What is the EB-5 Investor Visa Program?
By spending a minimum of $$800,000 or $1,050,000 (depending on the location) in a project with a US base that meets the program’s requirements, overseas investors can become permanent residents of the US through the EB-5 investor visa program.
Three major components are necessary for the immigrant investor category:
- an expenditure of money;
- participation in a new business venture; and
- creating jobs.
The initiative aims to promote foreign investment in the US and provide employment for US citizens. Investors must demonstrate that their investment will generate at least 10 full-time jobs for US citizens in order to be eligible. Successful candidates may be granted a conditional green card, which they and any qualified family members may later convert to a permanent green card if they satisfy the program’s standards.
Every EB-5 investor must put money into a freshly launched business. This new commercial enterprise must have been established either:
After November 29, 1990; OR
If established before November 29, 1990, the business must have been:
- Purchased and the existing business is reformed or reorganized in a way that creates a new commercial enterprise; or
- Expanded through the investment, resulting in at least a 40% increase in net worth or in the number of employees
Any for-profit organization established for the continued conduct of authorized business is considered a new commercial venture, including:
- a sole proprietorship;
- a limited or general partnership;
- holding company and its wholly owned subsidiaries, provided that each subsidiary is active in a for-profit endeavor and was established for the ongoing operation of a legal business;
- Business Trust,
- Limited Liability Company,
- Joint Venture, etc.
What is the Investment Requirement for EB-5?
Cash and any other real, personal, or mixed tangible assets that the immigrant investor owns and controls may be used as capital for the investment. The fair market value of all capital shall be determined in US dollars.
The exclusions from the definition of capital are:
- assets acquired through illicit channels, such as criminal activity, directly or indirectly;
- investment money made in exchange for a note, bond, convertible debt, obligation, or other type of debt contract between the immigrant investor and the new business;
- Invested capital with a guaranteed rate of return;
- Invested capital that is governed by any contract between the immigrant investor and the new business that gives the immigrant investor a legal right to repayment, with the exception that the new business may have a buyback option that may be exercised solely at the new business’s discretion.
What is the Amount of the Investment Required for an EB-5 Green Card?
President Biden signed the EB-5 Reform and Integrity Act as part of the Consolidated Appropriations Act, 2022 (Public Law 117-103), which created new requirements for the EB-5 immigrant visa category and the Regional Center Program. Immigrant visas are authorized under the Regional Center Program through Sept. 30, 2027. For petitions filed on or after March 15, 2022, the amount that must be invested is $1,050,000. If the investment is made in a rural area or an area that has experienced high unemployment, the investment amount is reduced to $800,000.
What is Considered a Lawful Source of Funds?
The investor who is an immigrant must provide the following proof, when needed, to show that the money he or she invested and any money used to cover administrative costs and fees came from legitimate sources:
Tax and business records, or documents of a similar nature, such as records of foreign business registration; and tax returns filed by corporations, partnerships, or other entities in any form and filed in any country or subnational entity;
Personal tax returns, including those for income, franchise, property (whether tangible or intangible), or any other tax returns of any kind, filed in the previous seven years (or another time frame to confirm that the investment was made with funds that were obtained legally) with any taxing jurisdiction inside or outside of the United States by or on behalf of the investor;
any more proof pointing to a different source of funding or administrative costs; and
Evidence of financial judgments rendered against the investor, such as:
- certified copies of any verdicts, proof of all ongoing governmental civil or criminal proceedings, administrative actions by the government, and any pending or concluded private civil actions from any court, domestic or foreign, that could result in monetary judgments against the investor; and
- the names of all individuals who send money into the country on the investor’s behalf. the amount of money utilized to satisfy the capital requirement.
Gifts and borrowed money are expressly permitted, provided that:
- They were genuinely given or lent to the investor;
- They were not given or lent in order to get over any restrictions placed on acceptable sources of funding, including but not limited to cash gained through criminal conduct.
Investors who rely on gifts or loans must prove that the money came from legitimate sources by giving the proof outlined above for the giver or, if a bank is not involved, the lender.
What are the Job Creation Requirements for EB-5?
An EB-5 investor must contribute the necessary funds to a brand-new business venture that will add at least 10 qualified full-time jobs. A qualifying employee is a citizen of the United States, a lawful permanent resident, or another immigrant who is permitted to work in the country. This includes conditional residents, temporary residents, asylees, refugees, and anyone whose deportation is now suspended. Investors who are foreign nationals, their spouses, children, or anybody else with a nonimmigrant visa (like an H-1B nonimmigrant) or who is not authorized to work in the United States are not included in this description.
The new business must directly produce the full-time employees that will be counted if it is not housed within a regional center. This means that the eligible employees must be employed directly by the new business enterprise (or one of its totally owned subsidiaries).
For a new business based in a regional center, the full-time positions may be created either directly or indirectly by the new business. Indirect jobs may be used to satisfy up to 90% of the job creation criterion for regional center investors.
- Direct employment creates an employer-employee relationship between the people a new business employs and themselves.
- Indirect jobs are held outside of the new business, but are produced as a result of the business.
The investor must demonstrate that the number of current employees is, or will be, at least two years from now, at or above the pre-investment level.
What is the Regional Center Program?
In 1992, Congress established the Immigrant Investor Pilot Program, now referred to as the Regional Center Program, which modified the job creation requirements for the EB-5 category. This initiative was created by Congress to assess the feasibility of pooling investments in specified regional centers. Because it permitted the use of appropriate economic or statistical approaches to prove job creation, the Regional Center Program, as it was initially conceived, was distinct from the direct job creation (standalone) model. When investing in a Regional Center immigrant investors are credited for indirect (including induced) jobs. Jobs held outside the company that receives funding from an immigrant investor are referred to as indirect jobs. The Regional Center Program was initially given congressional approval as a trial pilot project with a 5-year expiration date which was extended several times. As part of the EB-5 Reform and Integrity Act of 2022, which went into effect on May 14, 2022 the Regional Center Program is now authorized through September 30, 2027.
What is required for a Business Plan?
A thorough business plan should at the very least outline the company, its goals, and any products or services it offers (or both).
The strategy should include a market analysis that lists the names of rival companies and their comparative advantages and disadvantages, compares their offerings and pricing strategies, and provides information about their target markets and potential clients. The required permits and licenses should be listed in the proposal. The manufacturing or production process, the necessary materials, and the sources of supply should all be mentioned, if appropriate.
Any agreements made for the distribution of goods or the supply of materials should be specified in the strategy. It should go over the company’s marketing plan, including price, advertising, and customer service. The organizational structure of the company and the qualifications of its staff should be described in the plan. It should outline the company’s employment needs, including a hiring timeline, and list job descriptions for every position. Sales, cost, and income estimates should be included, along with a description of the assumptions behind them. The company plan must be believable above everything else.
USCIS evaluates company ideas as a whole. It is up to an officer to decide if it is more likely than not that the business plan is thorough and reliable. Although not all of the specific aspects must be included in a business plan, the more specifics there are, the more likely it is that USCIS will find the plan to be thorough and legitimate.
How to File for EB-5?
To qualify for EB-5, an immigrant investor must submit an initial immigrant petition and accompanying documents. Upon adjustment of status or entrance to the United States, the immigrant investor will become a conditional permanent resident.
When submitting the Immigrant Petition by Alien Investor (Form I-526), the petitioner must demonstrate that they satisfy the following eligibility requirements:
- The new business enterprise has received the necessary capital investment or is actively in the process of receiving that investment;
- The investor got the investment funds through legal ways;
- At least 10 full-time opportunities will be created by the new business for qualified workers;
- The immigrant investor is currently managing the new business or will do so soon.
If an immigrant visa is available at the time of filing an I-526 petition and the investor is in the United States in a lawful nonimmigrant status, the investor may also submit an I-485 application for adjustment of status. Upon approval, the conditional green card is issued for two years.
The immigrant investor must submit a Petition by Investor to Remove Conditions on Permanent Resident Status (Form I-829) within 90 days of the 2-year anniversary of the date conditional permanent resident status was granted in order to request the removal of the conditions.
The following documentation must be included with the immigrant investor’s petition to lift the restrictions:
- Evidence demonstrating that the immigrant investor invested the necessary funds or was actively engaged in doing so and maintained the investment during the immigrant investor’s time in the country; and
- Evidence that at least 10 full-time roles for qualified people have already been established by the new commercial firm, or that they can be reasonably expected to do so. In the case of a struggling company, the investor must provide proof that throughout the time following his or her admission as a conditional permanent resident, the commercial enterprise maintained the number of current employees at no less than the pre-investment level.
To conditional permanent residents who properly file a Form I-829, USCIS will send a receipt Notice of Action (Form I-797). The notification demonstrates that USCIS has received the Form I-829. Due to current extended processing times for I-829 petitions, the receipt notice also acts as documentation that USCIS has extended the conditional permanent resident’s status for the duration of the notice. In these situations, the notice along with the conditional permanent resident card that is about to expire or has already expired serves as proof of conditional permanent resident status and can be used to demonstrate employment authorization and permission to return to the United States after brief overseas travel.
The EB-5 investor visa program is like a two-way street, where foreign investors invest in the United States, and in return, they receive the opportunity to permanently reside in the country and contribute to its economic growth. The EB-5 investor visa program can be an excellent opportunity for foreign investors who wish to obtain permanent residency in the United States while also contributing to the country’s economic growth. With the help of an experienced immigration attorney, investors can navigate the complex application process and increase their chances of success.
If you are in need of a US work visa or permanent residency, speak with one of our immigration lawyers. Please contact us online, call our Houston business immigration attorney office directly at 713-953-7787, or schedule a consultation.