What is EB-5?
EB-5, also known as Employment Based Fifth Preference, is a class of United States immigrant visa. As with all U.S. visas, this visa category and the processes associated with it are overseen by the United States Department of Homeland Security division of United States Citizenship and Immigration Services (USCIS). This specific visa class was created in 1990 with the goal of attracting foreign capital investment to stimulate job creation and economic growth in the United States. EB-5 investors must invest at least $1 million in a new commercial enterprise or in a troubled business in order to create or preserve at least ten full-time American jobs within a two-year period. This two-year period begins with the approval of an I-526 application by USCIS. During this period the investor receives a conditional green card. After two years, the investor becomes eligible to submit an I-829 application for removal of conditions placed upon their green card during the 2-year probationary period.
The Immigrant Investor Pilot Program was created October 6th, 1992 by Section 610 of Public Law 102-395. The Pilot Program began in accordance with a Congressional mandate aimed at stimulating economic activity and creating jobs for U.S. workers, while simultaneously affording eligible aliens the opportunity to become lawful permanent residents. What the pilot program adds to the original EB-5 legislation from 1990 is the concept of a Regional Center. According to USCIS, a Regional Center is defined as “any economic entity, public or private, which is involved with the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.” Regional Center investors enjoy the benefits and flexibility of including “indirect job-creation” to count toward the fulfillment of their requirements to obtain a permanent green card. An important advantage to obtaining Regional Center designation is the indirect nature of the job creation, which is less difficult to achieve than the direct creation of 10 new jobs. The requirement of creating at least 10 new full-time jobs may be satisfied by showing that, as a result of the investment and the activities of the new enterprise, at least 10 jobs will be created indirectly through an employment creation multiplier effect. Additionally, investors investing in a Regional Center need not manage their investment themselves and instead can take advantage of jobs created by the Regional Center. These are counted proportionally towards each investor’s ten-job investment target. After the requisite two-year period has ended and the requisite number of jobs has been created by the Regional Center, the conditions placed upon the investor’s green card can be removed allowing them to achieve permanent resident status in the U.S.
The Targeted Employment Area (TEA)
Investors applying for an EB-5 visa through a designated Regional Center that is also located in a Targeted Employment Area (TEA) need only invest $500,000 instead of the normal $1 million if the investment were to be made outside of a TEA. A TEA is a geographic area or political subdivision with higher than average need for jobs. A TEA can be located within a high unemployment urban area or within a rural area. High Unemployment Area TEAs are located in a metropolitan statistical area (MSA) or within a city or town with a population in excess of 20,000. This city, town or MSA must have an unemployment level equal to at least 150% of the national unemployment rate to qualify as a TEA. A Rural Area (RA) is a geographical area that is outside a metropolitan statistical area, or part of the outer boundary of any city or town having a population of 20,000 or less as shown by population indicators. In order to encourage the application of EB-5 capital to these areas of increased need, investors who participate in projects that are within a TEA are only required to invest half the normal amount. TEAs within a state are identified and designated by the governor (and for a TEA within the District of Columbia, designation is made by the Mayor). Typically a Regional Center seeks to encompass one or more TEAs.
The Midwest EB-5 Regional Center (MERC) was established in March of 2010 with the interest of serving the Greater Cincinnati metropolitan area of Southwest Ohio and Northern Kentucky. MERC currently is approved to work in seven counties, including Boone, Kenton and Campbell Counties in the Commonwealth of Kentucky, as well as Hamilton, Butler, Warren and Clermont Counties in the State of Ohio. The Midwest EB-5 Regional Center has an approved Target Employment Area (See “Overview”) in Hamilton County within the Cincinnati city limits. In the future, the Regional Center plans to expand its scope to work in other counties and Target Employment Areas through out the Midwest Region.
The Midwest EB-5 Regional Center is currently approved by USCIS to create projects across nine different industry categories. The industry categories that MERC may fund projects for are:
- Retail Stores
- Condominiums and Apartments
- Office Buildings
- Light Industrial/ Warehouse
- Continuing Care and Retirement Communities
- Mixed Use Condominium/ Apartment and Retail Store
- Mixed Use Retail Store and Office
America 101 Program:
The Midwest EB-5 Regional Center continues to serve clients beyond the green card process. MERC is committed to ensuring that our clients have a smooth transition to life in the United States. We understand that each family immigrating to the US is different, with unique needs. In America 101, we work with each family according to their needs to help find a home, schools, legal and financial services in order to provide peace of mind when moving to a new place.
Direct Job Creation:
While indirect job creation is important and a key benefit of investing in a Regional Center, MERC focuses on creating direct jobs. We are committed to providing our investors the safety and security of direct job creation.
Our Regional Center has a wide range of partners in both local and state government, regional research and higher education institutions, medical and healthcare institutions, venture capital, and multi-national corporations.
The Midwest EB-5 Regional Center participates in several different classes of projects:
1. Signature Projects
- At any given time MERC is engaged in deploying our unique cluster concept at one or two signature project-sites
2. Direct Investment Projects
- Direct venture investment into promising companies
3. Co-Investment Projects
- We also participate actively in syndicated and or collaborative investment opportunities
Terry Chan is one of the founders and the president of the Midwest EB-5 Regional Center. Terry is responsible for guiding the team in selection and structuring of projects, selection of investment partners, and overall operations.
While ramping up operations at the Midwest EB-5 Regional Center, Terry was also one of the core team members at CincyTech USA, a public-private partnership whose mission is to provide services for high-growth startup technology companies in Southwest Ohio. CincyTech does this through management assistance, seed-capital investments and connections to partners who share a common mission. In his capacity at CincyTech, Terry was part of a team that has driven over $10 million in 30 companies and syndicated over $100 million. Those 30 companies have created over 200 direct jobs and over 500 indirect and induced jobs from the $10 million invested. Terry Chan brings his job creation expertise to the project, where he is responsible for tenant selection and managing and ensuring job creation.
Prior to arriving in Cincinnati, Terry was a manager in the commercial finance and information technology divisions at General Electric. In that role, he was responsible for working with the commercial teams to maximize margins across a diverse product portfolio. Terry received his masters and bachelors degrees in finance and information systems management from Carnegie Mellon University and attended high school at the Hong Kong International School.
Gary Chan is an American businessman of Chinese descent. He has spent significant time in the United States (LA, New York, Portland, Cincinnati, and Pittsburgh) and China (Hong Kong, Beijing) and has established a vast network in these and many other locations. Gary has established the America 101 program to help investors in the program acclimate to life in the US. Gary and his team help clients adjust to American life in both personal and business aspects.
Prior to joining the team, Gary spent time with JPMorgan Chase in their Equities Division and with General Electric in their Leadership Development Program. The General Electric program is a diverse program made up of participants from around the world and is intended to train future leaders within the company. Gary received his masters and bachelors degrees from Carnegie Mellon University and attended the Hong Kong International School.