EB5 Investment Greencard:

The fifth preference category of employment-based immigration is for immigrants seeking to invest substantial sums in a new business in the U.S. that will create full time employment for at least ten qualifying U.S. citizen or immigrant workers. The minimum investment is $1 million of capital, which may be reduced to $500,000 if the investment is made in a “targeted employment area” where unemployment is at least 150 percent of the national average rate.

There are three basic requirements for an EB-5 visa:

  • First, the individual must establish a new commercial enterprise or invest in an existing business that was created or restructured after November 19, 1990 (with some exceptions);
  • Second, the alien must have invested $1 million ($500,000 in some cases for targeted employment areas) in the business; and
  • Third, the business must create full-time employment for at least 10 US workers.

The law requires an investor-petitioner to have invested in or be in the process of investing the required capital. “Targeted employment areas” for the purpose of the lower investment requirement ($500,000) are made in rural areas. The assessment of whether the investment is in a targeted employment area is based on statistical information relating to the time of investment and the location where the enterprise is principally doing business.

To invest means to contribute equity capital to the enterprise. Loans of capital by the investor to the enterprise do not qualify as an appropriate investment. The investor cannot receive any bond, note, or other debt arrangement from the enterprise in exchange for the contribution of capital. Capital may include cash and cash equivalents, equipment, inventory, and other tangible property.

The USCIS also requires proof that the capital invested is at risk. USCIS focuses on actual and intended uses of capital to confirm that it will be used for job creation and profit-generating activity. Therefore, USCIS requires more than a deposit of funds into a business account; it also requires evidence of the actual undertaking of business activity. Use of capital for partnership expenses and reserve accounts unrelated to job creation is insufficient.

An investor petitioner should present evidence that traces capital from the petitioner directly to the enterprise. Also the petitioner needs to provide evidence to prove that the source of funds was procured by legal means. Usually investors have to submit the past five years of income tax returns and financial statements to prove they have sufficient lawful sources for the capital invested. The applicant may receive a gift of the funds, provided the proper gift taxes are paid, if required by law.

Multiple investors may establish a new commercial enterprise which can be the basis for the EB-5 classification. However, each investor applying for the classification must meet the requirements for the EB-5 classification separately. For example, each investor must create 10 jobs for US workers.

An EB-5 investor must be engaged in the management of enterprise either through day-to-day managerial control or through policy formulation. A purely passive role is not permitted. Prior to filing the petition, time is required to conduct due diligence, make the investment, and prepare the documentation in support of the petition.

The EB-5 initial resident status is “conditional” for two years. In order to become a lawful permanent resident, eligible investors must file Petition by Entrepreneur to Remove Conditions, with the appropriate USCIS Regional Service Center within 90 days before the second anniversary of being admitted to the U.S. as a conditional permanent resident. The petition should be granted if the investor demonstrates that he/she invested or was actively in the process of investing the requisite capital; maintained the investment throughout the two-year period of conditional residence; and the investment created the requisite employment.

There are two ways of in investing in the United States: direct investment or investment in a Regional Center.

There are numerous advantages and disadvantages to Direct Investment versus Investment in a Regional Center.

  DIRECT INVESTMENT REGIONAL CENTER
Commercial Enterprise Location & Type Unlimited choices, with freedom to choose where you want to invest in the U.S. and what industry to invest in. (i.e. Subway, Hotel, Factory, Convenient Store, & etc.).

Note: If you have a business in your home country, then you can make a new business in U.S. as a subsidiary to your home country business or vice versa.

Limited choices, only USCIS approved businesses and are usually in specific industries (i.e. Malls, Hotels, & etc., not small business).
Business Plan Required to be Approved Already satisfied by Regional Center
Job Creation Harder, only direct jobs Easier, direct, indirect and induced jobs
Management & Control Greater control over business & involved in day-to-day management (which leads to sales growth).

Note: If business does well, you can expand, but not in regional centers.

Less control over business & Regional Center performs day-to-day management and makes all executive decisions.

Note: Regional Center is General Partner and investor is only a Limited Partner.

Petition Processing Time 2-3 months longer processing time. 2-3 months shorter processing time
Residence You must live near the business (i.e. if business in small town in Missouri, you must reside in Missouri close to the business, to manage it). You can live & work anywhere in the U.S. (i.e. even though business is located in small town in Missouri, you can live in Los Angeles, California and work there).
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