GREAT 39 IDEA: EB-5 Visas for Foreign Investors

Did you know that foreign investors with at least $500,000 cash can “buy” themselves a green card? It's true. Under the EB-5 visa program, foreign investors with a minimum of $500,000 to invest in an area experiencing high unemployment can invest in an American business as long as they create at least 10 fulltime jobs.

“These (foreign) investments are creating jobs for qualified U.S. workers,” said Lara Baharlo, an associate at the Global Law Group in Los Angeles, which handles dozens of these visa applications a year.

The investment visa program is not without controversy. In fact, several consultants who make these lucrative matches declined to be interviewed. One West Coast business owner, who explained in detail how he attracted $1 million from a Chinese investor and then sold his company two years later to a big German firm, called me back in a panic and begged me not to use his quotes in this book. I agreed, but I still wonder why people are so reluctant to discuss this novel way to attract foreign investment.

On the positive side, the immigration visa process is highly regulated and managed by the federal government, through the U.S. Immigration and Customs Enforcement agency (ICE). U.S. business owners must submit their proposals for federal approval before they can seek investors.

“There are 114 regional centers, which can be found on the immigration service web site,” said Baharlo.

At the other end of the deal, wealthy foreign investors must apply for a green card, which initially grants them residency for two and a half years. If all goes well and the jobs they create are real, they can apply for a 10-year permanent residency card.

Foreign investors, mostly from China, are taking full advantage of these investment visas, according to Baharlo.

It's no surprise that China is the number one source of investors. “Investors and business owners work with a network of immigration visa brokers in China,” explained Baharlo. “The investors go to a ‘dog and pony’ show to find U.S. companies to invest in.”

Most of the companies seeking foreign investment are privately held, mostly involved in retail, manufacturing, hotels, and light industrial.

Not all companies receiving foreign funds are so profitable. Most have profit margins around 2 percent. Still, hundreds of foreign investors are still motivated to fast-track their way to the American dream.

“It's a win-win situation because the investors are creating jobs in America,” said Baharlo.