THE EB-5 IMMIGRATION PROGRAM
The U.S.C.I.S. (U.S. Citizenship and Immigration Services – US Citizenship and Immigration Services) administers the EB-5 program. Under this program, entrepreneurs (and their spouses and unmarried children under the age of 21) can apply for a green card (permanent residence) if:
They make the necessary investments in a commercial enterprise in the United States;
They plan to create or maintain 10 permanent full-time jobs for qualified US workers.
This program is known as the EB-5 for the name of the fifth occupational preference visa that participants receive.
Congress created the EB-5 Program in 1990 to stimulate the US economy through job creation and capital investment by foreign investors.
In 1992, the Congress created the Immigrant Investment Program, also known as the Regional Center Program. This reserves the EB-5 visas for participants who invest in commercial enterprises associated with regional centers approved by USCIS on the basis of proposals to promote economic growth.
EB-5 visa classification information
U.S.C.I.S. administers the EB-5 program, created by Congress in 1990 to stimulate the US economy through job creation and capital investment by foreign investors. Under a program initially promulgated as a pilot in 1992, and regularly re-authorized since then, investors can also benefit from the EB-5 classification by investing through the regional centers designated by the U.S.C.I.S. based on proposals to promote economic growth.
The U.S.C.I.S. policy on the EB-5 awards is contained in Volume 6, Part G of the Manual of standards U.S.C.I.S.
All EB-5 investors must invest in a new business enterprise that has these characteristics:
- Established after November 29, 1990, or
- Established before November 29th 1990 and which was:
- Purchased and existing assets restructured or reorganized so that a new business venture results, or
- Expanded through investment so that at least a 40% increase in net assets or number of employees occurs.
Commercial enterprise means any for-profit activity formed for the ongoing conduct of a legal activity included, but not limited to:
- A sole proprietorship
- Partnership (limited or general)
- Holding companies
- Joint ventures
- Business trusts
- Other entities, which may be public or private property.
This definition includes a commercial company set up by a holding company and its wholly-owned subsidiaries, on the condition that each of these subsidiaries is engaged in a for-profit activity formed by the ongoing management of a legal activity.
Note: this definition does not include non-commercial activities such as owning and managing a personal residence.
Requirements for job creation
An EB-5 investor must invest the required amount of capital in a new business venture that will create full-time jobs for at least 10 qualified employees.
For a new business enterprise not located in a regional center, full-time positions, to be considered, must be created directly by the new business enterprise, which means that the new business (or its wholly owned subsidiaries) must be it the employer of qualified employees.
For a new business enterprise located within a regional center, the new positions can be created directly or indirectly by the new company itself.
Direct jobs are those jobs that establish an employer-employee relationship between the new business venture and the people it employs.
Indirect jobs are those jobs that despite being outside the new business enterprise, are created as a result of the new business itself.
In the case of a company in difficulty, the EB-5 investor can count on maintaining jobs. The investor must demonstrate that the number of existing employees is, or will be, maintained at no less than the pre-investment level for a period of at least 2 years.
A business in difficulty is an activity that has existed for at least two years and has suffered a net loss in the last 12 or 24 months before the “priority” date on the I-526 form of the immigrant investor. The loss for this period must be at least 20 percent of the net equity before loss. In order to determine if the activity in difficulty has existed for two years, the successors who are interested in the business in difficulty will be considered “existing” for the same period of time from which the company in difficulty existed.
A qualified employee is a US citizen, legitimate permanent resident or other immigrant authorized to work in the United States including, but not limited to, a conditional resident, a temporary resident, a person who has been granted asylum, a refugee or a person residing in the United States thanks to a suspension of deportation. This definition does not include the immigrant investor; his bride, sons or daughters; or any foreign citizen in any state of “non-immigrant” (such as a non-immigrant H-1B) or who is not authorized to work in the United States.
Full-time employment means the employment of a qualified employee by the new business enterprise in a position that requires a minimum of 35 working hours per week. In the case of the regional center program, “full-time employment” also means hiring a qualified employee in a position that was created indirectly and that requires a minimum of 35 working hours per week.
A work sharing agreement whereby two or more qualified employees share a full-time position will be considered a full-time job provided the weekly working time requirement is met. This definition does not include combinations of part-time positions even if, when combined, the positions meet the hourly requirements per week.
Jobs that are intermittent, temporary, seasonal or transitory in nature do not qualify as permanent full-time jobs. However, jobs that should last at least 2 years are generally not considered to be of an intermittent, temporary, seasonal or transient nature.
Capital investment requirements
“Capital” means: cash, equipment, inventory, other material properties, cash equivalents and debt guaranteed by assets owned by the foreign entrepreneur, provided that the foreign entrepreneur is personally and primarily responsible and that the assets of the new commercial enterprise on which the petition is based are not used to guarantee any debt. All capital will be valued at fair market value in US dollars. Activities acquired, directly or indirectly, by illicit means (such as criminal activities) are not considered capital for the purposes of section 203 (b) (5) of the Law.
Note: the immigrant investor must prove that he is the legal owner of the invested capital. The capital may include the promise of payment by immigrant investors (a bill of exchange) in certain circumstances.
The minimum investments required are:
- General. The minimum eligible investment in the United States is $ 1 million.
- Targeted Employment Area (or TEA – Targeted Employment Area). The minimum eligible investment in an area of high unemployment or in a rural area in the United States is $ 500,000.
A targeted area of employment is an area that, at the time of investment, is a rural area or an area that has registered an unemployment rate of at least 150% of the national average rate. A rural area is an area that is not located within a metropolitan statistical area (designated by the Office of Management and Budget) or the external boundary of any city or city with a population of 20,000 or more according to the last ten-year census of the United States.
The three basic steps towards the EB-5 visa
- Present the I-526 (Immigrant Petition by Alien Entrepreneur) form at the US Immigration Department.
The petition must contain any type of documentation required, in order to demonstrate that the investor meets all the criteria of “eligibility” for the visa.
- Once the USCIS has approved the I-526 form, investors and qualified family members can apply for “conditional” permanent resident status (valid for two years). If the investor resides outside the United States at the time of approval of the I-526, he must submit the DS-260 form (Immigrant Visa Electronic Application) at the National Visa Center and participate in an interview at a US US consulate or an embassy abroad. If the visa is granted, the investor must enter the US before its expiry (usually six months from the date of issue), after which the USCIS will send a Green Card to the investor and the qualified family members.
Alternatively, if the investor is already in the United States in an “invalid” status, he can request the change of status by sending the I-485 form (Application to Register Permanent Residence or Adjust Status) to USCIS. If the request is approved, the conditional permanent resident status is guaranteed to the investor and his immediate family members. The EB-5 visa is initially granted only temporally, because it expires in two years. You can get the Green Card by demonstrating that the activity in which you intend to invest has the potential to take on the necessary amount of workers. If it is not or if eligibility is not maintained in any other way, the Green Card will be canceled.
- At the end of the first two years of conditional permanent residence it will be necessary to present the petition for the “removal of the residence conditions”, as well as in the case of the application for family reunification presented by an American spouse. Form I-829 (Petition by Entrepreneur to Remove Conditions on Permanent Resident Status) must be submitted to the USCIS within ninety days prior to the expiration date of the conditional permanent residence, demonstrating that (a) the investor has supported his investment in the new business venture for a period of two years and (b) that the investment has created or can be expected to create the required 10 jobs within a reasonable time. For investments in a business in difficulty, the I-829 form must demonstrate that the new business enterprise has maintained a number of employees greater than the pre-investment, during the two-year conditional period. If USCIS approves I-829, it issues a 10-year Green Card to the investor and family members without restrictions, with the relative benefit of being able to live and work in the United States. After five years in possession of the Green Card, you can also apply for American citizenship.
- Present the I-526 (Immigrant Petition by Alien Entrepreneur) form at the US Immigration Department.
Unlike other investment visas, (E-1 or E-2 for example), for which only a limited form of immigrant intent is recognized, the EB5 visa allows you to invest in America and emigrate permanently with your spouse and children under the age of 21.
After 5 years of residence (including the first 2 years of “conditional residence”) in the United States, it is also possible to apply for American citizenship.