The United States offers one of the world’s best business-friendly environments and the largest customer base for foreign investors. This explains why a substantial number of businesses in the country are owned by immigrants. Since its creation in the early 1990s, the EB-5 Immigrant Investor Program has provided a unique pathway for foreign business owners to permanently reside in the U.S. and invest in a thriving U.S. commercial enterprise. The EB-5 visa may be your best bet if you are looking for a route that offers fast-track permanent resident status and business opportunities.
What Is the EB-5 Visa?
The EB-5 visa is the fifth preference category of the U.S. employment-based visa program. Foreign national investors can apply to become permanent residents in the U.S. by making capital investments that stimulate the U.S. economy and create at least ten full-time jobs for U.S. workers. In other words, if you can successfully invest in a new U.S. business, you can obtain a green card.
U.S. Congress first introduced the EB-5 immigrant investor visa in 1990, and in 1992, an additional program was added allowing indirect investments into designated Regional Centers; on March 15, 2022, the EB-5 Immigrant and Reform Act was signed into law, reviving the EB-5 visa program, establishing new investment amounts and requirements for the Regional Center program. So, let’s break down the newly revised Immigrant Investor Program, better known as the EB-5 visa.
Meeting Eligibility Requirements
To be eligible for the EB-5 visa, you must be able to invest in a new commercial enterprise, defined as any for-profit activity formed for the purpose of conducting ongoing lawful business.
The rules specifically qualify that the enterprise must be established after November 29, 1990, or established on or prior to it being purchased and restructured like a new commercial enterprise or expanded through investment leading to a minimum 40% increase in net worth or employee count.
A lawfully established commercial enterprise can be formed as a:
- Sole proprietorship
- Holding company
- Joint venture
- Limited or general partnership
- Business trust
- Other public or privately owned entity
How Much to Invest?
The EB-5 visa demands a significant investment amount. You must dedicate a minimum capital investment of $1,050,000, either as a direct investment into your commercial enterprise or as an indirect investment into a Regional Center (more on that below). The minimum investment amount is reduced to $800,000 if you invest in a designated Targeted Employment Area (TEA). Targeted employment areas are generally rural areas or areas with a high unemployment rate (meaning at least 150% of the national average). Due to the reduced capital requirement, most Regional Centers tend to also operate in a Targeted Employment Area (TEA).
This investment requirement is effective for petitions filed after March 15, 2022. (For petitions filed prior, the minimum capital investment is $1,000,000, and $500,000 for TEA investments).
Adjustments to the investment amount will be relative to inflation using the Consumer Price Index for All Urban Consumers (CPI-U) and will occur every 5 years beginning with petitions filed on or after January 1, 2027.
Source of Capital
As the investor, you must establish to USCIS that the investment capital comes from a legal source and is lawfully owned by you. The capital can include cash, real or personal property, or other mixed tangible assets controlled and owned by the investor. Among other exclusions under the EB-5 program, the definition of capital does not include capital invested in exchange for a note, bond, convertible debt, obligation, or any other debt between the immigrant investor and new commercial enterprise, or capital invested with a guaranteed rate of return on the amount invested or a contractual right to repayment.
The EB-5 visa requires the new commercial enterprise to create at least ten full-time jobs in the United States, no less than within two years of approval. Qualified employees include U.S. citizens, green card holders, or other U.S. immigrants who hold work permits. It does not include the investor’s family members or anyone with nonimmigrant status, or other individuals unauthorized to work.
Direct Management of Enterprise
When you apply as a standalone investor, you’re 100% responsible for your investment. Hence, you’ll need to research to identify a good new commercial enterprise in the US to invest in.
You will need to be in the US during your EB-5 visa validity period to manage the business’s day-to-day activities. Alternatively, you can manage it by formulating a working policy.
You must develop a good business plan to create and preserve jobs. As a result, there’s so much work, but it’ll save you administration and filing fees. Furthermore, since you are in charge of the business, you can see that you reach your goals in the shortest time possible.
Indirect Investment: Regional Centers
You can apply via a regional center if you don’t want direct management of your investment. Regional centers are facilities designated by the USCIS for the Immigrant Investor Program. You can check the USCIS website for the list of approved regional centers.
When you apply via a regional center, you won’t have 100% control of your investment compared to when you apply directly. However, applying via a regional center is less intricate since you have fewer responsibilities. It’s an ideal option if you have other businesses to handle and don’t have much time for the day-to-day running of your EB-5 investment.
The regional centers will see that your investment is put into a good business plan and that it creates sufficient jobs as demanded by the USCIS. Nevertheless, you must still meet the same eligibility requirements and pay the same processing fee as when applying as a stand-alone investor.
How to Apply for the EB-5 Visa
To get the EB-5 visa, you must first file a petition as a standalone investor if you want direct management of your enterprise. You do this by filing Form I-526. On the other hand, if you’re making an indirect investment via a regional center, the center will file a petition on your behalf with Form I-526E.
If the USCIS approves your Form I-526 or I-526E petition, you can start your immigrant visa application. You will need to file DS-260 if you’re applying from outside the United States. Applying from inside the US means you’re already on a visa. In that case, you’ll need to adjust your status to EB-5. You do that by filing Form I-485.
You become a conditional permanent resident when you get your visa or successfully change your status to EB-5. In other words, you’re eligible to become a permanent resident of the United States, but only if you fulfill the conditions of the EB-5 visa.
After two years of staying in the US as a conditional permanent resident, you can apply to become a full permanent resident by filing Form I-829. If you don’t fulfill the conditions of the EB-5 visa, you may be asked to leave the country.
EB-5 Visa Required Documents
Application for an EB5 visa requires relatively extensive documentation, especially when petitioning as a standalone investor. Generally, you must provide documents to show that you have invested or intend to invest in an eligible new commercial enterprise.
If you’re not applying via a regional center, you must provide proof that you will be in charge of the enterprise while in the US. Importantly, you must have evidence to back up your sources of income, as they must be legal.
The USCIS may request your foreign business registration records, tax returns, and certified copies of legal proceedings and actions involving money judgments against you. Notably, your evidence must be recent.
Job creation is a vital aspect of the EB-5 visa. As a result, you must provide a comprehensive business plan to prove that your investment will create up to 10 full-time jobs in the US. Furthermore, you must provide evidence that the enterprise will retain its existing employee capacity prior to your investment.
If your EB-5 application is successful, you must also provide extensive documentation when applying to remove the conditions on your permanent residency. This will include bank statements, contracts, licenses, tax returns, and others to back your investment. To show evidence of job creation, you’ll need to present your employees’ payroll records and relevant tax documents.
You can become a U.S. permanent resident by making a significant investment in the country’s economy via the EB-5 Immigrant Investor program. Upon approval, you, as well as your spouse and minor children, qualify for permanent residence in the U.S., which can lead to U.S. citizenship after 5 years of residency. It is always recommended to consult with an experienced and competent U.S. immigration lawyer to maximize your chances of a successful application process.
Immigration Attorney Maya Milovic is passionate about her immigration clients and dedicated to helping you achieve your American dream.
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