EB-5 is a United States immigration program that offers citizens of other countries the opportunity to seek permanent U.S. residency through job creation in the U.S.
The EB-5 Regional Center Program began in the early 1990’s to spur economic growth by giving immigrants a way to obtain permanent U.S. residency through job creation. Administered by the United States Citizenship and Immigration Services (USCIS), the EB-5 program directs foreign investment into projects that revitalize local economies; investors whose money creates at least 10 full-time jobs for U.S. workers become eligible for a U.S. green card. Regional Centers, designated by the U.S. government, promote job creation in a defined geographic area.
EB-5 for Investors
The EB-5 program enables an investor to immigrate to the United States and receive permanent resident status (a “green card”) in as little as eighteen months.
An immigrant must invest capital in a new or existing firm, or regional center enterprise using earned, borrowed, or gifted funds. The minimum investment is $500,000 (soon to be $800,000) if the firm principally does business in a “targeted” employment area, or $1 million (soon to be $1.2 million) in other areas. The investment must create or save ten jobs.
The EB-5 green card program allows investors to live anywhere in the United States while enjoying retirement, attending school, or running the enterprise in which they invest or another business.
Below is a more detailed discussion of this way to immigrate to the United States.
Persons seeking visas under the immigrant investor provisions must first file with U.S. Citizenship & Immigration Services a Form I-526, Immigrant Petition by Alien Entrepreneur, together with the required supporting documentation. Each investor is assigned a priority date under the visa quota system based on the date the petition is filed. After approval of the petition by USCIS and upon availability of a visa under the immigrant visa quota system, qualified investors and their accompanying family members (spouses and unmarried children under 21 years old) may apply for their immigrant visas at a U.S. embassy or consulate in their country of citizenship or residence abroad. An eligible person in the U.S. may apply for permanent resident status with U.S. Citizenship and Immigration Services.
Source of Funds
To deter the use of illegally acquired funds to obtain U.S. immigrant status, the EB-5 regulations require the investor to submit documentation clearly showing that the capital invested in the enterprise derives from a lawful source. The invested capital must be the personal funds of the investor, as opposed to funds belonging to a third person or a business entity owned by the investor.
An investor may have acquired his or her investment capital in any lawful manner. The funds may have been acquired as personal income in the form of wages, distributed profits or earnings from a business or other investment, proceeds received for the sale of a valuable asset owned by the investor, a loan secured by personal assets owned by the investor, or a gift or inheritance. The funds may not be derived, however, from a loan secured by the assets of the qualifying U.S. enterprise. In the case of funds received as a gift or loan from a third party, documentation must be submitted to prove the lawful manner in which the benefactor or lender acquired the funds.
Direct v. Regional Center Investment
Under the basic EB-5 program, which predates the Pilot Program, an EB-5 investor may choose to invest in an enterprise that is not doing business as or operating under the auspices of a designated regional center.
An investment in a standalone project must create at least ten new full-time positions for directly employed U.S. workers within two years of the investor’s immigration to the United States. For standalone investors, indirect jobs, including the jobs of independent contractors, may not be counted. If the ten employees have not been hired at the time of filing the I-526 petition, the petition must be accompanied by a comprehensive business plan showing that ten qualified employees will be hired within two years.
The job creation requirement may also be satisfied through an investment in a “troubled business” that results in saving or creating at least 10 full-time jobs for U.S. workers and the retention of jobs for at least two years at a level no less than the number of employees prior to the investment. A “troubled business” is one that has been in existence for at least two years and has had a net loss of at least 20% of the business’s net worth.
The minimum investment amount for a standalone project is determined in the same manner as for an investment in a regional center project – $500,000 where the job creating enterprise is primarily doing business in a “targeted employment area” (“TEA”) and $1,000,000 for non-TEA investments.
Management Role of the Investor
In both standalone and regional center investments, it must be shown that the investor will be engaged in the management of the new commercial enterprise, either through the exercise of day-to-day managerial control or through policy formulation (as opposed to maintaining a purely passive role). Under USCIS regulations, if the investor is a corporate officer or director or a limited partner in a partnership that provides the investor with rights, powers, and duties normally granted to limited partners, he or she will be considered sufficiently engaged in the management of the new commercial enterprise.
Removal of Conditions
Under the EB-5 provisions, an investor and his family dependents are initially granted LPR status on a conditional basis. During the three-month window prior to the second anniversary of becoming a conditional resident, the investor will need to file a Form I-829, Petition to Remove Conditions. Documents submitted with the I-829 petition must show that the required capital was invested as planned, the investment was maintained throughout the two years, and the enterprise has satisfied the job-creation requirements of the law. I-829 adjudication times typically run from six months to one year.
Grounds of Inadmissibility
Like all prospective immigrants to the United States, EB-5 immigrants must answer a list of questions bearing on the numerous grounds of inadmissibility under U.S. law and must undergo background checks and a medical examination. Grounds of inadmissibility include criminal arrests or convictions, visa-status violations, and membership in certain political organizations.