EB-5 PROVIDING A RETURN ON YOUR EDUCATIONAL INVESTMENT

Studying in the US could form part of an integrated investment strategy for EB-5 investor parents, on behalf of their children, to provide them with quality education, US residency and a better future.

An education alone does not secure your future

It is a common scene on the streets of South Africa – at any given intersection with malfunctioning traffic lights – to find a university graduate with a heart-wrenching message, scrawled in desperation, on a piece of worn-out cardboard: ‘I have a degree. I can’t find work. Please help. Any work will do.’

For every one of those unemployed, but qualified, young people, there are desperate parents who invested a lot of time, emotion and money, and planned a prosperous future, together with their child. Only to be faced with the escalating cost of an investment that is not giving a return, because of ‘circumstances’.

You cannot always guard against the future, nor can you resist the turning of the economic tide. You can however look for different options, and look to invest where there is a more likely chance of a return on your investments… including providing a solid education for your children.

Get a degree in the US?

Approximately 1.1 million of the 4.6 million foreign students enrolled worldwide, studies in the United States. The United States is the top destination for international students because of the quality of their education system, hospitable culture, and relatively open labour market.

All the students to who study there though do not share the same privileges as US residents though. The costs of studying in the states can be prohibitive and a student on an F-1 Visa, faces huge challenges in finding employment and living in the US after studying. You do not want to come and stand on a street corner, back home, with a degree from a US university either. That is why it would be wise to look at an EB-5 investment in the US, for your family.

Why EB-5

Congress created the EB-5 programme in 1990, to stimulate the U.S. economy, through job creation and capital investment by immigrant investors. It allows foreign nationals, their spouses and unmarried children, under age 21, the ability to obtain a U.S. visa based on a minimum investment in a for-profit, at-risk enterprise, with the objective to create or retain a specified number of jobs in the U.S.

The minimum investment amount is $1,800,000. However, if the investment is made in a designated area targeted for investment, referred to as Targeted Employment Areas, the minimum amount is $900,000. These TEAs, as they are known, are usually areas with high unemployment rates or situated in rural areas.

With an EB-5 investment, you and your qualifying family members to live and work anywhere in the US and can enjoy many of the benefits of residents, especially around education. The EB-5 investment programme offers a number of benefits that are specific to international students – so even if parents don’t want to move overseas, this may still be the best visa option for your children.

The two main benefits of studying in the US with an EB-5 Visa

  1. Costs:

On average, a resident – compared to a non-resident – can save at least 45% of the cost of attending college because they can qualify as in-state residents at public universities and also benefit from higher acceptance rates (for residents) into universities. The savings on tuition alone could help pay towards the cost of the EB-5 investment, as part of an integrated investment strategy for the entire family…especially if you have more than one child, that you would like to send to university.

  1. Finding employment:

Job searching in America can be extremely difficult for non-residents. As mentioned, after graduation, an international student on the F1 Visa has three months to find a job and register themselves with the United States Citizenship and Immigration Services. If the graduate isn’t able to find a job within that three-month period, they will need to leave the country.

With the EB-5 visa, students applying for jobs post-graduation, are treated as US residents and do not face any of these difficulties. They can pursue any job in any field, and don’t need to apply for any additional visas or work permits, which makes them more attractive candidates in the eyes of US employers.

Current and future international students benefits from EB-5

The benefits to future students are clear but even current international students in the US could also benefit greatly from the EB-5 Visa. It is a great way to get to stay and work in the US after graduation.  This is proven by research that has shown that about 70-80% of investor parents use the EB-5 programme to enable their children to study abroad and gain residency in the US. With an EB-5 Visa, students do not need any particular company to sponsor them or give them a job offer after graduation, unlike the F-1 and E-2 types, which are in reality non-immigrant visas, with expiry dates. The EB-5 Visa is also not lottery based, such as the H-1B visa and clearly the better option for high-net-worth individuals looking for integrated investment solutions.

American Dream led the way in introducing the EB-5 Programme in South Africa. We distinguish ourselves by having a full-time presence in South Africa and are able to support our South African clients with a capable team of legal and financial experts, who will assist investors through every aspect of their emigration journey.

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