The immigration laws of the United States make immigrant visas (permanent resident status or “Green cards”) available to investors who will contribute to the economic growth of this country by investing in U.S businesses and creating jobs for U.S. workers. Congress created this category of visas to incentivize foreign capital investment and job creation in the United States.
Approximately 10,000 visas are available each year for immigrant investors and their families (spouses and unmarried children under 21). Three thousand of these visas are for specific areas that USCIS has designated as Regional Centers.
To be eligible for an immigrant visa, the investor must meet three requirements:
- Capital and Investment
- The capital and investment must be in a new commercial enterprise
- The capital and investment must create jobs
A. REQUIRED CAPITAL AND INVESTMENT
- Required Capital
Before November 21, 2019, the required amount of capital needed was $500,000 in a target employment area (TEA) – rural areas and areas with high unemployment and a minimum of $1000,000 in a non-TEA. However, after November 2, 2019, Congress passed regulations moving these investments to $9,000 in TEA and $1,800,000 for no TEA and high employment areas. On June 22, 2022, a federal court vacated this regulation (Behring Regiona Center LLC v. Wolf, 20-cv-09263-JSC).
On March 15, 2022, President Biden signed into law the ‘Consolidated Appropriations Act, 2022’ which included the EB-5 Reform and Integrity Act of 2022 (“RIA”). According to this law, the minimum capital required for TEA is $800,000 and for non-TEA is $1,050,000.
This law extends the Regional Centers (RC) program to September 30, 2027. While this law made minor changes to prior EB-5 rules, it introduces new schemes, obligations, and definitions that did not exist in the previous EB-5 policy. It is feared that this sudden change and lack of clear guidance may create uncertainty in the short term.
- Required Investment
The petitioner for an EB-5 immigrant visa must invest his or her own capital. The path of the funds showing that the investment has been made or is being made must be documented. Since investment means to contribute capital, a loan by the immigrant investor or a contribution of capital in exchange for a note, convertible debt, obligation, or another form of indebtedness is not considered an investment. The invested capital must be at risk. Furthermore, the total amount of capital to be invested must be available. The immigrant investor must also demonstrate they obtained the capital by lawful means. Also, evidence of the actual business activity as opposed to merely establishing and capitalizing on a new commercial enterprise is required. A comprehensive business plan will generally capture all the necessary requirements.
B. NEW COMMERCIAL ENTERPRISE
Any entity and activity formed for the purpose of seeking profit will qualify as a commercial enterprise. However, this must have been formed after November 29, 1990 (when Congress created the EB-5 visa category). This includes sole proprietorships, partnerships, holding companies, joint ventures, corporations, business trusts, or other privately or publicly owned entities.
C. JOB CREATION
The new commercial enterprise must create at least 10 qualifying U.S. employees. To obtain initial approval of the EB-5 petition (filed on Form I-526), USCIS regulations generally require the petitioner to provide a business plan showing that the jobs will be created within the two years of conditional residence. When the petitioner is filing to remove the conditions on residence (Form I-829), USCIS will review both the Form I-562 and Form I-829 submissions to determine whether the immigrant investor has created the jobs. Generally, job creation can be proven by payroll, relevant tax documents, and others.
D. BASICS OF THE PROCESS
There are three steps an aspiring immigrant investor must take to secure an EB-5 immigrant visa:
- The first step is the filing of Form I-526-Immigrant Visa Petition by Alien Investor. This petition must be supported by all the necessary documents, including but not limited to evidence that the capital has been invested or is being invested in a new commercial enterprise and that the jobs have been created or will be created within two years. A detailed business plan supported by documents will generally be necessary.
- If Form I-526 is approved, the petitioner can proceed to apply for an immigrant visa either by adjustment of status or consular processing. If the petitioner is in the United States, they will file an Application to Register Permanent Residence or Adjust Status (Form I-485). This application can be filed concurrently with other applications like an Application for Employment Authorization (Form I-765) and Application for Travel Document (Form I-131). If the petitioner is not resident in the United States, then he or she will apply for an immigrant visa abroad. The approved Form I-526 will be forwarded to the State Department, National Visa Center (NVC). The prospective immigrant will then file an Application for Immigrant Visa and Alien Registration (Form DS-260). Upon approval of Form I-485 or DS-260, the applicant will be granted a conditional permanent residence (green card).
- The conditional resident must file a Petition by Investor to Remove Conditions on Permanent Resident Status (Form I-829). This petition must be filed within 90 days immediately before the second anniversary of granting conditional resident status. If this petition is approved, the residence status becomes permanent.
WE CAN HELP
Although seeking and obtaining an immigrant visa through investing in the United States is complex, we are confident that we can help you to navigate this intricate and challenging process. Contact us for a free strategy session.