by Phuong Le, Esq., Partner, KLD, LLP & Eric Dominguez, Esq., Partner, KLD, LLP
In the past few years, the EB-5 industry has begun to explore the intersection of global Citizenship By Investment Programs (“CBI”) and U.S. investment programs, such as E-2 and EB-5, to create a new hybrid investment and immigration vehicle to the U.S. This approach has gained traction recently due to longer USCIS processing times and EB-5 visa backlog because it provides a short-term and long-term immigration strategy. This article addresses background information on the programs, explores sample case studies of a CBI/E-2/EB-5 conversion, and finishes with closing thoughts and insights that should be considered as part of the investment structuring and immigration planning process.
A New Investment & Immigration Vehicle
Anyone attending investment seminars or conferences during recent years will have undoubtedly noticed other countries vying for the same investors and High Net Worth Individuals (“HNWI”) as the E-2 and EB-5 programs, including Grenada, Turkey, Malta, Australia, Portugal, and Canada.
As some savvier agents and professionals have discovered, some CBI programs may actually work in conjunction with the E-2/EB-5 programs. Namely, investors from backlogged countries can invest in a country with a qualifying Trade (E-1) or Investor (E-2) Treaty to acquire a second citizenship and subsequently use that citizenship as a bridge to enter the U.S. on an E-2 visa. The holy grail of course, is being able to successfully convert the E-2 investment into a qualifying EB-5 visa to permanent residency in the U.S. The interplay between E-2 and EB-5 programs is especially relevant given the increasing popularity of other countries raising capital through their own CBI programs. Thus, we now have a new roadmap to the U.S. which is illustrated below:
Although it sounds good in theory, in our experience, most migration agents or professionals have focused on the CBI portion of the process, instead of laying out a possible 5-to-7-year roadmap that incorporates the E-2 and EB-5 investment portions of the investor’s journey, including potentially requiring investors to not just fund the initial E-2 investment, but potentially $900K to $1.8M to qualify for EB-5.
As we discuss in more detail below, a major roadblock is after the passport for the qualifying E-2 country is acquired, not many migration agents or professionals have identified or structured a business investment that will satisfy both E-2 and EB-5 components (after all, as beautiful as Grenada may be, most journeys do not end there). Done correctly, it is possible to engineer an alternative (and possibly quicker) path to the U.S. and ultimately attain a green card by combining CBI and E-2/EB-5 programs, but it requires careful planning from the beginning…CONTINUE READING