Immigrant Investors, the EB-5 Visa
Congress created the fifth employment-based preference (EB-5) immigrant visa category in 1990 for qualified foreigners seeking to invest in a business that will benefit the U.S. economy and create or save at least 10 full-time jobs for U.S. workers. I.N.A. § 203(b)(5). The basic amount required to invest is $1 million, although that amount is reduced to $500,000 if the investment is made in a rural or high unemployment area, Targeted Employment Area (TEA). Of the 10,000 EB-5 green cards available each year, 3,000 are reserved for foreign nationals who invest through a Regional Center. USCIS estimates that approximately more than 90% of EB-5 visas are based on Regional Center investments.
How Meyer Law Group can help:
Meyer Law Group and Brandon Meyer are widely known on the national and international level for providing expert legal representation in the broad and complex areas of EB-5 visas and regional center matters. Mr. Meyer and his staff are highly qualified to provide consultation in all legal matters related to the EB-5 visa and the Regional Center Pilot Program, and can provide direction for corporate structuring, securities regulations, and tax and financial issues. Meyer Law Group will work with regional center developers and businesses by assembling and facilitating an elite group of corporate and securities attorneys, economists, and business plan writers to help your regional center receive USCIS designation in a timely manner. Brandon Meyer and his staff members have written extensive articles and practice guides for new attorneys desiring to practice law in EB-5 matters and for more complex areas requiring greater expertise. Meyer Law Group has helped numerous regional centers receive their desired I-924 regional center designations.
Whether Meyer Law Group is filing an I-526 or I-829 application for an individual investor, or providing expertise in exemplar petitions and I-924 regional center applications for new or existing regional centers, we are proud to continue our reputation of excellence and high-quality service with EB-5 clients. Please read below to learn more about the EB-5 visa program.
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.
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: 1. Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or 2. 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
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 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 (see information below).
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.
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:
- 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.
- General. The minimum qualifying investment in the United States is $1 million.
EB-5 Regional Center Economic Development Program
To encourage foreign investment in the U.S. economy through the EB-5 category, Congress created an EB-5 Regional Center Pilot Program in 1992. A Regional Center is a private enterprise/corporation or a regional governmental agency with a targeted investment program within a defined geographic region. The Regional Center Program in many ways mirrors long active and successful investment-employment based programs in the United Kingdom, Canada, Australia, and other foreign nations.
The EB-5 Regional Center Program allows that 10 or more jobs be created directly or indirectly as a result of the investment. The Regional Center Investment Program aids foreign investors by directing and professionally managing their investment in the designated business and geographic focus of their Regional Center.
The Regional Center Investment Program allocates 3,000 green cards each year for people who invest in designated Regional Centers. The 3,000 is not a limit, just the amount reserved specifically for Regional Center based investments. The Program has been renewed several times, and is currently due to expire September 30, 2015.
A Regional Center obtains its designation by submitting a detailed application to USCIS. The application must state:
- the kinds of businesses that will receive capital from investors;
- the jobs that will be created directly or indirectly as a result of the investment of capital; and
- the other positive economic impacts that will result from the investment of capital.
The investment offering itself is subject to U.S. securities laws, enforced by state securities regulators and the U.S. Securities & Exchange Commission.
Once USCIS has approved a Regional Center application, an investor seeking an EB-5 green card through the Program must make the qualifying investment (i.e., $1 million or $500,000) within an approved Regional Center. However, 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.
Before an investor can participate in a Regional Center’s EB-5 investment program, each investor must independently petition USCIS for an EB-5 visa. USCIS solely determines whether the investor qualifies for the EB-5 visa. USCIS’ diligence includes a full background check, including detailed review of the sources of the investor’s funds (to confirm its lawful origin), family history, and other representations of the head of household and his immediate family member under the age of 21.
As with the regular EB-5 program, qualified investors investing through a Regional Center first receive a conditional green card valid for two years. At the end of that time the investor files another application with USCIS showing that their money was “at risk” during the two-year period and that the jobs have been created. Once those applications have been approved, the investor and his immediate family become permanent green card holders and can later apply to become U.S. citizens.