Q&A for EB-5 Visas

Q&A for EB-5 Visas

• What is an EB-5 Visa?

The EB-5 Visa, also known as the Immigrant Investor Program, is an immigration visa category that allows foreign investors to obtain a U.S. green card (permanent residency) by making a qualifying investment in a commercial enterprise in the United States. The U.S. government created the EB-5 Immigrant Investor Program in 1990 in an effort to attract foreign investment and boost economic growth. Upon approval, the investor and their immediate family members (spouse and unmarried children under 21) receive conditional permanent residency (green card) valid for two years.

• What is the investment requirement for an EB-5 Visa?

To qualify for an EB-5 visa, an investor must make a capital investment in a new commercial enterprise in the United States. The investment must generally be at least $1,050,000. However, if the investment is made in a Targeted Employment Area (TEA) – which is either a rural area or an area with high unemployment – the minimum investment amount is $800,000 (including infrastructure projects). Prior to 2022, the EB-5 investment amount was $500,000 for projects located in TEAs and $1 million for non-TEA projects. The investor must demonstrate that the funds invested were obtained lawfully. Documentation supporting the lawful source of funds is required as part of the EB-5 application process.

The minimum investment amounts by filing date and investment location are:

Source: https://www.uscis.gov/policy-manual/volume-6-part-g-chapter-1

• Where should the investment be made?

The investment must be made in a for-profit entity formed for the purpose of conducting lawful business activities. This can include a corporation, partnership, or sole proprietorship. The investment must be made in a new commercial enterprise that is located within the United States. This means the business entity must be legally established and conducting business activities in one of the 50 states, the District of Columbia, or certain U.S. territories. The EB-5 investor can choose to make a direct investment into a new commercial enterprise, where they have a direct role in managing the enterprise and creating jobs, or through a USCIS-designated Regional Center. Regardless of whether the investment is made directly or through a Regional Center, the investment must create at least 10 full-time jobs for qualifying U.S. workers within two years of the investor’s admission as a Conditional Permanent Resident (CPR).

• What are the job creation requirements for EB-5 Visas?

Each EB-5 Visa investment must create at least 10 full-time jobs for U.S. workers, lawful permanent residents, or immigrants authorized to work in the United States. Job creation must occur over a period of two years. By pooling funds with other investors in a Regional Center, investors receive the benefit of indirect job creation.

• What are the management or policy role requirements of the EB-5 Investor?

The EB-5 investor must be engaged in the management of the new commercial enterprise either through day-to-day managerial control or through policy formulation. This can be demonstrated by being involved in the enterprise as a corporate officer, board member, or holding other similar management roles.

• What is the “At-Risk Requirement” for EB-5 Visa?

The “at-risk” requirement for the EB-5 visa program specifies that the investor’s capital must be invested in a manner that presents the possibility of both profit and loss. The invested capital must be subject to commercial risk and the investor must be able to demonstrate that the capital is at risk of loss with no guarantee of return on investment. The investment must be at risk of loss and cannot be secured by the assets of the enterprise, except those used for normal operational purposes.

The invested funds must be used for the operation of the new commercial enterprise, such as purchasing equipment, hiring employees, leasing office space, or other lawful business activities that contribute to the creation of jobs. The investor must have a policy-making role or be engaged in the day-to-day management or operations of the enterprise. This active involvement helps demonstrate that the investor’s capital is genuinely at risk. As part of the EB-5 visa application process, the investor must provide documentation to demonstrate that their capital investment meets the at-risk requirement. This typically includes bank statements, wire transfer records, business contracts, and other financial documents that prove the source and use of funds.

Overall, the at-risk requirement ensures that the EB-5 visa program attracts investors who are willing to make genuine investments in U.S. businesses with the potential for both profit and loss, contributing to economic growth and job creation in the United States.

• What are EB-5 Regional Centers?

EB-5 Regional Centers are organizations authorized by United States Citizenship and Immigration Services (USCIS) to receive and manage EB-5 investor funds. Regional Centers promote economic development and job creation within a specific geographic area. These areas are typically targeted for development and job creation. Regional Centers often operate in Targeted Employment Areas (TEAs), which are designated areas with high unemployment rates or rural areas.

• Can an investment be made through Regional Centers?

Investors can choose to invest in a new commercial enterprise through an EB-5 Regional Center. This is also known as an indirect investment. Unlike direct investments, where the investor is directly involved in managing the enterprise, investments through Regional Centers allow for a more passive investment approach. EB-5 Regional Centers manage the pooled investment funds from multiple EB-5 investors. They typically allocate these funds towards specific projects or enterprises that aim to create jobs and stimulate economic growth in the designated area.

Investments made through EB-5 Regional Centers can count indirect job creation towards the job creation requirement. Indirect job creation includes jobs generated through the economic impact of the enterprise on the local economy, such as jobs created in supplier businesses, service providers, and other related industries. Investing through a Regional Center can offer EB-5 investors advantages such as indirect job creation calculation, reduced involvement in day-to-day management, and potentially lower risk compared to direct investments.

• What are the differences between direct investment versus regional center investment?

In the EB-5 program, investors can choose between direct investment, where they invest directly in a new commercial enterprise, or investing through a regional center, a government-approved entity that pools capital for multiple investors. 

Direct Investment:

• Definition: Investors directly invest in and manage a new commercial enterprise (NCE). 
• Job Creation: Investors are responsible for creating 10 jobs, each lasting at least two years, for US workers. 
• Control: Investors have more control over the business and its operations. 
• Investment Amount: Minimum investment is $800,000 in a Targeted Employment Area (TEA), or $1,050,000 outside of a TEA. 
• Example: An investor opens a restaurant and hires 10 employees. 

Regional Center Investment:

• Definition: Investors invest in a project through a regional center, which is a government-approved entity that pools capital from multiple investors. 
• Job Creation: Investors can count direct, indirect, and induced jobs towards the 10-job requirement. 
• Control: Investors have less control over the business and its operations, relying on the regional center’s management. 
• Investment Amount: Minimum investment is $800,000 in a TEA, or $1,050,000 outside of a TEA. 
• Example: An investor invests in a real estate project through a regional center, which creates jobs through construction and related businesses. 

Key Differences:

• What is “Conditional Permanent Residence”?

Initially, investors and their families receive conditional permanent residence for a period of two years. To remove the conditions and obtain permanent green cards, investors must file Form I-829 and demonstrate that the investment and job creation requirements have been met. Like all immigrant visa applicants, EB-5 investors and their family members must meet admissibility requirements, which include passing a medical examination and demonstrating they are not inadmissible for reasons such as criminal history or health issues.

• What are the Forms to be filed for EB-5 petition?

Listed below are the forms that need to be filed for an EB-5 petition, including several documents that are submitted to the USCIS:

• Form I-526, Immigrant Petition by Alien Investor:
  • This is the primary form used to petition USCIS for an EB-5 visa. It demonstrates that the investor is eligible and has invested or is actively in the process of investing the required capital into a new commercial enterprise that will create full-time positions for at least 10 qualifying employees.
• Form I-485, Application to Register Permanent Residence or Adjust Status:
  • If the investor is already in the United States in a lawful nonimmigrant status, they may file Form I-485 to adjust their status to that of a lawful permanent resident (green card holder) after USCIS approves the Form I-526 petition.
• Form I-829, Petition by Entrepreneur to Remove Conditions:
  • After the investor has maintained the investment and job creation requirements for the conditional residency period (typically 2 years), they must file Form I-829 to remove the conditions on their permanent residency and obtain a permanent green card.
• Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program:
  • If the investor is investing through a USCIS-designated Regional Center, the Regional Center must file Form I-924 to seek USCIS designation and approval. This form is not filed by individual investors but is crucial for projects involving Regional Centers.
• Form I-924A, Annual Certification of Regional Center:
  • USCIS-designated Regional Centers must file Form I-924A annually to demonstrate continued eligibility for the regional center designation and compliance with the EB-5 program requirements.
• Form G-28, Notice of Entry of Appearance as Attorney or Accredited Representative (if applicable):
  • This form is used to officially designate an attorney or accredited representative who will represent the investor in their immigration matters.

In addition to these primary forms, various supporting documents and evidence are required throughout the EB-5 process, including but not limited to:

• Proof of investment in the new commercial enterprise (bank statements, wire transfer records, etc.)
• Documentation showing the establishment of the new commercial enterprise
• Evidence of job creation (payroll records, employee documentation, etc.)
• Evidence of lawful source of funds for the investment (personal and business financial documents, tax returns, etc.)
• Any additional documentation requested by USCIS to verify the investor’s eligibility and compliance with EB-5 requirements.

The EB-5 petition process can be complex, and it is highly recommended for investors to work closely with an experienced immigration attorney who specializes in EB-5 visas to ensure all forms are completed accurately and all required documentation is properly submitted.

Somireddy Law Group PLLC offers customized and client-oriented services to assist you with preparing and filing your EB-5 petition. Please feel free to reach out to us at: info@somireddylaw.com to schedule a consultation on the EB-5 process and options for the source of funds. We provide strategic guidance to work with you on your EB-5 petition.