EB-5: The Best Route for Russians Seeking a U.S. Education for their Children

Irina Lust

Irina Lust, Head of Russia Practice Group, Davies & Associates LLC
Irina Lust heads up our Russia Practice & East European Practice Group at D&A. She has been featured in multiple newspapers, tv shows, and print media publications for her opinion on US business immigration as it pertains to the Russian speaking world. Having immigrated to the United States from Siberia, Irina is a native Russian speaker.

 

Most of the Russians I speak to are reluctant to emigrate. They are proud of their country and those who choose to move overseas are often motivated by their children’s education. Since America has some of the best universities in the world, it is understandable that many Russians wish to send their children here. 

Almost 5,000 U.S. student visas were issued to Russian nationals last year – more than Great Britain and almost as many as France and Germany. These F-1 student visas are classified as non-immigrant visas and students must return to their country of origin after graduation, or in some cases, after the completion of an extra training period. 

This is not always enough. Many parents want to ensure their children can stay on after completion of studies. Working in the United States offers lots of professional and personal advantages, many of which can be brought back to Russia in the future. 

For those who can afford it, the EB-5 visa is the best solution to this. This visa allows the applicant, a spouse, and dependants under the age of 21 to live, work and study in the United States. It is the fastest route to a green card currently available to Russian nationals.

The EB-5 program requires an investment of $500,000 in an area of high unemployment or a $1 million investment in other parts of the United States. There are two routes open to investors: to make a direct investment in a new commercial enterprise, or to make an indirect investment through a government-approved “Regional Center” fund.

Regional Centers compete for investment from EB-5 applicants for a range of commercial real estate projects. This is usually the most straightforward route because the Regional Center ensures compliance on behalf of the applicant. For example, there is a requirement that each EB-5 investment should create and sustain ten full-time American jobs. There are over 800 Regional Centers of varying quality across the United States. Our team analyse Regional Center projects from a real-estate finance perspective and help clients identify any risks associated with these projects. 

While the overwhelming majority of clients opt for the Regional Center route, the Direct EB-5 route offers entrepreneurs exciting business opportunities in the United States. We are one of the few U.S. immigration firms with significant experience of this pathway, and both our immigration and corporate legal teams are able to offer end-to-end solutions for our clients. 

We have helped a number of Russian clients secure EB-5 visas over the years. As a Russian immigrant to the United States myself, I understand the joys and the challenges of this whole process. It has been my pleasure to build personal, as well as professional relationships with my clients, even, in some cases, touring university campuses so that they can realise their dream of an American education for their children. 


EB-5 Visas as an Alternative to the H1-B Visa

Mark Davies

Mark Davies,Mark Davies is Chairman and Managing Partner of Davies & Associates. Dual qualified as a lawyer in the U.S. and the UK, Mark chairs our Global Business and Investor Team

 

Most highly skilled Indians looking to move to the United States are familiar with the H1-B visa for specialty workers. Yet fewer know about another more reliable and less time-consuming pathway: the EB-5 Investor Visa program.

Nearly three quarters of all the H1-B visas set aside for highly-skilled migrants are awarded to people from India. But this most sought-after route to working in the United States has never faced more uncertainty. 

The H1-B visa is a lottery-based, non-immigrant visa that requires sponsorship from an applicant’s employer. Approval rates are subject to the inconsistent and ever-changing immigration landscape in the United States where immigration is a contentious political issue. 

Only about one in three applicants are successful in their quest for an H1-B visa. And even when work-visa petitions are approved by the US Citizenship and Immigration Services (USCIS), there is still a considerable amount of uncertainty that can discourage the sponsoring employer.  

The EB-5 visa offers a way to sidestep all this uncertainty. This program allows foreign immigrants to invest a minimum amount of $500,000 in the US economy and acquire a Green Card for their immediate family and themselves within a span of 18 – 20 months.

The applicant can choose to invest their money in a so-called Regional Center fund, which uses the money to build anything from hotels to golf courses across the United States. The Regional Center takes away all the burdens of reporting compliance to USCIS. For example, the Regional Center will prove that the investment is being used to create ten American jobs per applicant, which is a requirement of the EB-5 program. 

Since there are almost 1,000 Regional Centers of varying quality across the United States, it is vital that that an applicant selects an attorney who is not only experienced in EB-5 visas, but who also has business acumen. This will help them navigate this web of opportunities so as to maximize the chances of the investment capital being repaid and ensuring there are no risks to the green card.  

The EB-5 has grown steadily in popularity in the last two years and there is a chance that USCIS may start operating a waiting list for Indian nationals from 2019. Yet, for those who want to acquire the ability to work in the United States sooner, other options are available.

 

One possibility is the E-2 visa, which allows a person to live in the United States for the purpose of owning and running a qualifying business or enterprise. Such visas can initially be granted for any period up to five years, during which time the visa holder can travel freely into and out of the United States. E-2 visas can be renewed indefinitely, so long as there is still a need to manage and direct the underlying business. 

However, Indian nationals are not currently eligible for E-2 visas. Only countries with trade and commerce treaties with the United States can pursue this option and India and the United States do not currently have such a treaty in place. Nevertheless, the two countries have a long history of close economic ties, and the United States has just granted India Strategic Trade Authorization-1 (STA-1) status. This has eased controls on India’s defense and high technology exports. It is therefore possible that the two countries could negotiate an E-2 treaty in future, under which Americans would need to be grated reciprocal access to India. 

In the meantime, we have still managed to help our Indian clients secure E-2 visas. An increasing number of Indians are interested in “citizenship by investment” schemes operated by a range of countries around the world. For example, Davies & Associates has a well-established presence in Grenada, which offers a whole range of benefits, including a stable investment environment and a passport that has visa free access to 127 nations worldwide. Grenadian citizens are also eligible for E-2 visas, and we have assisted a number of clients with securing E-2 visas after they have become citizens of Grenada. 

The E-2 visa is cheaper than the EB-5 with shorter processing times, which means that many clients choose to combine an EB-5 with an E-2 visa. E-2 processing times can be as little as one month and can cost around $100,000.00 depending on the business being developed. Pursuing an E-2 visa allows clients to live and work in the United States whilst their EB-5 application is being processed. The Grenadian authorities are also very efficient and the processing time for the Grenada Citizenship by Investment Programme is less than three months. This programme requires a $150,000 donation to Grenada’s National Transformation Fund or a $350,000 investment in real estate offers the possibility of Grenadian citizenship. 

Another possibility is the L-1 visa, which allows an Indian investor to expand their existing business into the United States. If a person has owned a business that they have worked at for more than one year, they may be able to obtain an L-1 non-immigrant visa by opening a branch in the United States. It is vital to have a carefully prepared business plan and to have an understanding of the complex tax and other reporting requirements. Indian consultants and advisors are not authorized by the United States government to give immigration advice. It is vital that clients engage a licensed US immigration lawyer to increase their chances of submitting a successful application. After one year, an L-1 visa-holder may be able to apply for a green card as an international manager or executive through the EB1-C program.

 

So the high-rejection rate and uncertainty surrounding the H1-B visa program need not spell the end of an applicant’s American dream. The key is to find a competent and experienced immigration attorney who will work closely with an applicant to find the most appropriate solution to keep their dream alive. 


Why the E-2 Treaty Investor Visa is the Next Best Thing to a Green Card

Verdie Atienza

By Verdie Atienza,Head of E-2 visas & Philippines Practice Group, Davies & Associates LLC,
Verdie Atienza leads the L1/E2 team at Davies & Associates. He is dual qualified to practice law in Philippines and the United States. As an immigrant to the United States, Verdie handled his own adjustment of status application and retains a strong interest in all kinds of immigration issues.

 

The E-2 nonimmigrant classification permits a national of a treaty country (a country with which the United States maintains a treaty of commerce and navigation) to be admitted to the United States when investing a substantial amount of capital in a U.S. business. Certain employees of such a person or of a qualifying organization may also be eligible for this classification.

You may follow the link below to check the list of the treaty countries:

https://travel.state.gov/content/travel/en/us-visas/visa-information-resources/fees/treaty.html

To qualify for E-2 classification, the treaty investor must:

  • Be a national of a country with which the United States maintains a treaty of commerce and navigation
  • Have invested, or be actively in the process of investing, a substantial amount of capital in a bona fide enterprise in the United States
  • Be seeking to enter the United States solely to develop and direct the investment enterprise. This is established by showing at least 50% ownership of the enterprise or possession of operational control through a managerial position or other corporate device.

Below are the specific reasons why the E-2 Treaty Investor Visa may be the next best thing to a green card:

1.Quick Processing Times

If one already in the U.S. on another lawful non-immigrant status, there is an option to apply to change status to E-2. The Treaty Investor applicant may choose premium processing by paying an additional fee of $1,410. With premium processing, USCIS will adjudicate the application within 15 days.

On the other hand, if one is outside the U.S., consular processing is the way to go. Processing time varies with every Embassy or Consulate. It usually takes the E-2 Consular Section around two weeks to a little over a month to review the E-2 visa application before they schedule the appointment for interview. 

2.Relatively Less Capital Investment Needed

There is no minimum capital investment required but the investment amount must be logical and reasonable in relation to the nature of the business. In general, we recommend an investment of at least $100,000. The investment amount varies depending on the nature of the business. A service-oriented business like a consulting company will require less capitalization as compared to a full-service real estate company which will require more than $100,000. 

3.Funds to be Invested may come from various sources

The funds to be invested should be the personal funds of the applicant. The funds may come from employment or business income or from the sale of property. The funds may also be from a loan provided it is not secured by the E-2 enterprise or its assets. 

Interestingly, the funds may also be gifted to the applicant. If the applicant, does not have enough personal funds, relatives and even friends may gift additional funds to the applicant.

4.Control of Investment Funds and the Treaty Enterprise

The treaty investor applicant will come to the US to develop and direct the enterprise. Essentially, the applicant has discretion as to how he wants to spend start-up funds or working capital for the success of the enterprise. The applicant is responsible for making all business decisions to ensure that the enterprise will be a success.

5.You may opt for a franchise

It can be challenging to make start-up company a success. With the franchise option, the applicant has all kinds of support from the franchisor to make sure that the E-2 enterprise will meet its targets and generate revenues and employment. There are numerous franchise opportunities in the US that are suitable for the E-2 visa that do not cost a fortune.

6.Dependents are entitled to E-2 derivative visas

The spouse and dependent children of the treaty investor applicant qualify for E-2 derivative visas should the application be approved. With the derivative visa, the spouse may apply for Employment Authorization Document and work for any employer in the US while the children are permitted to study in American public schools.

7.Flexibility with Travel

Since the E-2 visa is a non-immigrant visa, there is no requirement to establish residence or domicile in the US. The applicant is free to travel for as long as the E-2 visa is valid. This is an important advantage especially for individuals who have businesses in various parts of the world.

8.Potential Tax Advantages 

Depending on the duration of stay in the US, the treaty investor applicant may potentially be classified as a non-resident and therefore not be liable for tax on worldwide income. Consultation and tax planning is highly recommended especially for high net worth individuals who choose to apply for the E-2 visa.

9.Relatively Low Legal Cost

The legal and filing fees to obtain an E-2 visa are significantly less than legal and filing fees for other visa categories like the EB-5 visa or the Immigrant Investor Program. Our firm offers a fixed fee so the applicant has the assurance that he or she will not pay exorbitant legal fees.