IMMIGRANT INVESTORS & THE EB-5 VISA: HOW THE IMMIGRANT INVESTOR PROGRAM WORKS

This program allows qualified persons to seek permanent resident status based on an investment in a U.S. company. The current amount of investment is either $800,000 or $1.05 million depending on the project or location in the United States. The investment must be in a business that will create jobs for 10 permanent jobs in the U.S. A quota of 10,000 EB-5 green cards are available each year. Most investors choose a project that is sponsored or affiliated with a USCIS designated regional center. Others, may choose a direct or standalone EB-5 business.

Qualifications

To qualify under the program, a potential investor may invest in commercial enterprise where they are the only EB-5 investor (called an EB-5 Standalone or Direct business), or in a pooled investment which funds a commercial enterprise through a “Regional Center.” Regional Centers are generally private companies in specific targeted geographic areas which the USCIS has determined can make investments that are likely to create the necessary 10 jobs per investor, whether directly or indirectly, in the region. In many regional centers the minimum capital contribution is $800,000, plus administrative or syndication fees that may range between $35,000 to $70,000. Many regional centers involve partnership investments, a structure which is permitted by USCIS in order to grant the investor a somewhat active role in the company but which is not completely passive.

Advantages & Considerations of an EB-5 Regional Center

One potential advantage investing through a Regional Center (in contrast with a standalone business) is that some investment projects can be pre-approved by the USCIS with respect to the investment financing structure of the project, and with respect to the job creation methods. Regional Center projects have the distinct benefit of being able to count indirect and induced jobs as forecasted by a reasonable economic methodology. As well, regional centers and their projects are required to submit annual reports of their financial status and job creation history to the USCIS each calendar year. Today, there are hundreds of EB-5 Regional Centers (and more emerging every day) around the United States. Since March 15, 2022, when the EB-5 Reform and Integrity Act of 2022 (“RIA”) was enacted, requirements for a previously approved or new regional center must undertake new compliance requirements. Selecting the right one is very important and requires an understanding of how each EB-5 Regional Center functions.

Basic Questions for every EB-5 Investor to Consider


As a potential investor, the following is provided to allow you to understand some of the basic legal requirements for the EB-5 program in general:

How to qualify to be an investor?

Can I bring my family with me?

What financial documentation will I need?

What personal documentation is required?

Where to invest?

How to Qualify to be an Investor

Business Establishment

Establish a new commercial enterprise by creating an original business, purchasing an existing business or reorganizing the business such that a new commercial enterprise results. Or, if the investment is in a Regional Center that has been designated by the U.S. Immigration Service, by investing in a regional center project.

Investment

Investors who have invested or are actively in the process of investing at least $800,000 or $1.05 million in a new commercial enterprise. Many Regional Center investments typically require that your funds be released upon the filing of your I-526E. In this scenario, the escrow agent will not release your funds to the Regional Center until your initial I-526E petition has been receipted by the U.S. Immigration Service.

Job Creation

EB-5 investors must qualify by making their capital contribution to a U.S. commercial enterprise which will benefit the United States economy and create at least 10 qualified jobs as a result of one or more of the following: (a) full-time employment for 10 directly employed employees such as U.S. citizens, permanent resident workers, or other certain authorized workers; OR (b) indirect and/or induced employment, if allowed, as determined by a reasonable job creation methodology support by an economic impact analysis.

Lawful Source of Funds

Prove that the investment funds were derived from a lawful source of funds, for example personal income, work salary, dividends, sale of property, or even the proper collateral if funds were derived from a loan. Hence, the type of documentation needed will be determined based on the financing structure that you utilize.

Financial Documentation to Prove Lawful Source of Funds

The U.S. Immigration Service requires that investors demonstrate that their assets were gained in a lawful manner. This requires the investor to prove that their investment funds were obtained through lawful business, salary, investments, property sales, inheritance, gift, loan, or other lawful means. This may be accomplished through certificates by the investor’s licensed accountants, lawyers, court records, salary statements, tax statements, real estate documents, including:

  • Profit and earnings from a business
  • Profits or proceeds from the sale of real estate
  • Profits or earnings from stock or other investments.
  • Bank statements
  • Investment account statements
  • Documents showing ownership in real estate or a company, accompanied by an appraisal of value and registration of ownership, loan or mortgage, promissory note, security agreement, or other evidence of borrowing which is secured by assets of applicant.
  • Tax returns from the last seven (7) years. (If applicable)

Personal Documents, in general, Needed for an EB-5 Petition

In addition to financial documents, the foreign investor must provide the following documentation:

● Legible copies of passports (including blank pages). Passports must be valid for at least 6 months from the date the visa is expected to be issued. This requirement applies to the foreign investor’s spouse and children (under the age of 21 at the time of application) filing for a green card through this program.

● Investor’s Resume (Curriculum Vitae) which should include personal and contact information, educational background, professional experience, and employment history (please include name of supervisor and company’s address and phone number).

● Investor’s personal narrative in their own words describing how they obtained the funds.

● Copies of academic diplomas.

● Articles of organization (if owner of a company).

For Green Card or Immigrant Visa Processing (Not needed for initial phase):

● Certified copies of birth certificates, copies of marriage certificates, and/or divorce decrees and death certificates, if applicable.

● Certified copy of any military record should be submitted.

● Certified copy of police record from the city where the applicant has resided for at least 6 months since turning 16. These records may include but not limited to information on former arrests, crimes, court, regardless of amnesty, pardon, or other clemency.

NOTE:There may be additional documentation requested prior to filing depending on an individual case-by-case basis, and as required by any change to USCIS or U.S. Department of State policies and regulations.

Can my spouse and children also receive “green cards” under the EB-5 visa program?

Yes. Your spouse and children (under 21 years old) are eligible for the conditional immigrant visas. No separate investment is required apart from your initial investment of $800,000 or $1.05 million. Additionally, under the U.S. law called the Child Status Protection Act or CSPA, your children who are close in age to 21 years old can have their age frozen by the government when their petitions are filed and pending. It is important to review these issues with our law firm if your children are approaching 21 years of age.

Investor Suitability 

To be eligible as an investor for certain projects, you must meet the criteria of an “accredited investor” as stipulated by U.S. Securities Law. This law outlines the qualifications for investors who are permitted to invest in specific types of high-risk investments, limited partnerships, among others. In the U.S., an individual is classified as an “accredited investor” if they have a net worth of at least $1 million, or if they have had an annual income of at least $200,000 for the past two years ($300,000 combined with a spouse if married).

Under the Regional Center Program, regional centers are obligated to ensure that they only accept investments from qualified individuals. As part of this process, they must obtain a certification letter confirming your accredited investor status. Once you have chosen an EB-5 project, and your funds are placed in escrow with the project, additional documentation will be provided to you for your filing. HarrisLaw, P.A. will facilitate communication with your selected project on your behalf to request the necessary qualifying information.

How to Select an EB-5 Investment

Selecting the right one is very important and requires an understanding of how each EB-5 Regional Center functions. In addition to consulting our firm for a qualified immigration attorney, investors should consider:

● Seeking independent qualified financial advice;

● The reputation of the regional center and project developer;

● The past business success of the developer who is receiving the loan or equity investment from the regional center-affiliated entity;

● The ability of the new commercial enterprise to receive credit from the project developer’s ability to create the requisite amount of jobs required by the EB-5 program;

● Other due diligence factors; and

● The immigration history of the EB-5 Regional Center, in terms of its ability to secure the approval of investor petitions (called the I-526E) and the removal of the conditions on an investor’s permanent residence (called an I-829).

Requirements for Conditional Residents

If you are lawfully present after being admitted as a nonimmigrant you may apply for your green card at the same time you file your I-526E petition. If you are an investor outside the U.S., you will need to need to apply for a permanent immigrant visa at a U.S. Consular Section. Once admitted for permanent residence, an investor and their family can obtain resident status for 2 years as a provisional or conditional resident.  Within 90 days of the expiration of an EB-5 investor’s conditional permanent residence a second petition called an I-829 petition must be filed. Under USCIS policy, upon the filing of the I-829 petition it may no longer be required for an investor to sustain all of their investment in the NCE. However, due to changes in the the impact this may have is still being decided.

In cases of investments made through a Regional Center project, the Regional Center will be responsible for providing you and your family with the documentation necessary to file the petition to remove the conditions on your green card. This is another important difference, or benefit, in choosing a Regional Center investment or another privately-managed pooled investment structure. If you create your own business, as the owner you will be tasked with the burden of collecting payroll records.

In order to achieve full permanent residence, an EB-5 investor is required to have maintained their investment by not withdrawing their capital contribution. Most important is continuing the objectives of the proposed business plan submitted to USCIS. Most business plans require financial and job creation forecasts based on the type of business structure that you, the EB-5 investor, initially invested in.

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