Immigrant investors around the world have used the EB-5 Program managed by the U.S. government office of the U.S. Citizenship and Immigration Services, or USCIS, since 1990. This program enables qualified people to applyl for a green card based on an investment in a U.S. business. With an investment of either $500,000 or $1 million into a U.S. business, if the investment will lead to an employment impact for 10 U.S. laborers. At least 10,000 EB-5 green cards are made available every fiscal year (from October to the following September).
How to Qualify?
To qualify under this program, a possible investor can invest in their own managed business enterprise, or inside a pooled investment that funds a commercial venture controlled and handled with other parties. The investor could also opt to invest via a “Regional Center.” Regional Centers are usually public or private companies which sponsor developments in certain targeted geographical regions that the USCIS has found could lead to enough jobs to support each investors. Those jobs can be created indirectly or directly. In most regional centers the minimal amount to invest is $500,000, plus administrative or syndication fees which could range between $35,000 to $60,000. Many regional centres demand limited partnership investments and provide the investor with all the rights of a limited partner, as allowed by USCIS, which provides the investor a supporting role in the organization.
Advantages & Considerations
One potential advantage investing through a Regional Center (in contrast with a standalone business) is that some investment projects can be pre-approved by the USCIS with respect to the investment financing structure of the project, and with respect to the job creation methods. Regional Center projects have the distinct benefit of being able to count indirect and induced jobs as forecasted by a reasonable economic methodology. As well, regional centers and their projects are required to submit annual reports of their financial status and job creation history to the USCIS each calendar year. Today, there are over 700 EB-5 Regional Centers (and more emerging every day) around the United States. Selecting the right one is very important and requires an understanding of how each EB-5 Regional Center functions.
Basic Questions for every EB-5 Investor to Consider
As a potential investor, the following is provided to allow you to understand some of the basic legal requirements for the EB-5 program in general:
How to qualify to be an investor?
Can I bring my family with me?
What financial documentation will I need?
What personal documentation is required?
Where to invest?
How to Qualify to be an Investor
Establish a new commercial enterprise by creating an original business, purchasing an existing business or reorganizing the business such that a new commercial enterprise results. Or, if the investment is in a Regional Center that has been designated by the U.S. Immigration Service, by investing in a regional center project.
Investors who have invested or are actively in the process of investing at least $500,000 or $1,000,000 in a new commercial enterprise. Many Regional Center investments typically require that your funds be held in secured escrow. In this scenario, the escrow agent will not release your funds to the Regional Center until your initial I-526 petition is approved by the U.S. Immigration Service.
EB-5 investors must qualify by making their capital contribution to a U.S. commercial enterprise which will benefit the United States economy and create at least 10 qualified jobs as a result of one or more of the following: (a) full-time employment for 10 directly employed employees such as U.S. citizens, permanent resident workers, or other certain authorized workers; OR (b) indirect and/or induced employment, if allowed, as determined by a reasonable job creation methodology support by an economic impact analysis.
Prove that the investment funds were derived from a lawful source of funds, for example personal income, work salary, dividends, sale of property, or even the proper collateral if funds were derived from a loan. Hence, the type of documentation needed will be determined based on the financing structure that you utilize.
Can my spouse and children also receive “green cards” under the EB-5 visa program?
Yes. Your spouse and children (under 21 years old) are eligible for the conditional immigrant visas. No separate investment is required apart from your initial investment of $500,000 or $1 million. Additionally, under the U.S. law called the Child Status Protection Act or CSPA, your children who are close in age to 21 years old can have their age frozen by the government when their petitions are filed and pending. It is important to review these issues with our law firm if your children are approaching 21 years of age.
Financial Documentation to Prove Lawful Source of Funds
The U.S. Immigration Service requires that investors demonstrate that their assets were gained in a lawful manner. This requires the investor to prove that their investment funds were obtained through lawful business, salary, investments, property sales, inheritance, gift, loan, or other lawful means. This may be accomplished through certificates by the investor’s licensed accountants, lawyers, court records, salary statements, tax statements, real estate documents, including:
- Profit and earnings from a business
- Profits or proceeds from the sale of real estate
- Profits or earnings from stock or other investments.
- Bank statements
- Investment account statements
- Documents showing ownership in real estate or a company, accompanied by an appraisal of value and registration of ownership, loan or mortgage, promissory note, security agreement, or other evidence of borrowing which is secured by assets of applicant.
- Tax returns from the last 5 years. (If applicable)
Personal Documents, in general, Needed for an EB-5 Petition
In addition to financial documents, the foreign investor must provide the following documentation:
- Legible copies of passports (including blank pages). Passports must be valid for at least 6 months from the date the visa is expected to be issued. This requirement applies to the foreign investor’s spouse and children (under the age of 21 at the time of application) filing for a green card through this program.
- Investor’s Resume (Curriculum Vitae) which should include personal and contact information, educational background, professional experience, and employment history (please include name of supervisor and company’s address and phone number).
- Investor’s personal narrative in their own words describing how they obtained the funds.
- Copies of academic diplomas.
- Articles of organization (if owner of a company).
For Green Card or Immigrant Visa Processing (Not needed for initial phase):
- Certified copies of birth certificates, copies of marriage certificates, and/or divorce decrees and death certificates, if applicable.
- Certified copy of any military record should be submitted.
- Certified copy of police record from the city where the applicant has resided for at least 6 months since turning 16. These records may include but not limited to information on former arrests, crimes, court, regardless of amnesty, pardon, or other clemency.
NOTE:There may be additional documentation requested prior to filing depending on an individual case-by-case basis, and as required by any change to USCIS or U.S. Department of State policies and regulations.
Regional Center Information (if non-direct EB-5)
To qualify as an investor under U.S. Securities Law you need to be an “accredited investors,” as defined by various security laws that describe which investors are permitted to invest in certain types of high risk investments, limited partnerships, and more. In the U.S. an individual is considered to be an “accredited investor” if he or she has a net worth of at least $1 million or has made at least $200,000 each year for the last 2 years ($300,000 with spouse if married).
Additional documentation will be provided to you by the Regional Center upon its receipt of your signed consent form and later when you escrow your funds to the Regional Center. HarrisLaw, P.A., will assist you to communicate on your behalf with the Regional Center in order to request the Regional Center’s qualifying information.
How to Select an EB-5 Investment
Selecting the right one is very important and requires an understanding of how each EB-5 Regional Center functions. In addition to consulting our firm for a qualified immigration attorney, investors should consider:
- Seeking independent qualified financial advice;
- The reputation of the regional center and project developer;
- The past business success of the developer;
- The ability of the regional center and/or developer to create the requisite amount of jobs required by the EB-5 program;
- Other due diligence factors; and
- The immigration history of the EB-5 Regional Center, in terms of its ability to secure the approval of investor petitions (called the I-526) and the removal of the conditions on an investor’s permanent residence (called an I-829).
Requirements for Conditional Residents
Once your petition is approved, Immigrant Investors may obtain resident status for 2 years as a provisional or conditional resident by filing a separate Application for Permanent Residence if they are residing within the United States. Immigrant investors who are outside of the U.S. will need to apply for a permanent immigrant visa at a U.S. Consular Section. When you are admitted as a U.S. lawful permanent resident, you will be required to seek full permanent residence prior to the end of the 2-Year period. This will require that a second petition is filed during the 90 day period before the 2nd anniversary of your admission to the United States as a conditional resident.
In cases of investments made through a Regional Center project, the Regional Center will be responsible for providing you and your family with the documentation necessary to file the petition to remove the conditions on your green card. This is another important difference, or benefit, in choosing a Regional Center investment or another privately-managed pooled investment structure. If you create your own business, as the owner you will be tasked with the burden of collecting payroll records.
In order to achieve full permanent residence, an EB-5 investor is required to have maintained the investment by not withdrawing the funds. Most important is continuing the objectives of the proposed business plan submitted to USCIS. Most business plans require financial and job creation forecasts based on the type of business structure that you, the Immigrant Investor, initially invested in.