Source: https://johnloganfund.com/2011/05/eb-5-investor-visa-u-s-tax-issues/
Timestamp: 2019-12-13 20:54:09
Document Index: 570725854

Matched Legal Cases: ['§2104', '§20', '§2106', '§2106', '§2106', '§2106', '§1014', '§2503', '§25', '§2522']

EB-5 Investor Visa (U.S. Tax Issues) | Financial Resource
Co-authored by Jordan L. Eftekari, Esq.
On November 2, 2007, the Wall Street Journal published an article: “Got 0,000? The U.S. Awaits (Government’s EB-5 Program Offers Foreign Investors Green Cards for Job Creation)”.
A Federal program known as EB-5 (Immigrant-Investor Visa), administered by the U.S. Citizenship & Immigration Services (“USCIS”), encourages foreign investors to invest their way to living in the U.S.A.
Morrie Berez, chief of the EB-5 program at USCIS, stated: “The opportunity is truly beautiful to individuals who want to live and contribute their energy in the United States, and it creates economic growth and especially jobs for Americans.”
An investor (and immediate family) can now obtain green cards (Permanent US Residency) with an EB-5 Visa by investing 0,000 into a Government approved Regional Center (currently, over 30 Regional Centers). Investors receive the security of permanent US residence without repeated visa applications. Citizenship may be obtained after five years.
Invest ,000,000 into a business and hire ten employees anywhere in the USA, or Invest 0,000 and hire ten employees in an area where the unemployment rate exceeds the national average by 150% or the rural population is less than 20,000, or Invest 0,000 into a Government designated Regional Center and avoid direct employment.
The 0,000 investment is the least expensive way to satisfy the visa requirements in order to receive the permanent green card after the two-year period. Although the first two types of investment lead to permanent green card status, they require an additional showing that at the end of the two year period, ten qualified individuals have maintained jobs in the targeted employment area.
The minimum period of the investment is approximately three years. Once an investor emigrates they may apply to have ‘conditions’ removed after 1 year and 9 months in the USA. Processing takes up to six months. ‘Conditions removal’ means that the investment is no longer tied to the EB5, and the investor is then free to sell the investment.
,000,000 0,000 (in a targeted unemployment area)
Between 1993 and 1998 several companies were designated as regional centers. These companies all competed for foreign capital from the foreign investors involved in the EB-5 Visa program. The competition that existed for the foreign capital and the newness of the EB-5 Visa program led to abuses of the system. Most of the companies didn’t offer sound investments and were really in business to collect fees rather than to fund an ongoing business. Many investment opportunities didn’t raise the full 0,000 investment capital or hire the required number of employees.
In 2002, Congress passed a new law to protect the pre-1998 investors. Also, in 2002, in a case commonly known as “Chang” the 9th Circuit Court of Appeals ruled that CIS may not apply their new rules retroactively. In August of 2003, CIS began approving regional center and EB-5 Visa petitions for the first time since 1998.
The EB-5 Visa Program was amended in 2002 by the following statute (Pl 107-273 Sec. 11037 – 2002):
As of 2002, Investors may invest 0,000 in a regional center (in a targeted unemployment area) without the necessity of creating 10 jobs. For the 0,000 investment, an investor receives a “conditional green card.”
In January 2005, to improve and expedite EB-5 regional center related applications USCIS established an Investor and Regional Center Unit, (“IRCU”). The unit is the sole adjudicative jurisdiction for Regional Center applications pursuant to the Immigrant Investor Pilot Program for purposes of approval, denial and Requests for Evidence (RFE’s). The unit also monitors and follows up on the actions of approved Regional Centers to ensure compliance with the terms, scope, and conditions of their approval/designation relative to their approved business plans and indirect job creation methodologies. Finally, the unit develops and proposes EB-5 program, policy, and regulation changes or improvements to USCIS management.
For U.S. estate tax, both stock of a U.S. corporation (IRC §2104) and U.S. real estate (Treas Reg §20.2104-1(a)91)) are “situated” in the U.S.
Unlimited deduction for transfers to U.S. citizen spouses (IRC §2106(a)(3)). A “,000 unified credit”, which permits a non-resident alien to transfer only ,000 worth of property free of estate tax. Deduct a portion of expenses, indebtedness, taxes and losses from their gross estates (IRC §2106(a)(1)), deduct certain charitable contributions from their gross estates (IRC §2106(a)(2)(A)), but only if they disclose their world-wide estate in their estate tax return (IRC §2106(b)).
A person who acquires property from a non-resident alien decedent will receive a “stepped-up” basis in the property (i.e., a basis equal to the fair market value of the property at the date of the decedent’s death) regardless of whether the property was includible in the non-resident alien’s gross estate for estate tax purposes (IRC §1014(b)).
Non-resident aliens are subject to the generation skipping tax but only on gifts subject to gift or estate tax (e.g., no gift tax on lifetime “skips” of intangible property).
Non-resident aliens are not entitled to the unified credit (M in gifts exempt from tax).
,000 annual exclusion for gifts to any person. Unlimited exclusion for gifts to defray educational or medical expenses. The unlimited exclusion for gifts to citizen spouses. The 3,000 (2009) annual exclusion for gifts to non-citizen spouses (see: Rev Proc 2008-66, IRC §2503(b); 2503 (e), Treas Reg §25.2523(i)-(1)(a), (c)(2)). Unlimited amount of property to U.S. charity free of gift tax (IRC §2522(b)). Unlimited amount of property to a trust, or foundation, only if the gift
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