What is the EB-5 Visa Program?
Generally speaking, EB5 is a federal USCIS visa category that allows a foreign national to apply to obtain legal permanent resident status for himself and his immediate relatives (spouse and unmarried children under 21 years only) as a result of the investor making an investment of either $500,000 USD or $1M USD into a qualified EB5 investment project in the United States which investment results in the creation of 10 US jobs.
This visa is often referred to as “the EB5 green card”, “immigration through investment”, or ‘job creation investment visa”. But most of us call it “EB5”. This visa category is presented to USCIS for adjudication, not the consulate.
EB5 is based on federal legislation. The Immigration Act of 1990 (“IMMACT 90”) created the Immigrant Investor Program as the fifth preference category for employment-based immigration, also known as EB-5. This was the first time a category specifically facilitated the admission of immigrant investors as lawful permanent residents and to this day remains the only such category to do so. The EB-5 Immigrant Investor Program is available to those immigrants who have invested, or are in the process of investing, at least $1 million in a new commercial enterprise employing at least 10 full-time U.S. workers. Individuals who invest in a “targeted employment area” (TEA), however, are only required to invest a minimum of $500,000.In addition, immigrant investors can invest $500,000 in a qualified and approved Regional Center. In direct investments & investments through a Regional Center, the investor must show that they created at least 10 direct or indirect jobs within two years of an approved I-526 application.
The purpose of the EB-5 program is to stimulate the U.S. economy through job creation and capital investment by offering immigrant investors the benefits of permanent residency in the United States and eventually, if desired, citizenship.
Approximately 10,000 visa numbers are allocated annually to EB-5 investors. USCIS reserves 3,000 EB-5 visas for aliens who invest in TEAs and 3,000 for aliens who invest in commercial enterprises affiliated with Regional Centers.
The purpose of the Immigrant Investor Pilot Program is to attract more foreign investors to fund businesses and projects in specific “regional centers” that would otherwise find it difficult to attract domestic investment based on current geographical market trends. By bringing such investment into areas of economic hardship and high unemployment, Congress hopes to stimulate job expansion, improve regional productivity, invest in infrastructure, and promote the growth of innovative new businesses.
In EB5-there are two options available to investors; 1) indirect investment and 2) direct investment. In the indirect option- Congress has made the Immigrant Investor Pilot program particularly attractive to foreign investors by lowering the investment minimum to $500,000 (for a business in a designated regional center or TEA) as opposed to $1,000,000, and by allowing a less restrictive job creation requirement based upon the creation of “indirect” and “direct” jobs and not requiring the day to day management of the business. Note that the investor is not required to live where the regional center is located or where the investment is made
With substantial improvements to the EB-5 category and increased demand; each successive year, the number of EB-5 applicants has grown in popularity.
The Immigrant Investor Pilot Program has been extended several times, and was recently extended through December 11, 2015; however, this program is temporary and it can become unavailable to investors in the future.
Approval for the EB-5 I-526 applications is high. In 2009, USCIS received 1,028 submissions of Form I-526. Of these, 966 were approved and 163 were denied. Likewise, in 2013, USCIS received 6,517 Form I-526. Of these, 82.6% were approved. Most denials occurred because investors failed to demonstrate their investment funds were lawfully acquired.
At the time of the initial approval of the EB5, the investor and his dependents will receive a green card with a two year condition. This is called a “conditional green card”. The EB5 program requires that on the second year anniversary of the initial approval of the EB5 visas, the investor, through his attorneys, submit a petition to USCIS to remove the condition and make it permanent. Removal of the condition on the green card requires that the investor successfully prove to USCIS that his investment created the requited 10 jobs. If the investor invested with a Regional Center under the Pilot Program, the Regional Center is responsible for providing the investor and his attorneys with the required job creation proof and documentation.
The EB-5 visa program offers a good immigration solution for those who have the financial resources to qualify and a tolerance for high risk investments. Investors in EB-5 need not have a particular background or any experience. However, the investor must be otherwise admissible to the United States and must be able to fully document that his or her investment funds into EB5 originate from lawful activities or sources.
If the EB5 application is approved by USCIS, green card visas are issued to the investor and his or her immediate family members (spouse and unmarried children under 21 years of age) who are included in the application (as beneficiaries). In order for a child to be included as a dependent- the child must be under 21 years of age at the time the EB5 application is submitted to USCIS for adjudication.
It is important to understand that an investment means an actual contribution of capital to the business. As all investments, it comes with the risk.