SG provides legal services for foreign nationals who are looking to come to the United States for the purposes of investing in our local economy. The Immigration and Nationality Act (INA), which governs all immigration to the United States, sets aside 10,000 “EB-5” immigrant visas each year for investor immigration. Some of these visas are reserved for those aliens who invest in targeted employment areas, or TEAs, and others are targeted toward those who invest in commercial enterprises affiliated with Regional Centers. Each avenue toward obtaining a visa has a complex series of overlapping definitions and application process(es) which SG can help clients assess which fits each unique set of facts and circumstances and then advise through every step of the process.
The general guidelines to qualify for an EB-5 visa are:
The USCIS requires a preponderance of evidence to prove the above requirements. The evidence must only show that what the applicant claims is more likely so than not so, which is a lower burden of proof than clear and convincing and much lower standard than beyond a reasonable doubt.
An investor can apply for the Immigrant Investor Program if they are already in the U.S. on a different visa or if they are applying from abroad. The initial application is the submission to USCIS of form I-526, which must include explanation and evidence showing: that the capital investment has been made or is being made in a new commercial enterprise, that the capital used in the investment was lawfully gained, that the investor will be managing the new enterprise, and a business plan that includes the creation or preservation of full-time jobs. The capital investment can be cash, cash equivalents, equipment, inventory, or other tangible property, or indebtedness or a promissory note secured by assets owned by the investor. Evidence that investment is being or has been made includes but is not limited to bank statements showing deposit in US bank accounts, evidence of assets purchased (such as sales receipts and invoices), evidence of property transferred from abroad to the US (such as commercial entry documents or bills of lading), evidence of money transferred or committed to be transferred to new enterprise in exchange for stock, or evidence of loan, mortgage, promissory note or other evidence of borrowing secured assets.
A new commercial enterprise is any for-profit activity formed for the ongoing conduct of lawful business that has been or is formed after November 29, 1990. Investment in a commercial enterprise created before November 29, 1990 is acceptable if the enterprise is substantially restructured using the investment from a foreign investor or if it is expanded with substantial change (substantial change is a 40 percent increase in net worth or number of employees). Evidence of a new commercial enterprise includes but is not limited to:
More than one foreign investor may invest in the same commercial enterprise, but each must meet the investment and job creation requirements individually. The commercial enterprise may also include more than one business that receives part of the capital investment. For example, a commercial enterprise may own two businesses, in which the investor invests $600,000 and $400,000. This meets the investment requirement, and these businesses can create 10 or more jobs together (for example, 6 jobs in the first and 4 in the other), but both businesses must be owned by the same commercial enterprise. An investor is considered to be managing the new enterprise if they have day-to-day managerial responsibilities or are involved in policy formation. To show this, the application should include a description of the position title for the investor, evidence that the investor is a corporate officer or member of corporate board of directors or evidence of investor involvement in limited or general partnership with managerial or policy formulation duties.
Evidence the USCIS accepts to demonstrate that the capital invested was lawfully gained includes but is not limited to foreign business registration records; corporate, partnership or other tax forms filed in or outside of the US in the last 5 years; certified copies of judgments or evidence of pending court cases involving monetary claims in or outside of the US in the last 15 years; or evidence of other sources of capital.
Fulltime jobs are at least 35 hours per week. These 35 hours can be split into two or more time sharing positions, and only positions expected to last two years count as jobs created. Temporary, seasonal, or intermittent jobs do not qualify.
Note that the investment does not have to be completed and the jobs do not have to be created at the time of the initial application for an EB-5 visa; the investor only must demonstrate a commitment to invest the capital and a business plan sufficient for the creation of 10 jobs to qualify for a conditional green card.
If the investment is in a TEA, the application should include evidence showing that the enterprise is in fact located in a rural area or an area with high unemployment. To be located in a TEA, the enterprise must principally be doing business in a designated area. The business is officially located where the enterprise regularly, systematically and continuously provides goods or services that support job creation; if that is in a TEA, the investor must only make a capital investment of $500,000. An investor can show that the investment is being made in a rural area by citing the Office of management and Budget, which designates metropolitan areas, and the most recent decennial census, which measures population. Evidence showing that the investment is in a high unemployment area should be based on the most recent publicly available government data on unemployment, available from the Bureau of Labor Statistics, which measures both average national unemployment and unemployment within states, counties, metropolitan areas, and cities.
After the approval of form I-526, the investor can apply to the State Department for an EB-5 visa to enter the U.S. or directly with USCIS for a change of status (using form I-485) if the investor is already in the U.S. on a different visa. The EB-5 visa gives the investor, their spouse and unmarried children under age 21 two year conditional legal permanent residency, or a conditional green card. The conditional green card gives the investor and their family the same privileges as a green card without conditions except that the investor must apply before the end of the two year period to have the conditions removed.
The application to remove the conditional status of a green card must be filed within 90 days prior to the end of the two year period. This application, form I-829, must include the same business plan as was submitted two years earlier with form I-526 (although this regulation is under review, as it stands currently the business plan in both applications must be the same). Also included in I-829 is evidence that the investor has or is in the process of investing the full amount of capital required and that the appropriate number of jobs have been created or will be created in a reasonable amount of time.
When an investor files form I-829, USCIS cannot revisit the validity of the business plan approved with the initial application, including the job creation projection.
If the investment is in a troubled business, where the requirement is to preserve jobs instead of create them, the investor must supply evidence that at least 10 jobs in the enterprise have been preserved. If the initial investment approved was located in a TEA it is acceptable if the area no longer qualifies as a TEA when the application to remove conditional status is filed. Changes in population or unemployment of this type are acceptable because the goal of establishing a TEA is to increase job creation in said area.
Additionally, at the end of the two-year conditional green card period the investor does not have to have completed the entire capital investment and job creation requirements, but only show that they have begun and that the business plan shows that they will be completed in a reasonable amount of time. This means that the investor can have their conditional status removed based on projections in the business plan.
Evidence of meeting the investment requirement includes but is not limited to: audited financial statements, bank statements, invoices, receipts, contracts, business licenses, Federal or State income tax returns, or Federal or State tax statements. Acceptable evidence of job creation includes but is not limited to photocopies of relevant tax records, I-9 forms, or similar documents for qualifying employees, or a comprehensive business plan showing that commercial enterprise will need at least 10 employees with approximate dates of when they will be hired.
If the I-829 application is approved the conditional status of the investor’s and the investor’s family’s green cards will be removed. This means that the investor and their immediate family are authorized to remain in the U.S. permanently with no conditions, and that they can seek citizenship as any legal permanent resident or green card holder would.
Another option for investment is through the Immigrant Investor Pilot Program. Many of the qualifications are the same and the application process is similar, but there are a few important differences. Through the immigrant investor pilot program, an investment is made in a Regional Center. A Regional Center is approved by the federal government as a public or private entity that directs foreign investment in a defined geographic area. These can be established and controlled by a foreign investor or by a US citizen who oversees investments, and a Regional Center can entail more than one business. Regional Centers must promote economic activity through increased export sales, improved regional productivity, job creation and increased domestic investment in a particular area to be approved by USCIS. There are currently 226 Regional Centers in 41 states, including the District of Columbia and Guam. A full list of existing Regional Centers is available online.
There are a number of differences between the basic EB-5 program and the Regional Center program. While investment in a Regional Center still carries with it some risk (which is required to qualify for an EB-5 visa), this investment can be a more hands-off approach that does not require the investor to create a new enterprise or oversee the growth of an existing business enterprise. As such, choosing the correct Regional Center that fits an investor’s needs is very important.
Regional Centers can also be located in targeted employment areas. As with the basic investment program, when investing in a Regional Center in a targeted employment area the initial investment required is $500,000 instead of $1 million.
Another major difference when investing in a Regional Center is the job creation requirement. Because Regional Centers pool investments, a sole investor is not required to directly create or preserve 10 jobs. Instead, full-time jobs can be created or preserved both directly and indirectly. Direct jobs are positions created and located within the commercial enterprise in which the investor has invested their money. Indirect jobs are positions that can be shown to be created as a result of the investment in an enterprise associated with a Regional Center, such as producers of materials, equipment, and services that are used in the commercial enterprise.
The application process for an EB-5 visa through investment in a Regional Center is similar to that of the basic EB-5 visa, but there are a few key differences. In addition to showing that the investment has been made or is being made, that the capital used in the investment was lawfully gained, and a Regional Center business plan that includes the creation or preservation of full-time jobs, the initial application for an EB-5 visa must provide evidence that the Regional Center where the investment is being made is an approved Regional Center, and, if applicable, that the Regional Center is still located in a TEA. Note that the designation of a Regional Center as located in a TEA may change based on population and unemployment of the area in which it is located even if the Regional Center business plan remains the same.
After the initial application there is still a 2-year period of conditional legal permanent residency. And the investor must still submit an application to remove the conditional status within 90 days before the end of that 2-year period. This application should contain the same evidence as the application to remove the conditional status of the investor’s green card under the basic EB-5 program, with the addition that, to be credited with the indirect creation of jobs, this application must show that the capital investment was made in accordance to the Regional Center’s business plan. Similar to the basic EB-5 program, if the Regional Center was in a TEA when the initial application (form I-526) was filed but the area no longer qualifies as a TEA with the application to remove conditional status, the investor is still eligible to have the conditional status removed from their green card. Similarly, if the entire investment has not yet been made or 10 jobs have not yet been created, the investor need only show that the investment will be made in a reasonable amount of time and that the business plan will result in the creation of the necessary number of jobs.
An individual who would like to establish a Regional Center for foreign investment must submit a proposal to the USCIS to receive official Regional Center designation before foreign investors can benefit from investments in the newly established Regional Center. Regional Centers can be established by foreign investors or by US citizens.
The proposal must include:
Though it is not required, the proposal may include an exemplar I-526 petition as it would be filed by an alien investor seeking to invest in the proposed Regional Center. If an exemplar I-526 petition is filed with the proposal for a Regional Center, the USCIS can identify potential issues that would prevent the official designation of a Regional Center and these issues can be addressed be the applicant.
To submit a proposal for a Regional Center, an individual must submit form I-924 to USCIS. There is no fee to submit an I-924. When the Regional Center is approved, USCIS has acknowledged that the econometric models and business plans appear to be feasible and that the jobs will be directly or indirectly created through capital investment.
While typical processing time for form I-924 is 9 months, an applicant can request that their application be expedited. Expedite requests are reviewed on a case-by-case basis by the Director of USCIS using these criteria: threat of severe financial loss to company or individual; it is an extreme emergent situation; it is an humanitarian situation; the requesting organization is a nonprofit; it benefits the Department of Defense or is a National Interest Situation (in which case the expedite request must come from a U.S. government entity); there was a USCIS error; or expedition is in compelling interest of USCIS.
If the I-924 form is rejected or the Regional Center designation is revoked, an individual can file an appeal of the USCIS decision using form I-290B. This form requires a $630 fee to the office that made the decision, and must be filed within 30 calendar days after the decision has been made (33 days if the decision is mailed). Included in this form is the basis for appeal or motion, and an individual may also submit a brief or additional evidence, though this is not required.
Additionally, within 90 days after the end of each fiscal year (on or before December 29th of each year) an approved Regional Center must submit an I-924 Amendment Application (form I-924A) to demonstrate continued eligibility for the Regional Center designation. Failure to file an I-924A form each year will result in USCIS issuance of intent to terminate participation in the Regional Center Pilot Program. In addition to general information about the Regional Center (e.g. name, industry, address), the I-924A form requires:
Approval of the I-924A form gives the enterprise the official declaration as a Regional Center for one year.
The EB-5 investor visa provides an excellent opportunity for foreign investors and business owners to invest in a business in America and gain legal permanent residency in the US. With the option for the basic investment or investment through a Regional Center, investors can choose the level of involvement in the business that is best for them, and both options put investors and their families on a path to legal permanent residency and, if they choose, could lead to citizenship.
Once you have successfully obtained an EB-5 investor immigrant visa, you may be able to eventually become a lawful permanent resident of the U.S. if that is your desire. However, you must complete a complex petition and approval process to change your legal status. The SG immigration attorneys at SG can guide you through each step of the process to help you become a naturalized citizen.
At SG, we are dedicated to assisting foreign nationals in their economic development efforts in the United States. We have the skills and experience to provide you with the legal guidance that you will need to achieve your goals.