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Immigrant Investor Visa (EB-5)

What does “capital” mean?
Capital means cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien entrepreneur that were acquired by lawful means.

What does “invest” mean?
What does “invest” mean?
Invest means to contribute capital. This can be in the form of cash, equipment, inventory, and any debt secured by assets owned by the entrepreneur for which he is personally and primarily liable. Any loan, promissory note, mortgage, or other debt arrangement secured by the assets of the newly created enterprise does not constitute an investment. Likewise, any loan or debt arrangement between the entrepreneur and the newly created enterprise does not constitute an investment.

Note: A contribution of capital in exchange for a note, bond, convertible debt, obligation, or any other debt arrangement between the alien entrepreneur and the new commercial enterprise does not constitute a contribution of capital.

What does “commercial enterprise” mean?
Commercial enterprise means any for-profit, lawful activity, such as:

  1. a newly created business, or
  2. the purchase and restructuring of an existing business such that a new commercial enterprise results, or
  3. the expansion of an existing business such that there is a 40% increase in the net worth or in the number of employees.

What is the minimum amount of investment required?
The minimum amount of investment is $1 million. Investments in “targeted employment areas,” including most regional center projects, can qualify with a minimum of $500,000.

What is a “targeted employment area?”
A targeted employment area is a rural area or a geographical area that has experienced unemployment at a rate of at least 150% of the national average rate. Individual states are authorized to designate geographical areas within the state that qualify as targeted employment areas.

What areas are considered “rural areas”?
Rural area means any area not within either a metropolitan statistical area (as designated by the Office of Management and Budget) or the outer boundary of any city or town having a population of 20,000 or more.

How to calculate the investment amount for the EB-5 visa purpose?
The entire amount of the investment need not be in cash. Assets transferred to the U.S. investment can be included at fair market value. Amounts borrowed by the foreign 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 foreign investor, and the foreign 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 does not have to be made at the time of filing the EB-5 petition. However, the foreign investor must prove availability of the funds and an actual legal commitment of the required amount of capital. Please note that a mere intention to invest or plans of future investments without present commitment of the funds does 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 as stated. “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: (1) the creation of a new business; (2) the purchase of an existing business, which is reorganized to form a new enterprise; or (3) the expansion of an existing business.

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 foreign investor or the foreign 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 and induced employment.

Is there a time frame for creating these 10 employment opportunities?
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 a foreign 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% 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.

Is the immigration status granted to the foreign investor valid indefinitely?
The permanent resident status granted to the foreign investor is actually a “conditional permanent resident status” that is valid for a period of up to two years. The foreign 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. In the application, petitioning foreign investor with the conditional immigrant status must 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 foreign investor, his or her spouse and any unmarried, under 21 year old children can obtain permanent residence at the same time and through a single investment of the mother or father.

Is it necessary to obtain a labor certification when filing as an alien entrepreneur?
No. A labor certification is not necessary since there is generally not an adverse effect on the wages of U.S. workers and since this is a classification based on investment and employment creation and not the alien’s employment-based skills.

Is the foreign investor free to travel after obtaining conditional permanent resident status?
The foreign investor is free to travel in and out of the United States subject to the rules generally applicable to permanent residents.

What is the procedure for a foreign investor to qualify as an immigrant based upon the investment?
This is an exhaustive process that our law firm can help you with. Form I-539 petition must be supported by a substantial amount of documentation proving that the foreign investor meets all of the requirements.

What is the time frame for this process?
The I-526 petition is generally reviewed within three to six months for a direct EB-5 and often more than a year for a regional center EB-5. The conditional permanent residence process generally takes between six to twelve months depending upon whether the foreign investor is in the U.S. or, if outside of the U.S., which consulate will be interviewing the foreign investor.

What documents must be filed with the EB-5 petition?
The basic rule is that there must be documentation to establish each of the requirements set forth above. Specifically, documentation must prove the actual transfer or commitment of funds; the lawful source of the foreign investor’s funds; the location of the investment in a targeted employment area (if the investment is less than $1 million); the investment in a new commercial enterprise; the involvement of the foreign investor in the business; and the actual creation of 10 full-time positions or a comprehensive business plan showing the need for the 10 employees and the approximate dates when they will be hired. Specific additional documents will be required depending upon the details of the foreign investor and the investment being made.

What documentation must be presented to prove that the foreign investor’s funds came from a lawful source?
Generally, the foreign investor needs to 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. However, in that case, the person giving the gift must prove the lawful source of the gifted funds.

What is a regional center?
USCIS has approved a large number of regional centers. If a foreign investor invests in one of these approved regional centers, the foreign investor does not need to prove the creation of direct jobs for 10 U.S. workers. Rather, creation of indirect and induced employment based upon econometric projections is sufficient.

What must be proven in order to obtain removal of conditions on permanent residence?
The foreign investor must prove that the investment has been sustained – not withdrawn – and that the requisite jobs have been created.

What happens if the necessary jobs are not created?
If the necessary jobs have not been created, the foreign 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 foreign 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 foreign investor can prove at the time of filing of the I-829 petition that all of the necessary jobs will be created within a “reasonable time” (defined as one year).

When is it possible to apply for U.S. citizenship?
You are eligible to apply for U.S. citizenship after five years of the grant of green card. However, one can apply after four years and nine months, from the date of obtaining conditional permanent resident status if the foreign investor meets with physical presence and residence requirements. Applying for U.S. citizenship is optional.