Employment Fifth Preference (EB5) – Immigration through Investment

Overview of the EB-5 Investment Visa:

In 1990, the United States Congress created the EB-5 investment or employment creation immigrant visa under which foreign entrepreneurs who invest a certain amount in the United States can become permanent residents.

The EB-5 classification makes up to 10,000 visas available annually for foreign nationals, and allows them to live and work on a permanent basis in the United States with their spouse and unmarried children under the age of 21.

Requirements of the EB-5 Investment Visa:

If you are considering making a capital investment in the United States, you have two major options to choose from.

Under the EB-5 classification, foreign investors who invest at least $1 million in a new or existing commercial enterprise and create at least 10 jobs for American workers qualify under this category. On the other hand, under a pilot program involving a USCIS designated regional center, if the enterprise is located in either a rural or a high unemployment area, the investment is reduced to $500,000.

The capital investment need not necessarily be in the form of cash. The regulations allow investments in the form of inventory, equipment, secured indebtedness, tangible property, or cash equivalents. In addition, the valuation of the investment is based on U.S dollar fair-market value.

Thus, an investment can be made directly into a job-creating commercial enterprise –new or existing “Troubled Business” – or into a USCIS-designated “Regional Center,” which assumes the responsibility for job creation. A regional center is defined as:

  • An entity, organization or agency that has been approved as such by the Service;
  • An entity that focuses on a specific geographic area within the United States; and
  • An entity that seeks to promote economic growth through new job creation, increasing capital investment domestically, expanding export sales and stimulating improved regional productivity.

The individual investment option requires that the individual find his own investment project, design his own business plan and take a direct managerial role in overseeing his investment project. Therefore, this option is the best for those who wish to take direct control of their investment. Conversely, the regional center option is best for those who are investing for the purposes of acquiring the green card rather than maximizing the return on their investment.

For more information of the Regional Centers located in your state, please visit www.uscis.gov

For purposes of the EB-5 classification, the potential investor ought to be aware of the definition of a “commercial enterprise,” defined as any for-profit activity formed for the ongoing conduct of lawful business. This does not include a non-commercial activity such as owning and operating a private residence. Some examples include:

  • A sole proprietorship
  • Partnership (whether limited or general)
  • Holding company
  • Joint venture
  • Corporation
  • Business trust or other entity, which may be publicly or privately owned

Standard for Eligibility Under the EB-5 Classification:

As stated above, the EB-5 classification makes up to 10,000 visas available annually for foreign nationals, and allows them to live and work on a permanent basis in the United States with their spouse and unmarried children under the age of 21.

An eligible foreign national is a person who has invested, or is actively in the process of investing, the requisite amount of capital into a new commercial enterprise or regional center and in accordance with the regulations of the EB-5 classification. Another requirement is that they must prove that the capital investment will benefit the United States economy and create the required number of fill-time jobs:

The criteria for eligibility for the EB-5 classification is as follows:

  1. The person must establish a new commercial enterprise by:
    1. Creating an original business,
    2. Buying or purchasing an existing business and then reorganizing or restructuring it in order to create a new commercial enterprise, or
    3. Expanding an existing business by 140 percent of its net worth or the initial (pre-investment) number of jobs, or retaining the existing jobs in a troubled business enterprise that has lost at least 20 percent of its net worth in the past one to two years; and
  2. The person must have invested, or actively be in the process of investing, in a new commercial enterprise:
    1. A minimum of $1 million, or
    2. A minimum of $500,000 if investing in a “Targeted Employment Area” (TEA) – defined as an area with an unemployment rate of at least 150 percent of the national average, or a rural area as designated by the Office of Management Budget (OMB)
  3. The investment in a new commercial enterprise will benefit the United States economy by:
    1. Creating full time jobs for at least 10 qualified individuals, or
    2. If the investment is being made in a “troubled business,” then by maintaining the number of existing employees at the pre-investment level for at least two years

Procedural Steps To Obtain Immigrant Investor Status:

Filing Form I-526 (Immigrant Petition by Alien Entrepreneur) along with supporting documentation proving that the foreign national investor meets all the requirements of this classification:

  • Establishing a new commercial enterprise,
  • Investing the required capital amount,
  • Creating the required number of jobs for qualified individuals,
  • Proving the lawful source of funds for the investment,
  • Demonstrating the active participation of the investor in the business, and
  • Creating employment within a TEA, if applicable.

After approval of the I-526, the foreign national can now file Form I-485 (Application to Register permanent Residence or Adjust Status), if residing within the United States, to obtain status as a conditional resident. If the foreign national is located abroad, he or she can apply for an immigrant visa at the U.S. Consulate in their jurisdiction.

Finally, to remove the two-year conditional residency, the investor is required to file Form I-829 (Petition by Entrepreneur to Remove Conditions) within 90 days of the second anniversary of the foreign national’s admission into the United States as a conditional resident.