Information Regarding EB-5 Visas
I want to invest in the USA and get a green card, is the EB-5 visa suitable for me?
EB-5 investor visa is suitable for people from all walks of life: professionals, business people, persons wanting to facilitate their children’s education and attend US colleges and universities, persons just seeking a new or better life in the United States, and persons wanting to retire in the United States. The EB-5 visa permits employment in the US for the investor and their family. Quite simply, the EB-5 visa gives you the opportunity and flexibility to do what you want in the USA. If you don’t want to actively manage business, you should consider a regional center EB-5 investment.
What if I want to manage my own business?
If you want to manage your own business, consider an L-1 Visa (Nonimmigrant intra-company transferee), E-2 visa (Nonimmigrant treaty investor), EB-5 alien entrepreneur investment by investing $1,000,000 into your own business which you control, and creating the necessary 10 new jobs within a new enterprise. If your goal is to have a green card and not to actively manage a business, it is cheaper and/or more convenient (and possibly with much less risk) to utilize a structured investment program in the regional center EB-5 category rather than to start and maintain your own business.
What can disqualify us from participating?
There are very few disqualifying or exclusionary events under the law. A criminal record involving crimes of moral turpitude is disqualifying, unless it can be proven that the crime was political in nature or occurred over 20 years prior to the application. A few major medical problems might also exclude an applicant, but for the most part this can be avoided if it can be proven that the applicant will be supported by others and therefore avoid being a recipient of government medical assistance. Applicants should seek advice from their legal counsel to determine what waivers may be available for eligibility.
Can I apply if I am currently an out-of-status national?
Out-of-status nationals are no longer permitted to apply for permanent residency from within the United States. “Out-of-status” means the individual has stayed in the U.S. longer than their authorized period of stay. Visa should be valid at the time of entry to the U.S. but the Form I-94 should be extended if the individuals need to stay more than the I-94 period. However, if they have filed any petitions or applications that lead to green cards, such as immigration petitions (through employment or family) or labor certifications during 245(i) benefit period by January 17, 1998 or April 30, 2001, they may file their applications to adjust status in the United States with the penalty of $1,000, which applies to applicants over 17 years old. If the out-of status nationals do not have 245(i) cases, they must return to their country of origin and apply through the United States embassy there. However, depending on the out-of-status period, they may be banned from obtaining a U.S. visa and entry to the U.S. for certain periods of time from the departure date.
Do I need to have previous business experience or education?
The investor is not required to have any prior business experience. Likewise, the investor is not required to demonstrate any minimum level of education. The only requirement for the investor is that he or she has the required net worth and capital. Some regional centers require the investor to be an accredited investor, a term used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by certain government filings. Accredited investors include individuals, banks, insurance companies, employee benefit plans, and trusts. In order for an individual to qualify as an accredited investor, he or she must accomplish at least one of the following:
1) Earn an individual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years and expect to reasonably maintain the same level of income.
2) Have a net worth exceeding $1 million, either individually or jointly with his or her spouse.
3) Be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
Must I speak English?
Must I be in good health?
Yes. Any communicable disease will disqualify you for immigration purposes forever.
What is meant by the requirement that the investor’s assets be “lawfully gained”?
Under USCIS regulations, the investor must demonstrate that his assets were gained in a lawful manner. This requires the investor to prove that his investment funds were obtained through lawful business, salary, investments, property sales, inheritance, gift, loan, or other lawful means.
Can money gifted by a parent or other relative be used for an EB-5 investment?
Yes, provided that any applicable gift taxes are paid. It must be demonstrated that the gift is an actual arms-length transaction. If the gift is a mere ruse or the gifted funds are intended to be given back after permanent resident status is granted, it will not qualify.
What is the difference between “conditional” and “unconditional” green cards?
Under the regulations, an investor who is approved for the EB-5 immigrant visa receives a “conditional” green card, which must be reissued after two years, subject to removal of conditions. Here, the major condition is that the investors create the requisite (10) jobs with their investments. Otherwise, the two cards offer the same rights and privileges.
Can I apply if I have been rejected or terminated in the past by USCIS for an L-1, E-2, B, or other visa?
Rejection in the past does not disqualify the applicant unless the reasons are immigration fraud or health problems. It is most important that all criminal, medical, or U.S. immigration history problems be disclosed to the limited partnership and legal counsel in advance of the application.
After petition approval, can members of the family interview in different countries?
Family members can interview in different countries. The country of origin or where the family has current ties is the standard interview site. Often one member of the family is located in another country, such as a student attending school in the U.S. The student does not have to return to the country of origin and can adjust status in the United States at the district office of the USCIS, as long as he or she is “in status” meaning legally present in the United States.
Who receives the permanent residency (“green card”)?
Husband, wife and any unmarried children under the age of 21 will receive a green card. It is possible for adopted children to be included in the family. There is a limit of five children. Upon approval you will receive a form evidencing approval and a travel document. You will also receive a temporary green card in the mail.
Does EB-5 immigrant visa have a yearly quota cap?
The United States admits about 10,000 EB-5 investors, and at least 3000 of 10,000 are reserved for investors in regional centers.
What issue causes the most problem when applying for an EB-5 visa?
The most common problem area has been insufficient documentation of the source of funds. Many people try to disclose the least possible information only to have the file returned with a request for further information, also known as “RFG”. It is better to provide too much information rather than too little information. In this era of terror alerts, and suspicions about money laundering, CIS case examiners require a well-documented source of funds.
How long must I remain in the United States each year?
The first requirement of any investor after they receive the visa at the United States overseas consulate office is to enter into the United States within 180 days of visa issuance by the consulate. The investor must then establish residency in the United States. Evidence of intent to reside includes opening bank accounts, obtaining a driver’s license or social security number, paying state and federal income taxes, renting or buying a home. The United States resident may work overseas if required based upon the nature of the business or profession. However, all permanent residents must remain in the US for more than six months each year, or they may be deemed to have abandoned their permanent residence status.
What if I need to travel out of the US for more than a year?
You can apply for a re-entry permit (on Form I-131) before you leave the US. You can depart before the re-entry permit is approved.
With a re-entry permit, you can return to the US even after one year until the re-entry permit’s expiration date. Re-entry permits are issued for two years. You cannot renew a re-entry permit, but you can return to the US for a short time and apply for a new one. The second such re-entry permit will be granted for two years, but subsequent ones may only be approved for one year at a time.
What is an “escrow” account, and when does the investor transfer the money to this account?
An escrow bank account is a legal, interest-bearing account established in a bank. This type of account is commonly used in the sales of real estate, businesses and personal property.
How does the bank “escrow” account protect me against the risk of losing my money?
The initial cash deposit from the investor is placed in a legal, interest-bearing escrow bank account. When an escrow bank account is established, the funds continue to belong to the investor. The attorney or bank has an agreement with the investor that requires the funds to be released from the account only when the petition is approved by the USCIS.
Admission to the United States after investing, filing the I-526 or during consular processing
Admission to the United States as a visitor or in most other nonimmigrant statuses is predicated upon the intent to depart the country at the end of the period of admission. This nonimmigrant intent may be difficult to establish once an investor has paid funds into an EB-5 project or files an I-526, as the sole purpose of this investment and petition is to establish that the investor qualifies within a program that awards lawful permanent residence. Investors should consult with competent counsel to determine how to maximize the likelihood of a temporary (nonimmigrant) admission to the United States subsequent to making the investment or filing of either of these cases.
What is included in calculating the investment amount?
The entire amount of the investment need not be in cash. Assets transferred to the U.S. for investment can be included at fair market value. Amounts borrowed by the investor can be included in the required minimum investment amount but only to the extent that the debt is secured by assets owned by the investor, and the investor is personally and primarily liable. The assets of the business in the United States in which the investment is made cannot be used to secure any of the indebtedness.
Must the entire amount of the investment be made at the time of filing an EB-5 petition?
The entire amount of the investment need not have been made at the time of filing the petition. However, the investor must prove availability of the funds and an actual legal commitment of the required amount of capital. A mere intention to invest or plans for a future investment where there is no present commitment that the funds will not qualify.
Are there any restrictions on the types of businesses in which the investment must be made?
The investment must be in a “new commercial enterprise” in the United States. “New” means that the investment must have been made after November 29, 1990. “Commercial” is to be distinguished from a passive, speculative investment, such as a purchase of real estate for use as a personal residence or for potential appreciation in value (as opposed to an active real estate development project).
The U.S. investment can be in any one of four forms: (1) the creation of a new business; (2) the purchase of an existing business which is reorganized to form a new enterprise; (3) the expansion of an existing business; or (4) the saving of a failing business.
Are there any specific rules regarding an investment in an existing business that enables the existing business to expand?
The investment must result in a 40 percent increase either in the net worth or the number of employees of the business. For example, if a business has a $5 million net worth and employs 50 people, the investment would qualify either if it increases net worth by $2 million or if it results in an expansion of 20 employees.
Must the investor have any specific relationship with the U.S. business in which the investment is made?
The investor need not own any specific percentage of the business, be an officer of the business or be an employee of the business. However, the investor must be engaged in some way in the business, whether through actual day-to-day managerial control, by being a member of the board of directors, by being a limited partner, or the like.
Must the investment result in the creation of employment for U.S. workers?
The investment must create full-time employment for at least 10 U.S. citizens or immigrants (permanent resident aliens and other specified immigrant categories). The required 10 positions cannot include the investor or the investor’s spouse or children. The 10 jobs must be for employees of the enterprise in which the investment is made and cannot include independent contractors. However, for approved regional centers, the creation of employment can include indirect employment.
When must the employment be created?
The EB-5 petition must document that the required 10 jobs will be created within a 2 1/2 year period immediately following the approval of the EB-5 petition.
May an investor qualify based upon an investment in a failing business where the investment results in saving the business and saving the jobs of the business’s employees?
An investment in a “troubled business” may qualify without a requirement of showing the addition of new jobs to the business. In order to qualify, the business must have been in existence for at least two years and must have suffered a loss of at least 20 percent of its net worth during the past two years. The number of existing employees of the troubled business must at least remain the same for a period of two years.
Can two or more investors qualify for immigration based upon a pooled investment in a single business?
There is no limit to the number of investors who may qualify for immigration based upon an investment in a single business. However, each investor must invest the required minimum amount, and the number of jobs created must be equal to ten times the number of qualifying foreign investors. For example, if five investors each invest $1 million in a business, they can each qualify for immigration if 50 jobs are created in the business.
Is the immigration status granted to the investor valid indefinitely?
The permanent resident status granted to the investor is actually a “conditional permanent resident status” that is valid for a period of up to two years. The investor and family members are required to remove the condition by filing an application during the 90-day period preceding the second anniversary of obtaining this status. The petition will be required to demonstrate the establishment of the business, the investment of the requisite amount of capital and the creation of the required number of jobs.
Do all family members get conditional permanent residence status at the same time?
The investor, his or her spouse and any unmarried children under the age of 21 can obtain permanent residence at the same time and through a single investment by the mother or father.
Is the investor free to travel after obtaining conditional permanent resident status?
The investor is free to travel in and out of the United States subject to the rules generally applicable to permanent residents. Specifically, the investor must maintain a residence in the United States and must not be outside the United States for a continuous period of one year or more, unless a re-entry permit has been obtained.
What is the timing of this process?
I-526 petition is generally reviewed within three to six months. The conditional permanent residence process generally takes between four and nine months depending upon whether the investor is in the U.S. or, outside of the U.S., which consulate will be interviewing the investor.
What documentation must be presented to prove that the investor’s funds came from a lawful source?
Generally, the investor will present some combination of individual and/or business tax returns, employment records, documentation regarding sale of or dividends from a business, documentation regarding gifts or inheritance, and documentation regarding securities or real estate transactions.
Can all of the invested funds be a gift?
Yes. The investor has to prove the gifted fund is form a lawful source.
What must be proven in order to obtain removal of conditions on permanent residence?
The investor must prove that the investment has been sustained – not withdrawn – and that the requisite jobs have been created as set forth in the business plan filed with the EB-5 petition
What happens if the necessary jobs are not created?
If the necessary jobs will not be created, the investor will not be able to obtain removal of conditions on permanent residence and will lose any legal status in the U.S. If there will be a change or delay in creating the necessary jobs, it may be necessary for the investor to file a new I-526 petition and obtain a new two year period of conditional permanent residence status. It may not be necessary to do this if the investor can prove at the time of filing the I-829 petition that all of the necessary jobs will be created within a “reasonable time.”
When is it possible to apply for U.S. citizenship?
Four years and nine months after obtaining conditional permanent residence status. Applying for U.S. citizenship is optional.
Does the regional center investment include direct job creation, indirect job creation, or both?
Most regional centers include direct and indirect, and induced job creation. A safer alternative is an investment project that relies upon direct job creation only, with a plan to produce an economic impact study showing indirect and induced job creation if needed at the I-829 (removal of conditions) stage.
Can I ask about the regional center’s track record – how many I-526 petitions approved/denied, how many I-829 petitions approved/denied?
Yes. If the regional center will not provide this information, do not pursue an investment through that regional center. The safest regional centers at this point in time are those that have I-829 approvals, but there are very few of these.
What amount do I have to pay to invest?
In most regional centers, the investment amount is $500,000. Regional centers generally charge an administrative services fee ranging from $25,000 to $60,000.
The investor deposits the amount into an escrow account, and the money remains in escrow until the I-526 petition is approved. If I-526 petition is not approved, the investor will get the money back from the escrow account.
What use is made of the investor’s funds? What are the types of projects?
Regional center investments may involve commercial building projects, condominiums, hotels, film studios, heavy and light manufacturers, warehouses, real estate, and other types of projects.
What form of investment should I invest in? Are there different business models out there?
Yes. The most common investment vehicle is a limited partnership that loans money to a job-creating entity. Other forms of investment structure include limited liability companies that may be a partnership, equity investments, venture capital funds, and real estate investment trusts (REITs). These types of projects vary from regional center to regional center.
Does the regional center provide regular reporting of the status of the investment to the investors? How do I monitor job creation?
After you have invested in the projects, you should expect regular reports with an update on the investment project, job creation and new investment opportunities, at least quarterly. Otherwise, the investor should ask for it with detailed job reporting on a regular basis. This is to ensure that the investor meets the requirement for immigration procedure.
Do I have to look for my own attorney?
Some regional centers have their approved attorneys. Most regional centers allow you to choose an attorney freely.
Contact C.T. Lee & Associates by calling 800-494-3809 to learn more. We are located in New York City.