The USCIS EB-5 Immigrant Investor Program adopted into federal immigration law in 1990 was designed to stimulate the national economic growth through foreign direct investment (FDI). To create the best conditions for capital transfer to the U.S., Congress established the legal basis for the USCIS EB-5 Program. The Immigrant Investor Program promotes job creation and capital investment in the U.S. by foreign investors.
Rules to the EB-5 Visa stipulate that immigrant investors must invest in a new commercial enterprise of a designated size. This can be done through purchase of an existing enterprise, reorganized or restructured to maximize results, or by evidencing that investment will increase net worth or number of employees by a 40% increase. The minimum qualifying investment: $1 million. The minimum qualifying investment in high-unemployment area and rural areas: $500,000.
Eligible businesses are commercial enterprises. For-profit entities, conducting lawful business as a sole proprietorship; corporation; general or limited partnership; holding company; joint venture or business trust or other legal public or private financial subsidiary or structure.
Those enterprises meeting the criteria of holding company are defined as wholly owned subsidiaries of parent companies. To fulfill the requirement of commercial enterprise, a holding company must be part of a for-profit structure conducting lawful business not deemed to be noncommercial activity (i.e. operating a personal residence).
Contents
New Investor Requirements
EB-5 investors are required to invest new commercial enterprise in order to receive a visa. The requirements for new commercial enterprise are:
- 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
Aside from new commercial enterprise, there is also commercial enterprise. The term commercial enterprise means applies to all for-profit activity formed during ongoing operations of business. This includes:
- A sole proprietorship
- Partnership (whether limited or general)
- Holding company
- Joint venture
- Corporation
- Business trust or other entity, which may be publicly or privately owned
Job Creation Requirements
Job creation requirements meeting U.S. Department of State criteria to an EB-5 Visa application must provide proof of the capacity to preserve or create 10 new full-time roles for qualified U.S. workers within the stated 2 year time frame or within a reasonable period accorded the immigrant investor’ in a Conditional Permanent Resident visa.
Categories of job creation include direct jobs located in the commercial enterprise the EB-5 investor has financial control or capital investment in; and indirect or collateral jobs resulting from the actual capital investment in an existing commercial enterprise affiliated. In the latter case, the investor affiliated with an EB-5 Program Regional Center must officially document creation of indirect jobs.
According to USCIS:
- 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.
After conception of an investment project, certain qualifying terms apply in order to classify a business. According to USCIS:
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 nonimmigrant 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 investment requirements are met with secured assets in the form of cash, inventory, intangible property and equipment. Consideration of capital by the EB-5 Program is calculated according to U.S. fair-market value for same or similar assets. Investment capital cannot be borrowed. This includes debt leverage commonly used in acquisition of businesses outside of the visa program. Capital includes all of the following:
- Cash
- Equipment
- Inventory
- All tangible property
- Cash equivalents owned by foreign investor
- Indebtedness owned by foreign investor
It is important to remember that alien entrepreneur is personally and primarily liable and that the assets of the specified enterprise of which the enterprise is based are not based to secure indebtedness. Capital can not be borrowed.
According to U.S. law, the minimum investment required by a foreign investor is $1 million U.S dollars. Similarly, the minimum Targeted Employment Area (TEA) within a high-umeployment area or/even a rural area is $500,000.00
USCIS uses particular terms for qualifying targeted employment and rural area. As defined by USCIS:
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.
How We Can Help You
An EB-5 investor visa requires a significant amount of detail oriented work. We highly recommend consulting with an experienced immigration attorney before pursuing any action. If you have any questions, use the contact form on this page or on the Contact page.