Corporations / Employees
EB-5 Investment Based
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 generally located 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. The petitioner will also need to provide evidence to prove that the source of funds was procured by legal means. Usually, investors are required 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 the 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 or 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.
Commercial Enterprise Location & TypeUnlimited 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.