By: Michael Phulwani, Esq. and David H. Nachman, Esq.

EB-5 Investor Visa

• The USCIS administers the immigrant investor program, also known as EB-5. The EB-5 visa category was created by the United States Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors.

• Through the Immigration Act of 1990 Investor Visa program, Congress enacted the Immigration Act of 1990, which includes a program permitting foreign investors to obtain permanent residency in the United States.

What is EB-5?

• Section 121(b)5 of the Act created a new investor immigrant visa category aimed at generating a significant inward flow of foreign capital and creating jobs for United States workers. The new legislation makes 10,000 Green Cards of permanent residency available nationwide each year for qualified immigrant investors.

• The underlying policy of the EB-5 investor visa is to benefit the United States economy overall including United States communities that are economically disadvantaged, United States workers, and the foreign national investors. The goal of the EB-5 investor visa program is to generate a “win-win” scenario for all parties involved or affected.

Continued. . .

In order for an applicant to qualify under the EB-5 Investor Visa program three basic requirements must be met:

Investment in a new business.

Investment of at least $1 million (or $500,000 in certain cases) into the business.

Creation of employment for at least 10 full time U.S. workers.

What are the requirements of EB-5 Visa?

Two different option are available to Investor applicants for fulfilling EB-5 investment requirements:

Director Investment OR

Regional Center Investment

How does an investor make an EB-5 investment?

• Investment in a new business and creation of employment for at least 10 full time U.S. workers.

• The investment may consist of various forms of capital, such as cash (including a gift or loan), equipment, inventory, property, and other tangible equivalents. An investment amount of $1 million is generally the minimum. However, $500,000 is acceptable if the business is situated in a “targeted” employment area, i.e., one that has experienced unemployment of at least 150% of the national average rate or a rural area.

Direct EB-5 Investment

• Franchises• Restaurants• IT technology and/or services company• Retail products and/or services company• Car Wash/Trucking Company• Other businesses

Type of Direct EB-5 Investments

• Identification of a good business opportunity that has the potential to sustain itself and create and maintain 10 full time jobs over 2-3 years.

• Ability to run a business in the U.S. while on a B1/B2 visitors/business visa

• Getting approval for the I-526 Immigrant Petition by Alien Entrepreneur if only an EB-5 application is filed along with an EB-5 compliant business plan but no real operations in place.

• If business is started prior to filing I-526 then finding a competent and trustworthy manager or CEO since investor is in home country

Direct EB-5 Investments – Considerations

What is a Regional Center?• A Regional Center is any economic entity,

which is involved with the promotion of economic growth, improved regional productivity, job creation, and increased domestic capital investment.

Regional Center Investment

Apply to the USCIS for Regional Center approval and show:• How the Regional Center plans to focus on a geographical

region within the United States and promote economic growth in that region.

• How, in verifiable detail (using economic models in some instances), jobs will be created directly or indirectly through capital investments made in accordance with the Regional Center’s business plan.

• The amount and source of capital committed to the Regional Center and the promotional efforts made and planned for the business project.

• How the Regional Center will have a positive impact on the regional or national economy.

How does an entity become a Regional Center?

• Commercial development projects such as office buildings and hotels

• Mixed-Use developments such as restaurant, retail, office and residential complexes

• Re-development projects• Residential developments• Other infrastructure related projects

Type of Regional Center Investments

• Generally a loan-based model with no ownership of the project or everyday control and management (unless a direct equity investment wherein an investor applicant “buys” a share in the project)

• Low-risk project = Low or no return on investment• Investment capital at-risk and blocked for 5-6

years or more• Burden to create 10 full time US jobs is on

developer/borrower

Regional Center Investment – Considerations

• Regional Center team and track record• Current projects• Past projects• Position of EB-5 investor in relation to other lenders to the ‘project’• Financial viability of the project• Regulatory (SEC and FINRA) compliance• Regional Center’s relationship with the developer/borrower• Job Creation model for the project• Immigration compliant business plan• Economist report

Regional Center Investment – factors to consider

It is not sufficient that the investment is made out of lawfully generated funds, the intent to invest must be accompanied with the understanding that the capital must be at risk; hence there must be a risk of loss or a chance of gain. Any agreements or understanding between the commercial enterprise/new entity and the investor which state that the investment may be redeemed or assured return will not satisfy the requirement of the capital being at risk.

At Risk Investment

• Every EB-5 applicant shall be required to create or preserve* at least 10 full time jobs for qualifying US workers within two years i.e. during the period in which he has been granted Conditional Permanent Residency.

• These jobs can be direct or indirect; direct jobs are actual identifiable full time jobs for qualified employees (Full time employment means a minimum of 35 working hours per week for qualified employees meaning a US citizen, permanent resident or other immigrant authorized to work in the United States) within the commercial enterprise into which the EB-5 applicant has directly invested, whereas indirect jobs are jobs which are created collaterally due to the capital investment in an enterprise affiliated with a Regional Center.

Job Creation

• The procedure for obtaining an EB-5 Investor Green Card is best handled by a team of legal and financial/investment professionals who can help you navigate the various stages of the process.

• The investor submits an I-526 application, prepared by an experienced and licensed U.S. immigration attorney, accompanied by documentation to substantiate the source of investment funds.

• The funds can be the investor’s own money or in the form of a loan not secured by the EB-5 investment or a gift, which would allow a parent to gift the funds to a son or daughter.

What is the EB-5 process and timelines?

• After the investor completes their due diligence (preferably with the help of a licensed and EB-5 experienced U.S. financial/investment advisor and/or securities broker-dealer) on the EB-5 project or business, the investment is made and an investor I-526 petition is filed with USCIS, requiring USCIS to certify that the applicant and the investment are eligible for EB-5 status.

• The approval of the I-526 petition takes on average 12-14 months. Once USCIS approves the investor’s Green Card, it is conditional for a period of 30 months (two and a half years).

• Conditional Green Card status confers the same rights as the permanent unconditional Green Card.

Continued. . .

• Between 21-24 months after the conditional Green Card has been approved, the investor must reconfirm that the investment has been made or is still in place and that the employment requirement has been fulfilled or maintained.

• I-829 (Current Processing Time as on USCIS website – 11.4 months) The immigrant who has gained a Conditional Permanent Residency shall file this Form to remove the conditions on their Green Card along with the required filing fees. After being satisfied that enterprise fulfils the creation of 10 full time job requirement for the investor, the Green Card shall be granted to the applicant and his family.

Continued. . .

• Once the condition has been removed, an unconditional Green Card is granted for permanent resident status in the United States.

• From the time of application for the conditional Green Card until approval of the Removal of Conditions, is approximately four years.

• Thereafter, in approved Regional Center programs, depending on the terms of the agreement, the investment may be sold, and the investor will maintain the permanent Green Card.

Continued. . .

U.S. Citizenship is possible approximately two and a half years later (a total of five years after approval of the conditional Green Card), upon satisfaction of U.S. residence.

U.S. Citizenship

• Direct route to permanent residency in the United States for Investor, his/her spouse, and any children under the age of 21.

• Freedom for Investor and family to live, work, and retire anywhere in the United States.

• Investor and his/her spouse and children may attend college or university at U.S. resident costs.

• Investor and immediate family may travel to and from United States without a visa.

• Route to U.S. citizenship for Investor and immediate family after five years of permanent residency

• Investor receives all benefits of U.S. permanent residency status, including ability to develop and run his/her own business.

• Ability for Investor to sponsor green cards for family members

EB-5 Investor Visa Program Benefits

Please contact our office for further information:info@visaserve.com

201-670-0006 (ext 100)

http://www.visaserve.com

Questions?

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