Congress enacted the EB-5 (Employment-Based Fifth Category) immigrant visa category for aliens seeking to enter U.S. to engage in a commercial enterprise that will benefit the U.S. economy and create at least 10 full-time jobs. As a general rule, the immigrant must invest at least $1,000,000, although the amount may be $500,000 if the investment is made in a “targeted employment area.”

Conditional Green Card for 2 Years:  If an EB-5 application is approved, the alien becomes a conditional permanent resident for 2 years. In effect, through his investment, the alien and his family can secure a temporary green card. After 2 years, the person and his family file to remove the condition just as an alien who marries a U.S. Citizen needs to file to remove the condition after two years. If he/she has satisfied the conditions, then he and the family will receive a permanent green card.

Regional Center: If you invest in an USCIS-approved regional center, you do not need to directly create 10 full-time jobs. The requirement of creating at least 10 new jobs is met by a showing that as a result of the new enterprise, such jobs will be created directly or indirectly through revenues generated from job creation. In effect, if you invest in USCIS-approved regional center, only a creation of a few jobs may meet the 10 job requirement because increase in a few jobs also leads to indirect job gains, the sum of which equals at least 10.  A regional center is an investment opportunity for which USCIS will credit certain indirect as well direct employment creation as a result of your investment towards the 10 jobs your investment must create for the approval of an EB-5 petition. Currently, there are more than 20 nationally and there are regional centers in the state of Washington.  The Regional Center Program is due to sunset very soon, and there is no legislation to revive this program as of yet.

Requirements: $1m (or $500k) and 10 Full-Time Employees:  

You must invest $1 million in the regional center. If the regional center is also in “targeted employment area” then the investment may be only $500,000. “Targeted employment area” is defined as a rural area or an area that has an unemployment rate at least 150% of the national average. An experienced immigration attorney will be able to work with a designation official in the state.  This is extremely time-consuming process, and be prepared pay the extra attorney fee.

The investor must document that the capital invested has been legally obtained. Proving the source of investment money can be time-consuming.  It will depend on how  the alien’s home country  keeps track of their citizens’ tax payments.  One should endeavor to obtain such documents as tax payments, business registrations, real estate sales documents, etc., to prove the source of investment.  There is a wide misconception that the money must come from abroad.  If an EB5 applicant has lived in the U.S. for several years and has already transferred substantial sum over to the U.S., and the legal sources of those funds can be proven, one can use the money already in the U.S. to go toward the EB5 investment.

Pooled Investment Arrangements:   Unlike E2s, there is no requirement that the foreign national be involved with the active management and control of the investment business. S/he can be a passive investor.   One may consider going into pooled investment arrangements where an experienced business person with a viable business project (hotel, restaurant chain, etc.) gathers a group of investors.  E.g.  If it is a restaurant chain which projects to employ 30 employees with 5 restaurants, there can be at least 3 EB5 investors.  The business entity will often take forms of limited liability companies (LLCs) or limited partnerships (LPs).  LLCs are preferred business entity mechanisms among many experienced business attorneys.  They have the benefit of having the corporate liability protection and the tax benefits of single taxation (as opposed to the corporate double-taxation).  They are also flexible in that the members (the constituents are called members rather than shareholders or partners) can be foreign nationals, another entity, etc.  LPs are outdated now.  Such pooled arrangements allow one to have the benefit of being part of a bigger project, thus increasing the potential of higher return and having an experienced person initiate and manage the project.  One will often receive smaller ownership in such cases in return for the benefits of being a passive owner and making the EB5 hurdle easier. 

Flexibility of EB5:  Aliens can invest the required amount alone, create the qualifying business with another immigrant investor, or even create the business with US citizens or other people not seeking classification as an immigrant investor. In such cases, each person seeking classification as an immigrant investor must have invested the required amount, but each person can use the same employees to reach the required 10 new positions.

The Process:  The alien entrepreneur petitions for himself for EB5 on an I-526.  The adjudication process of I-526 is taking about 8 months currently.  This may be delayed if there is a request for evidence and time needed to respond to such a request.  After I-526 is approved, depending on whether the applicant is in the U.S. or abroad, s/he can adjust the status (if in the U.S.) or consular process.  As in most cases, adjustment of status process is easier than consular processing.  This is why an experienced immigration attorney will first petition for an E2 visa using the investment and then apply for I-526.  Once one files I-526, the consular posts are likely to deny E2 visas.  With the approved E-2 visa, the applicant can enter into the U.S. after the I-526 has been approved to apply for an adjustment of status (I-485).   The adjustment of status is taking about one year currently. Applicants who need to travel outside the U.S. should apply for Travel Documents (I-131) which are taking about 4 months.  The applicants should plan on staying in the U.S. for 4 months.  If one is already in the U.S. on another non-immigrant visa such as L, H1B, E1/E2 on another business, then there is no need to apply for the E2 visa as mentioned above.  If the I-526 is absolutely bullet-proof, i.e. the requirement investment sum was invested and 10 full-time employments were created from the beginning, then consular processing may be an option.  However, note that some consular posts are extremely reluctant to approve EB5 immigrant visas and likely to readjudicate the whole I-526 application.

Aging Out Children:  In many instances, the parents will decide to do EB5 for the sake of their children.  There is law called Child Status Protection Act.  This law basically tries to save the children who are turning 21, hence losing the “child” status by deducting some time during which they await the adjudications of some applications and petitions.  The law is fairly complicated.  The simplest way to think of it is, if you have children who are turning 21 soon, you should file the I-526 before the child turns 21 so that he can get a green card as your dependent.  

Importance of Maintenance of Your Legal Status:  Many mistakenly believe that once they have applied for a green card, they can live, work, study in the U.S. until they are given the green cards.  This assumption is wrong.  One has to maintain legal status while waiting for a green card.  One does not even need to be in the U.S. and apply for I-526 and wait at their home country.  If one is already in the U.S., one must enter into the U.S. on a legal visa.  This is when I advise my clients to consider getting E2 visas on the EB5 investment.  One difficult part in obtaining the E2 is if one is a minority owner of the business (such as in pooled investment cases).  In such cases, one can apply as a supervisory/executive employee of the U.S. business rather than as a principal investor. Please refer to my discussion on E2 visa.  

New Regulation:  The regulations governing EB5 were revised to include this important requirement: the alien must establish a business or invest in an existing business that was created or restructured after November 19, 1990. This is much of a relaxed rule.  Before the change, the regulations required that the business must be a newly created business.  However, this rule does not undo the 10 full-time employee creation requirement.  

EB5 Approval Rate:  In the mid-1990s, there were many abuses of the EB-5 program, so CIS approved few, if any regional center EB-5 petitions from 1998 until late 2003.

Condition Removal:  You must prove that you invested the required amounts in the USCIS-approved regional center, that that commercial enterprise was established, that it created directly or indirectly 10 full-time jobs, that you have continuously maintained this investment during the 2 year period and, if some of the jobs you count toward the 10 are indirectly created, that the regional center is still approved by USCIS.

10 Full-Time Employment Creation:  The EB-5 Visa investment must create at least 10 full-time jobs for US citizens, lawful permanent residents or other immigrants lawfully authorized to be employed in the United States. Full-time employees are defined to include workers working at least thirty-five hours per week. This includes conditional residents, temporary residents, asylees, refugees, and recipients of suspension of deportation, but does not include nonimmigrants. In calculating the required number of employment positions, the investor may not include spouses or children, but may include other family members who are employed by the business.

The 10 positions must be full time. This means employment of a qualified employee in a position that requires a minimum of 35 working hours per week. Although two employees may share a full-time position, part-time employment is specifically excluded. Therefore, a combination of two or more part-time positions will not qualify, even if they collectively meet the 35-hour per week requirement.

Evidence Supporting the EB5 Petition:

Evidence to show that a new commercial enterprise has been established, such as articles of incorporation, business license, or evidence of the transfer of the required amount of capital when purchasing an existing business.

Evidence that the proper amount of capital has been placed at risk, such as bank statements showing the deposit of funds into the business's account, evidence of equipment purchased for use in the business; evidence of property transferred to the business, and evidence of money transferred to the business in exchange for shares of stock. This stock cannot include terms requiring the business to redeem the stock at the holder's request.

Evidence demonstrating that the capital invested was lawfully gained, such as foreign business registrations, tax returns, or certified copies of criminal or civil judgments, where appropriate.

Evidence that the investment has created at least ten full-time jobs, such as tax records, Forms I-9, or if employees have not yet been hired, a detailed business plan demonstrating that the nature of the business will require the hiring of ten employees within two years. If the business is a troubled business, the applicant must submit evidence that the currently existing number of employees will be maintained for at least two years.

In cases where the full requisite $1m or $500k has not been invested or 10 full-time employees have not been hired, one may submit I-526 with a very logical and realistic business plan.  One may get a Request for Evidence, however, in such cases, where there are children nearing 21, it might be a good idea to submit the I-526 to buy time.

Condition Removal After 2 Years:  If the application is granted, the alien is given conditional permanent residence and after two years is eligible to file for removal of the conditions. The alien must also show that he or she "sustained the actions required for removal of the conditions" during his or her residence in the United States. An alien entrepreneur will have met this requirement if he or she has "substantially met" the capital investment requirement and has continuously maintained this investment during the conditional residence period. The entrepreneur's residence may be terminated at the end of the two-year period or earlier if it is found that the business was not established, or was established solely to evade immigration laws or that the requirements were otherwise violated. If, in the application to removed conditions, the alien demonstrates that the business was established, that the required amount of capital was invested, and that 10 full-time jobs either have been or will be created, the conditions will be removed and the alien granted full permanent residence.