Frequently Asked Questions

In 1990, the United States Congress established the fifth employment-based (EB-5) preference category for immigrants seeking to enter the United States by enacting the Immigration and Nationality Act. The law is intended to benefit the U.S. economy by generating new economic activity and increasing employment in targeted areas.

Section 203(b)(5) of the legislation makes foreign nationals eligible for permanent residency by engaging in a commercial enterprise that will benefit the American economy and directly create at least 10 full-time jobs for U.S. citizens, lawful permanent residents, and other immigrants lawfully authorized to be employed in the United States. The minimum qualifying investment amount is $500,000 for commercial enterprises located within a rural area (or a targeted employment area), and is otherwise $1,000,000.

In the simplest terms, this means that as a foreign investor you have the choice to invest either $500,000USD or $1,000,000USD into the development of a business or project here in the United States and that as a result of your investment this business will create at least 10 jobs in the local economy. You will also now become a “limited partner” in this new business and will share in the profits of this company based on an agreed upon percentage of ownership. These investment funds must be invested into the operations of the business and the funds must be “at risk” with no form of guarantee. This is not a passive investment (such as purchasing shares of stock) however you are also not required to have day to day operations of the business either.

Congress allocates 10,000 immigrant visas annually for this employment-based preference, the EB-5 category. At least 3,000 of these visas are set aside each year for those who utilize a designated Regional Center or TEA status.

The EB-5 program does not discriminate against education, experience or does not require a sponsor. There is no requirement to speak English and the EB-5 category also allows the family (including any children under 21 years old) to be part of the process. As an EB-5 Investor you are also free to reside anywhere in the United States that you choose.

The law requires that the foreign applicant to have invested in or be in the process of investing the necessary capital into an approved EB-5 project.

Amount of capital

The basic EB-5 Visa investment amount is USD$1,000,000. However the required investment is USD$500,000 for an established business in a Targeted Employment Area (TEA) which is defined as an area with an unemployment rate of 150% or more above the U.S. national average or in a rural area (defined as being within the boundary of a city or town with a population of 20,000 or less).

Types of capital

• Investment in the EB-5 Visa program can be made in the form of cash, cash equivalents, equipment, inventory or other tangible property
• Capital does not include loans made by the investor to the venture, however the investor may borrow the investment money if it is secured by assets owned by the investor, provided the investor is personally liable for repayment of the loan
• The investor may receive a gift of funds, if all applicable taxes required by law have been paid.
  Source of capital
• When the investment is made into the respective project the USCIS is notified. The current guidelines indicate a required investment for a TEA at USD$500,000. Prospective investors are eligible to invest the required amount alone, create a qualifying business with other foreign investors and/or with a U.S. citizen or other people not seeking classification as a foreign investor. In these types of cases, all persons seeking classification as a foreign investor must have invested the required amount of USD$500,000, however each investor can use the same employees to reach the required 10 new positions

“At Risk”

The USCIS requires validation that all capital investments are classified as “at risk” with no guarantees being made by the project to the investor. This is to confirm that the capital will actually be used for the purpose of creating jobs and profit-generating activity. Proof of actual business activity is also required and the use of capital investment for expenses or reserve accounts unrelated to job creation does not constitute “business activity”

Verification of lawful source

• Proof that the capital has been invested by the actual investor is required. The documentation should trace the capital from the investor directly to the investment.
• The USCIS also requires that the investor provide documentation that proves the source of their investment funds was obtained legally. Proof of documentation is provided through previous tax returns and financial statements.

A requirement of the EB-5 visa is that each investment of either USD $1,000,000 or USD $500,000.00 must help to create jobs. If for instance the money is invested into an approved Regional Center then this project must be located in a targeted area (also known as a TEA) and must create or sustain 10 full-time jobs for US citizens, lawful permanent residents or other immigrants legally authorized to be employed in the United States.

An important advantage to investing in a project with Regional Center designation is the “indirect” nature of the job creation, which is less difficult to achieve than the “direct” creation of 10 new jobs. The requirement of creating at least 10 new full-time jobs can be satisfied by showing that as a result of the investment and the activities of the new enterprise at least 10 jobs will be created indirectly in the region through an employment creation multiplier effect. These Jobs do not have to be directly related to the project and can now include certain construction jobs during the construction phases of the project. Jobs can also be counted that were created by the investment and located in the region. Forecasting tools which support the likelihood that the business will result in increased employment may be utilized.

• A Full-time position is defined as working a minimum of thirty-five hours per week
• Two employees may share a full-time position, however part-time employment will not qualify. Therefore, a combination of two or more part-time positions will not fulfill the necessary requirement of the guidelines, even if the positions created jointly meet the 35-hour per week minimum
• The jobs must be proven to exist at time of application or there must be proof that the required jobs will be created before the end of the two-year period of Conditional Permanent Residence. If the jobs are expected to be created during the two-year period a comprehensive business plan outlining the need and purpose of the 10 new positions must be included with the investor’s application

In an effort to disuade fraud, the EB-5 Visa foreign investor, their spouse and any dependent children are subject to a Conditional Permanent Residence status for a two year probationary period. The EB-5 primary applicant is required to file a petition to remove these probationary conditions during the last 90-days of this 2 year term (prior to the second anniversary of the investor’s official admission as a permanent resident). Upon the conclusion of the two-year period, the USCIS will then examine the business investment to determine whether or not the investor has complied with all necessary requirements.

Submission of the foreign investor application to the USCIS is required to include the following:

• Verification that a new commercial enterprise has been established, such as a business license, articles of incorporation and/or evidence of transfer of initial capital investment required to purchase or invest in an existing business
• Verification that the necessary amount of capital has been placed at risk through bank statements validating deposit of funds into the business account, purchase of business equipment, transfer of property or evidence of funds transferred to the business account in exchange for shares of stock
• Proof that the capital invested was legally gained, such as foreign business registrations, tax returns or certified copies of civil or criminal judgments
• Proof that the foreign investment created the necessary 10 full-time employment positions, through tax returns, Forms 1-9 or if employees have yet to be hired a detailed business plan which demonstrates that the business will require a minimum of 10 new full time employees within two years. If the investment is made in an existing business experiencing financial difficulty, the foreign applicant must submit proof that current employment positions will be secure for at least two years

The parameters under which family members of the investor can qualify for the Conditional Permanent Residence or as a Lawful Permanent Resident are as follows:

Spouse

Spouses of the investor are permitted to accompany or follow the investor who has been granted their Conditional Permanent Residence. This is provided that the investor and their spouse who is deemed a derivative beneficiary were married at the time the investor’s original admission to the United States as a Conditional Permanent Resident or at the end of the two-year conditional period when citizenship status will adjust to Lawful Permanent Resident. It should be noted that Common Law marriages will not be recognized for the purpose of permitting a spouse to qualify as a derivative beneficiary. A relationship considered to be Common Law, will not permit the ‘spouse’ of the investor to acquire Lawful Permanent Residence on account of the status of the relationship.

Children

• Children and/or Step-Children of the investor are permitted to accompany or follow the investor who has been their Conditional Permanent Residence. This is provided that the investor can establish legitimate parent or step-parent lineage at the time of the investor’s original admission to the United States as a Conditional Permanent Resident or at the end of the two-year conditional period when citizenship status will adjust to Lawful Permanent Resident. Failure to comply with these requirements upon the initial application process may result in the separation of a child from the investor or the investor’s spouse for an extended length of time and in some cases years at a time, while alternate immigration opportunities are explored in effort to reunite the family
• The US Government considers a ‘child’ as someone who is under the age of 21 and who not married. If a child of the investor reaches the age of 21 or marries prior to admission to the US under the Conditional Permanent Residence or prior to the conclusion of the two-year conditional period when citizenship status will adjust to Lawful Permanent Residence, the former child, now considered a son or daughter, may not be eligible to accompany or follow the investor to the US. In some instances, the Child Status Protection Act may assist a son or daughter to qualify as a ‘child’ by reducing their age to less than 21 years. If the requirements of the Child Status Protection Act are not met, it may result in the separation of a child from the investor or the investor’s spouse for an extended length of time and in some cases years at a time, while alternate immigration opportunities are explored in effort to reunite the family
• Circumstances where a child who turns 21 years of age or who married while the investor is within the Conditional Permanent Resident time period and in cases where the spouse and the investor become divorced, the child or the spouse may be eligible to remove conditions by being included in the investor’s I-829 petition or by filing a separate I-829 petition. Meeting the US Government qualifying conditions may not be within the control of the child or divorced spouse. As a result, the child or divorced spouse may become involved in removal proceedings through the US courts or be required to depart the United States.
• In the unfortunate case of death to the investor holding Conditional Permanent Resident status the spouse and qualifying holding the same status are entitled to seek removal conditions by submission of the same evidence which demonstrate compliance under the same required criteria in which the investor would seek to remove conditions. Failing to establish this criteria will result in the denial of application to remove conditions, place family members in removal proceedings through the US courts and mandate immediate departure from the U.S.

The USCIS does not clearly outline if a child who becomes a son or daughter before death of the investor is entitle to request removal conditions. If it is found that the USCIS does not extend this benefit, the son or daughter would be denied application to remove conditions and would be placed in removal proceedings through the US courts and be required to depart the United States.

There are multiple avenues by which a foreign investor can attempt become a Lawful Permanent Resident of the United States. One of those ways is by using capital to stimulate economic growth. Thus helping to create creates new jobs or preserve existing jobs for US Citizens. This is most commonly referred to as the EB-5 Investor Visa

In 1990, when Congress passed Section 203(b)(5) of the Immigration and Nationality Act, the primary objective was to encourage foreign investment of capital which would create jobs and benefit the U.S. economy. As a result of this investment, foreign individuals who used capital to infuse the U.S. economy and who also met certain requirements could be granted legal, Lawful Permanent Residence in the United States.

The U.S. Government issues 10,000 of these EB-5 investment visas every year, setting aside just 3,000 of these visas for those people who choose to invest and immigrate through a designated and approved EB-5 Regional Center.

When considering an investment into an approved EB-5 Regional Center there are several steps and procedures that must be followed.

To Apply

A potential investor is required to file a petition with the US Citizenship & Immigration Services (USCIS). Upon approval of this application, the investor and immediate family (which includes spouse and single children under 21 years of age) may apply for an Immigrant Visa at the US Consulate or if the investor is already located in the United States, apply for an Adjustment of Status at any regional USCIS office.

The initial resident status that is granted is “conditional” for a period of two years. Prior the termination of this two-year preliminary period, the Conditional Permanent Resident must file an additional application with the USCIS to request removal of the conditions (referred to as the filing of the form 829). If the investor has demonstrated that they invested and/or was actively in the process of investing the required capital, the investor maintained the investment throughout the two-year conditional period and the required jobs were created, then the application should be approved.

To Invest

• The Initial DepositA prospective investor is required to make a USD$10,000 deposit to reserve a position. The deposit is fully refundable after 45 days, which is the time frame that allows for due diligence. An Offering Memorandum, Limited Partnership Agreement and Business Plan will then be provided to the investor, upon receipt of the initial deposit for respective project they are choosing to invest into. Additionaly an Investor Questionnaire will be provided and needs to be completed in its entirety for submission and review to USCIS. If the investor chooses to terminate the agreement within the 45-day review period, then the initial deposit is FULLY refundable
• Complete the InvestmentTo complete your EB-5 investment application, the remaining deposit amount of USD$40,000 must be paid (this brings the total amount of money you have paid up to this point to be USD$50,000 within the 45 day review period. The remaining balance of the required investment, plus the additional and separate Administration Fee* is to be paid within 60 days thereafter. At this time the funds are then invested into the investment project to stimulate the local economy as planned and the invested funds will also begin to earn bank interest until expended into the project. (*the full amount of the Regional Center administrative fee will vary depending on the Regional Center subscription agreement, for more specific information on the AMOUNT of a particular administrative fee please contact a representative from Exclusive Visas)

Timing

The entire application process may take nine to fifteen months to be fully complete. The USCIS is currently taking about two months to process the EB-5 applications. Prior to submission, time is required to conduct due diligence, make the investment and prepare the documentation which supports the petition, complete background checks and source all funds. If the investor is in lawful status when the EB-5 application is approved, they will be eligible to apply for Adjustment of Status to Conditional Permanent Resident without having to leave the United States. This application process may take up to six months or longer to be decided. If the investor is not based in the United States they will apply for an Immigrant Visa at their local US Consulate or Embassy, a process which may take up to six months or longer to be approved, depending on the country they reside.

Recommended steps in the process

• Contact the U.S. Immigration Fund for a consultation and allow our advisors to review and discuss the necessary details on applying for the EB-5 Visa
• Discuss the commitment of funds and research the required documentation needed to prove to prove the money is from a lawful source and belongs to the investor as well as confirming the capital investment is in fact financially viable
• Upon completion and clearance of capital, officially make the capital investment into an approved Regional Center project
• File the application with the USCIS. The application to petition citizenship requires that the USCIS certify the eligibility of the applicant and the funds for investment for EB-5 status
• Upon approval of the application, if the investor is in the United States they may apply for an Adjustment of Status to the Conditional Permanent Resident status. If the investor is overseas, they must wait for notification from the National Visa Center to prepare documents for the Immigrant Visa Interview at the US Consulate or Embassy in the country they reside. It should be noted that the purpose of the Adjustment of Status or the Immigrant Visa Interview is to ensure the investor is not subject to grounds of exclusion
• Upon being granted the Conditional Permanent Resident status, the wait period is 21 months to reconfirm that 100% of the investment has been made and as a result the 10 required jobs have been created (if required, based on the type of investment made)
• Once the wait period of 21 months has ended and before month 24, the application to remove Conditional Permanent Resident status (Form I-829) will be filed
• A full Lawful Permanent Resident status or “Green Card” will be granted for indefinite resident status and work permission in the United States once Conditional Permanent Resident status is removed. US Citizenship will be possible 5 years after the Conditional Green Card is issued and once satisfactory residence and additional criteria have been met

Yes, investment in the EB-5 Investor Visa program is open and available to anyone from any country. Although it can be done, potential investors from countries that do not have reliable tax laws and/or require reliable financial documentation will find it much more difficult to prove the source of funds which is a key element to a succesful approval of an EB-5 application.