EB-5 Immigrant Investor
USCIS administers the Immigrant Investor Program, also known as “EB-5,” created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under a pilot immigration program first enacted in 1992 and regularly reauthorized since, certain EB-5 visas also are set aside for investors in Regional Centers designated by USCIS based on proposals for promoting economic growth.
All EB-5 investors must invest in a new commercial enterprise, which is a commercial enterprise:
Established after Nov. 29, 1990, or
Established on or before Nov. 29, 1990, that is:
- Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or
- Expanded through the investment so that a 40-percent increase in the net worth or number of employees occurs
Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to:
- A sole proprietorship
- Partnership (whether limited or general)
- Holding company
- Joint venture
- Business trust or other entity, which may be publicly or privately owned
This definition includes a commercial enterprise consisting of a holding company and its wholly owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business.
Note: This definition does not include noncommercial activity such as owning and operating a personal residence.
Job Creation Requirements
Create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years (or under certain circumstances, within a reasonable time after the two-year period) of the immigrant investor’s admission to the United States as a Conditional Permanent Resident.
Create or preserve either direct or indirect jobs:
Direct jobs are actual identifiable jobs for qualified employees located within the commercial enterprise into which the EB-5 investor has directly invested his or her capital.
Indirect jobs are those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor. A foreign investor may only use the indirect job calculation if affiliated with a regional center.
Note: Investors may only be credited with preserving jobs in a troubled business.
A troubled business is an enterprise that has been in existence for at least two years and has incurred a net loss during the 12- or 24-month period prior to the priority date on the immigrant investor’s Form I-526. The loss for this period must be at least 20 percent of the troubled business’ net worth prior to the loss. For purposes of determining whether the troubled business has been in existence for two years, successors in interest to the troubled business will be deemed to have been in existence for the same period of time as the business they succeeded.
A qualified employee is a U.S. citizen, permanent resident or other immigrant authorized to work in the United States. The individual may be a conditional resident, an asylee, a refugee, or a person residing in the United States under suspension of deportation. This definition does not include the immigrant investor; his or her spouse, sons, or daughters; or any foreign national in any non-immigrant status (such as an H-1B visa holder) or who is not authorized to work in the United States.
Full-time employment means employment of a qualifying employee by the new commercial enterprise in a position that requires a minimum of 35 working hours per week. In the case of the Immigrant Investor Pilot Program, “full-time employment” also means employment of a qualifying employee in a position that has been created indirectly from investments associated with the Pilot Program.
A job-sharing arrangement whereby two or more qualifying employees share a full-time position will count as full-time employment provided the hourly requirement per week is met. This definition does not include combinations of part-time positions or full-time equivalents even if, when combined, the positions meet the hourly requirement per week. The position must be permanent, full-time and constant. The two qualified employees sharing the job must be permanent and share the associated benefits normally related to any permanent, full-time position, including payment of both workman’s compensation and unemployment premiums for the position by the employer.
Capital Investment Requirements
Capital means cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. All capital shall be valued at fair-market value in United States dollars. Assets acquired, directly or indirectly, by unlawful means (such as criminal activities) shall not be considered capital for the purposes of section 203(b)(5) of the Act.
Note: Investment capital cannot be borrowed.
Required minimum investments are:
General. The minimum qualifying investment in the United States is $1 million.
Targeted Employment Area (High Unemployment or Rural Area). The minimum qualifying investment either within a high-unemployment area or rural area in the United States is $500,000.
A targeted employment area is an area that, at the time of investment, is a rural area or an area experiencing unemployment of at least 150 percent of the national average rate.
A rural area is any area outside a metropolitan statistical area (as designated by the Office of Management and Budget) or outside the boundary of any city or town having a population of 20,000 or more according to the decennial census.
EB-5 Documentation List
EB-5 Lawful Investment Funds Documentation List
Please submit the following documentations in proving the Lawful Investment Funds.
An investor is highly recommended to prepare a personal statement introducing personal background and assets/capital acquisition process
Investment Funds is from your lawful income.
1. Five years of personal income tax returns
2. Personal bank account statement for the past a couple of years
3. Salary reports
4. Salary verification letter from previous employers
5. Five years of business income tax returns for your businesses if the income was generated from the operation of your businesses
6. Business registration documents and ownership if the funds is from the operation of your businesses
7. The articles of incorporation, share certificates and other like documentation of the business if the funds is from the operation of your business
8. Business bank account report for past a couple of years if the funds is from the operation of your business
Investment Funds is from gift.
1. Documentation proving the funds from the donor to the investor
2. Statement explaining the surrounding circumstances of the gift and why the gift was made
3. Gift tax return, if any
4. Documentation, such as personal/business income tax return and ownership of business, proving donor’s financial background to demonstrate how he/she derived the funds that were gifted
Investment Funds is from inheritance
1. Statement of the relationship between the investor and the decedent
2. A death certificate
3. Documentation of the investor’s receipt of the inherited funds
4. Certification of payment of inheritance tax, if any
5. If lack of documentation that would trace funds from the decedent’s estate to the investor, a statement of thorough explanation of the relationship, the amount inherited and other circumstances concerning the inheritance is required
Investment Funds is from transactions
Sale of business
2. Closing Statements
3. Bank account statements
4. Documentation tracing funds from the closing of the transactions to the investor’s individual account
5. Copy of the business registration before the sale and immediately after the sale
6. Letter from the accounting firm that represented the investor in the sale, indicating the sale, sale price, and the identity of the buyer
7. Business financial information, such as evaluation from certified accountant, proving the value of the business
Sale of real estate
1. Purchase agreement
2. Final settlement statement
3. Receipt of funds from the buyer to the investor
4. Payment of real estate tax obligations
5. Title transfer evidence
6. Past five years personal income tax return proving your funds in the purchase of the real estate that you sold
Sale of stock
1. Company’s incorporation documents, or other company registration documents
2. The share purchase agreement
3. Evidence of the transfer of the proceeds of the stock sale from the brokerage company to the investor’s account
4. Payment of tax obligations of the proceeds of stock sale
5. Stock transaction record
Investment Funds if from loan. (Only the loan secured by your assets other than the property of the commercial enterprise that you invested is eligible.)
1. Terms of the loan agreement
2. Documentations proving that the loan transferred from the lender to you
3. Lender’s business registration record, business income tax returns if the lender is a business; or personal income tax return if the lender is an individual.
4. Statement of the relationship between the lender and investor.
EB-5 Flow Chart
The EB-5 Visa Program
The Immigration Act of 1990 created the employment-based fifth preference, or EB5 immigrant investor category. Under the EB5 provisons, 10,000 visa shall be available each year to immigrants seeking to enter the U.S. for the purpose of:
1. Engaging in a new commercial enterprises
2. In which the immigrant has invested a qualifying amount of capital of not less than $500,000
3. Which will create at least 10 full-time jobs for persons other than the investor’s immediate family
The difference between $1,000,000 or $500,000 investment is that such investment is primarily doing business in a “targeted employment area” as specified in the immigration Service regulations. The investor is granted green card on a conditional basis for two years. Immigration service regulations provide the following additional details:
Engagement in Management
The investor must either be engaged in the day-to-day management of the business, or exercise control through policy formulation as a corporate officer or member of the board of directors. A limited partner will be considered to be sufficiently engaged in the management of a limited partnership.
The new enterprise may be a basis of petitions for more than one investor. However, each investor must invest the required amount and each individual investment must result in the creation of at least ten full-time jobs. The new business may be used as a basis of a petition even though there are other owners of the enterprises not seeking immigrant investor visas.
Investment in a New Commercial Enterprise
A qualifying business may be any for-profit activity formed for the ongoing conduct of business. Owing and operating a personal residence or non-profit enterprise does not qualify for a new commercial enterprise element.
There are two basic methods for showing investment in a new enterprise:
a. Investing an original new business after November 9, 1990; or
b. Investing in an business established before November 29, 1990 so as to either- Cause the restructuring or reorganization of the enterprises; or Expand an existing business through investment of the required amount so that a 40% increase in either the net worth or number of employees results so that the new net worth or number of employees is at 40% greater than it was before the investment.
Capital will be valued at fair market value in U.S. dollars. A capital contribution may include cash, equipment, inventory, and other tangible property, intangibles such as patents or copyrights are not considered capital under the regulations. Borrowed funds may be used as long as the investor is personally liable and the assets of the new enterprise are not used to secure the indebtedness.
To show that the investor has invested, or is actively in the process of investing, the regulations require that there by an actual commitment of the required amount of capital.
Required amount of capital
The standard investment amount capital is $1,000,000. A lowered investment amount of $500,000 is allowed for a rural area or an area that has experienced high unemployment. It should also be noted the the law set aside 3000 of the $10,000 visas each year for investors who invest in rural or high unemployment areas.
Source of fund Analysis
The EB-5 regulations require the investor to submit documentation clearly showing the lawful source of the capital invested in the enterprise. The invested capital must be the personal funds of the investor, as opposed to funds belonging to a third party or a business entity owned by the investor.
The investor may have acquired the funds invested in any lawful manner. The funds may have been obtained by the sale of a valuable asset owned by the investor, or by a loan secured by other personal assets owned by the investor. The funds may not be derived from a loan secured by the assets of the qualifying US enterprise.
The invested funds may have been received from another person by gift or inheritance. In the case of funds received as a gift from a third party, documentation must be submitted to prove the lawful manner in which that party acquired the funds.
The investment must create at least 10 new full time positions for U.S. workers. These job must be created within two years. If the ten employees have not been hired at the time of filing of the I-526 petition, the petition must be accomplished by a detailed business plan showing that ten qualified employees will be employed within two years. Independent contractors are not considered employees.
The job creation requirement may also be satisfied through an investment in a “troubled business” which results in the retention of jobs for at least two years at a level no less than the number of employees prior to the investment. A “troubled business” is on that has been in existence for at least two years and which has had a net loss of at least 20% of the business’s net worth.
Regional Designated Center Pilor program
To encourage immigration through the immigrant investor category, the U.S. Congress created the Designated Regional Center Pilot Program in 1993. The pilot program set aside 3,000 visas each year for people who invest the required amount of capital in a designated regional center. A Regional Center is an entity, organization or agency that has been approved as such by the United States Citizenship and Immigration Service which seeks to promote economic growth through increased export sales, imported regional productivity, creation of new jobs, or increased domestic capital investment.
A business established within a Regional Center is not itself required to employ 10 U S workers, as long as it is demonstrated that by participation in the regional center, the investor’s new business will indirectly create 10 or more jobs and improve regional productivity.
Persons seeking visas under the immigrant investor provisions must first file a form I-526, immigrant petition by alien entrepreneur, together with the required documentation with the USCIS. Each investor will be assigned a priority date under the visa quota system based on the date the petition is filed. After approval of the petition, qualified investors and their family members may apply for immigrant visa at a U.S. Embassy or Consulate abroad. Eligible persons in the U.S. may apply for adjustment of status to that of lawful permanent residents in the United States.
Removal of Conditions
The investor and his family members will be granted permanent resident status on a conditional basis. During the three-month window prior to the second anniversary of becoming a conditional green card, the investor will need to file a Form I-829 to remove conditions. The I-829 petition must show that the required capital was invested as planned, that the enterprise was maintained for two years, and that the enterprise has satisfied the job creation requirement.
Green Card: EB-1 is Suitable For:
- Foreign nationals who have received national or international acclaim for outstanding achievements in Arts, Sciences, Education, Business or Athletics
- Outstanding professors and researchers who have at least three years experience in teaching or research in their field and received international recognition for their work
- Executives of multinational companies managing an organization or a major function or division of an organization
- Managers of multinational companies supervising the work of other supervisory, professional or managerial employees
- Managers who manage an essential function, department or subdivision
Green Card: EB-2 under PERM is Suitable For:
- Foreign professionals with an advanced university degrees (masters degree or higher) and with a job offer from a U.S. company
- Foreign nationals with exceptional ability in the sciences, business or arts and with a job offer from a U.S. company
Green Card: EB-3 under PERM is Suitable For:
- Professionals with a U.S. bachelor’s or foreign equivalent degree and with a job offer from a U.S. company
- Skilled workers with at least two years of training or experience and with a job offer from a U.S. company
- Unskilled workers with less than two years training or experience and with a job offer from a U.S. company
Employment-based Immigrant Visa Application (4th Preference )
EB-4 Religious Worker category covers 3 groups of aliens (1) ministers of religion, (2) religious professionals working in a professional capacity in a religious vocation or occupation, and (3) religious workers working in a religious vocation or occupation.
Minister of Religion means an individual authorized by a recognized denomination to conduct religious worship and to perform other duties usually performed by authorized members of the clergy.
Professional capacity means an activity that requires at the minimum a U.S. Bachelor’s degree or the foreign equivalent. Typical of such occupations are religious teaching and scholarship.
Religious Workers referrer to those who work for the religious organization, or a bona fide affiliated organization so recognized by tax exemption in a religious occupation or vocation. There is no degree requirement for this group. This group usually includes, but not limited to, nuns, monks, liturgical workers, cantors, missionaries, broadcasters and others.
Family Based Green Card
Who may be eligible to file?
- US citizens
- Legal permanent residents (Green card holder)
Visas immediately available for US citizen’s
- Unmarried sons and daughters under 21
Preference Relatives (A limited number of immigrant visas are issued each year.)
a) First preference (F1): Unmarried sons and daughters of US citizens (those who are 21 and older)
b) Second preference (F2A and F2B)
F2A Spouses and children of lawful permanent residents
F2B Unmarried sons and daughter of lawful permanent residents
c) Third preference (F3): Married sons and daughters of US citizens
d) Fourth preference (F4): Siblings and half siblings of US Citizens who are at least 21 years of age.