The employment-based fifth preference immigrant visa classification, otherwise known as EB-5, allows aliens to receive US permanent residence (i.e. receive a "green card") through qualifying investments in the US. These investments must benefit the US economy, and also must generally create (or in some cases, maintain) employment in a specified area. The regulations and requirements are complex and can be confusing. Part of this confusion may lie in the numerous combinations and possibilities regarding EB-5 investment. To help clear up this confusion, here are the main decisions that an investor might have to make: Decision 1: Investment in a "targeted employment area" (TEA) or elsewhere? When people here about this method of getting a green card, they invariably first ask, "How much must I invest?" The answer depends on where the investment will occur. If it occurs in a TEA, the minimum investment is US$500,000. If it occurs anywhere else, the minimum investment is US $1 million. The regulations in this area define a TEA as being an area that either is "rural," or else has an unemployment rate that is at least 150% of the national average. The regulations, in addition, allow the government to specify a separate investment threshold for investments in "high employment areas." This threshold can be as high as US$3 million. However, at this writing, the government has not implemented this third threshold. Therefore, an investor has at least two options regarding an investment. It can occur in a TEA or it can occur in a non-TEA, i.e. anywhere else. Decision 2: Direct investment or a Regional Center investment? The next decision an investor must make is that of making a direct investment (that is, an investment that the investor himself will manage and control, such as in his or her own business), or making an investment in a Regional Center. When the EB-5 visa option began, the option an investor had was a direct investment, i.e. a "do it yourself" investment. That is, the investor, on his or her own, had to find an investment opportunity on his or her own, then had to have day to day involvement with that opportunity. Furthermore, unless the investment involved a "troubled enterprise" (see below), that investment had to have, as its direct result, at least 10 full time jobs. For example, if the investment was a new restaurant, then that restaurant had to result in the creation of at least 10 full time jobs. They had to be jobs associated with the restaurant, not jobs associated for example with companies that supplied goods and services to that restaurant. This requirement made the process more difficult. As a result, therefore, Congress established the Immigrant Investor Pilot Program in 1992. This program has been renewed several times and currently will expire (unless extended again) in September 2012. Under this program, investors interested in an EB-5 visa may invest in ways other than a direct "do it yourself" investment. They may also invest through a special entity known as a Regional Center. Such entities, under federal regulations, are approved by the U.S. Citizenship and Immigration Services (USCIS) and are involved in "the promotion of economic growth, including increased export sales, improved regional productivity, job creation, and increased domestic capital investment." Under this arrangement, the investor would send an investment to the Regional Center, and also apply to invest in a project managed by that Regional Center. The regulations ease the requirements for EB-5 visas when an investor deals with a Regional Center, as opposed to doing an investment on his or her own. Specifically, the "10 job" requirement can be met by counting not only direct jobs, as under the "on your own" EB-5 method, but also by counting INDIRECT jobs as well. Therefore, for example, if a Regional Center investment project hires only six full time employees, but the investment project causes businesses nearby to hire four full-time employees of their own, then the "10-job" requirement is nonetheless met. Therefore, an investor theoretically has at least four options regarding an investment. That investment can occur via - direct investment in a TEA - direct investment in a non-TEA - Regional Center investment in a TEA - Regional Center investment in a non-TEA Note that different Regional Centers may have different policies regarding the location of their investments. For example, a Regional Center is free to decide to invest ONLY in TEAs. Therefore, that Regional Center truthfully could say that any investment with them need be only for $500,000. However, note that the "only $500,000" feature is based on the TEA nature of the investments, NOT directly the Regional Center nature of the investments. Also, note that typically, the "Regional Center vs. direct investment" is usually the first decision, not the second. However, presenting the decisions in the reverse order helps explain the concepts more easily. Decision 3: Investment in a "new commercial enterprise" or in a "troubled enterprise"? An investment, regardless of whether direct or Regional Center, or whether in a TEA or non-TEA, can occur with respect to one of two types of enterprise: either through establishment of a "new commercial enterprise" or in a "troubled enterprise." Creation of a new commercial enterprise, for purposes of EB-5, can be the creation of a new business, or the purchase of an existing business such that a restructuring or reorganizing results in a new enterprise, or an expansion of an existing business such that a "substantial change" in net worth of number of employees results. Investment in a new commercial enterprise requires the creation of at least 10 full time jobs. A "troubled enterprise" is one that has existed for at least two years, and which also has had losses for the past two years of at least 20% of the net worth of the business. An investment in a troubled enterprise does not require the creation of at least 10 full time jobs. Rather, it requires that existing employment levels (which previously must be at least 10 jobs) be maintained for two years. Because the EB-5 investment process involves these three decisions and because each decision has two alternatives, the total number of theoretical possibilities is 2x2x2 = 8. These possibilities are Direct investment in a TEA in a troubled enterprise ($500,000 to maintain 10 jobs) Direct investment in a TEA in a new commercial enterprise ($500,000 to create 10 direct jobs) Direct investment in a non-TEA in a troubled enterprise ($1 million to maintain 10 jobs) Direct investment in a non-TEA in a new commercial enterprise ($1 million to create 10 direct jobs) Regional Center investment in a TEA in a troubled enterprise ($500,000 to maintain 10 jobs) Regional Center investment in a TEA in a new commercial enterprise ($500,000 to create 10 direct or indirect jobs) Regional Center investment in a non-TEA in a troubled enterprise ($1 million to maintain 10 jobs) Regional Center investment in a non-TEA in a new commercial enterprise ($1 million to create 10 direct or indirect jobs) Note that not all possibilities might truly exist. A Regional Center might choose to avoid investing in a non-TEA or might choose to avoid investing in a troubled enterprise. However, understanding all the possibilities is important to making a wise decision.