreign investors to invest their way into the U.S.A.
Morrie Berez, chief of the EB-5 program at USCIS, stated: “The opportunity is truly beautiful to individuals who want to live and contribute their energy in the United States, and it creates economic growth and especially jobs for Americans.”
There are 10,000 EB-5 visas available every year, and only 867 issued in 2007. Based on the favorable currency arbitrage (Euro/Dollar, UK Pound/Dollar) the EB-5 visa is a cost-effective, time-efficient way to immigrate to the U.S.
An investor (and immediate family) can now obtain green cards (Permanent US Residency) with an EB-5 visa by investing $500,000 into a Government approved Regional Center (currently, over 30 Regional Centers). Investors receive the security of permanent US residence without repeated visa applications. Citizenship may be obtained after five years.
There are three forms of the investment that is made with the EB-5 visa:
1. Invest $1,000,000 into a business and hire ten employees anywhere in the USA, or
2. Invest $500,000 and hire ten employees in an area where the unemployment rate exceeds the national average by 150% or the rural population is less than 20,000, or
3. Invest $500,000 into a Government designated Regional Center and avoid direct employment.
The $500,000 investment is the least expensive way to satisfy the visa requirements in order to receive the permanent green card after the two-year period. Although the first two types of investment lead to permanent green card status, they require an additional showing that at the end of the two year period, ten qualified individuals have maintained jobs in the targeted employment area.
The minimum period of the investment is approximately three years. Once an investor emigrates they may apply to have ‘conditions’ removed after 1 year and 9 months in the USA. Processing takes up to six months. ‘Conditions removal’ means that the investment is no longer tied to the EB5, and the investor is then free to sell the investment.
With a green card via an EB-5 investment visa investors have the flexibility to take any job, run any business, retire and live anywhere in the USA, with the benefits enjoyed by U.S. citizens including property ownership or education.
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By N2H
