Investors who wish to acquire permanent residence in the United States may seek such status by applying to the United States Citizenship and Immigration Services agency (“USCIS”) for a foreign investor visa. The U.S. Congress created this immigrant visa category (EB-5) to benefit the U.S. economy by providing an incentive for foreign capital investment in commercial enterprises that create or preserve U.S. jobs. Through this process, immigrant investors and particular family members receive conditional permanent resident status for a 2-year-period. As long as certain requirements are adhered to, USCIS will remove the conditions and the immigrants become lawful permanent residents (LPRs) of the United States without conditions.
The Immigration and Nationality Act authorizes the issuance of these visas to immigrant investors who have invested or are actively in the process of investing in a new commercial enterprise and satisfy the applicable job requirements. While it is important to hire an attorney experienced in foreign investor visa applications, it is probably of equal importance to create a relationship with a financial advisor that is familiar with U.S. capital markets. Many foreign investors likely already count on the support of such a professional, but this post will offer guidance on how to locate a financial advisor that has been granted licensure by U.S. regulators. A financial advisor familiar with U.S. capital markets will be able to weigh in on the investment that supports the foreign investor’s visa application, providing valuable advice and recommendations. This is crucial because the visa process requires that the investor’s capital be valued at fair market value in U.S. dollars, in accordance with Generally Accepted Accounting Principles or other standard accounting practice adopted by the U.S. Securities and Exchange Commission, at the time the capital is invested.
The same financial advisor will likely also be able to manage the investment of other assets for the foreign investor and their family members, that will have nothing to do with the visa’s underlying investment. As an example, let’s say that the investor decides to invest $1,050,000 (the standard minimum investment amount) to qualify for the immigrant visa and in this example, our investor was fortunate enough to be granted the visa. In turn, our imaginary investor and his/her/they family members also received conditional permanent resident status. At this stage, the investor and their family have overcome the waiting period of uncertainty so they feel confident that they will be residing in the U.S. for the long term. The investor may have different objectives now that they live in the U.S.. Their cost of living may have changed depending on their locality. They will consider their state’s income tax, if applicable. Now it would make sense to also meet with their financial advisor to seek advice and to plan for the future in light of their new circumstances.
I am going to briefly discuss how the foreign investor can locate financial advisors that have been granted licensure by U.S. regulators. In the U.S., there are financial advisor firms that are either registered with their state securities division or with the U.S. Securities and Exchange Commission (the “SEC”), which is a federal agency. There is much more to that, which I will elaborate on in future notes. Financial advisor firms are actually referred to as registered investment advisers (RIA) by the SEC. The individual financial advisory personnel that provide clients with investment advice are referred to as investment adviser representatives (IAR). Think RIA as the entity and IAR as the advisory personnel. An investor can visit the Investment Adviser Public Disclosure Webpage to locate an investment adviser that provides the type of advice they are looking for. By conducting the search by locality, all of the RIA firms located in that locale will appear. Click on one of them and search the page that follows for “Part 2 Brochures”. Click on “Part 2 Brochures” and locate Form ADV Part 2A. This is a brochure that discusses the parameters of the RIA’s business model. For now, skim Item 4 of the Form ADV Part 2A Brochure (Advisory Business) to determine if that particular RIA offers the services you are looking for. If they do, now is time to look into the particular education and background of the investment adviser representatives employed at the RIA, which can be found in Form Form ADV Part 2B for each IAR. Most IARs have passed the Series 65 examination or they have a credential that their state accepted in lieu of examination. I will elaborate on this further in future notes, but keep in mind that some IARs may not have a Series 65 if the RIA firm they work for, or manage, is a Non-U.S. adviser registered with the SEC and not registered (or notice filed) with any individual state. This is because the SEC does not regulate investment adviser representatives. The states do.
Investors that apply for a foreign investor visa (EB-5) would benefit from the advice of an investment adviser while they plan the underlying investment in support of their visa application. Their personal investment strategy would also benefit from this relationship. The investor likely already has a vetted financial advisor, but it wouldn’t hurt to add an RIA to their team of consultants.