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Immigration Opportunities for Foreign EB5 applicants
Prior to the Immigration Act of 1990, a foreign national could not qualify for permanent immigration to the United States based upon an investment, no matter how large. EB5 applicants had to qualify, if at all, as employees of U.S. companies, family members of U.S. citizens or permanent residents or, in the alternative, obtain nonimmigrant (temporary) visas. As a result of this policy, many foreign applicants immigrated to countries such as Canada and Australia, which have provided substantial incentives to foreign immigrants. Presently, 10,000 immigrant (permanent) visas per year are available to foreign EB5 applicants and their family members who meet certain, very specific criteria. These criteria are interpreted very strictly by the U.S. Citizenship and Immigration Services (USCIS). This FAQ will address how foreign EB5 applicants can obtain permanent resident status in the United States.
1. What are the benefits of EB-5, while comparing other immigration options?
  • Qualifying EB5 applicants and their spouse and unmarried minor children (under 21) will be granted US Lawful Permanent Residency
  • No minimum requirements as to age, to speak English, employment experience, or education
  • EB5 applicant and family may live/work anywhere in the United States. Minor children may obtain employment, subject to age, state and governmental laws and regulations.
  • Education benefits including admission to Universities at US resident costs.
  • The EB-5 program does not require immigrant EB5 applicants to manage their businesses on a day to day basis.
  • After five years, the EB5 applicant and their family may obtain US citizenship, subject to meeting all immigration requirements, as required under law.
2. What is the minimum amount of EB5 fund required?
For funding in areas other than “targeted employment areas,” the minimum amount of investment is $1 million. Funding in “targeted employment areas,” including many approved regional centers, can qualify with a minimum of $500,000.
3. What is a “targeted employment area?”
A targeted employment area is a rural area or a geographical area that has experienced unemployment at a rate of at least 150% of the national average rate. Individual states are authorized to designate geographical areas within the state that qualify as targeted employment areas.
4. What is included in calculating the funding amount?
The entire amount of the funding need not be in cash. Assets transferred to the U.S. funding can be included at fair market value. Amounts borrowed by the EB5 applicant can be included in the required minimum funding amount but only to the extent that the debt is secured by assets owned by the EB5 applicant, and the applicant is personally and primarily liable. The assets of the business in the United States in which the funding is made cannot be used to secure any of the indebtedness.
5. Are there any restrictions on the types of businesses in which the funding must be made?
The funding must be in a “new commercial enterprise” in the United States. “New” means that the funding must have been made after November 29, 1990. “Commercial” is to be distinguished from a passive, speculative investment, such as a purchase of real estate for use as a personal residence or for potential appreciation in value (as opposed to an active real estate development project). The U.S. funding can be in any one of four forms: (1) the creation of a new business; (2) the purchase of an existing business, which is reorganized to form a new enterprise; (3) the expansion of an existing business; or (4) the saving of a failing business.
6. Must the EB5 applicant have any specific relationship with the U.S. business in which the funding is made?
The EB5 applicant need not own any specific percentage of the business, be an officer of the business or be an employee of the business. However, the applicant must be engaged in some way in the business, whether through actual day-to-day managerial control, by being a member of the board of directors, by being a limited partner, or the like.
7. Must the funding result in the creation of employment for U.S. workers?
The funding must create full-time employment for at least 10 U.S. citizens or immigrants (permanent resident aliens and other specified immigrant categories). The required 10 positions cannot include the EB5 applicant or the applicant’s spouse or children. The 10 jobs must be for employees of the enterprise in which the funding is made and cannot include independent contractors. However, for approved regional centers, the creation of employment can include indirect employment.
8. When must the employment be created?
The EB-5 petition must document that the required 10 jobs will be created within a 2 1/2 year period immediately following the approval of the EB-5 petition.
9. May two or more EB5 applicants qualify for immigration based upon a pooled funding in a single business?
There is no limit to the number of EB5 applicants who may qualify for immigration based upon an funding in a single business. However, each applicant must invest the required minimum amount, and the number of jobs created must be equal to ten times the number of qualifying foreign EB5 applicants. For example, if five EB5 applicants each invest $1 million in a business, they can each qualify for immigration if 50 jobs are created in the business.
10. Is the immigration status granted to the EB5 applicant valid indefinitely?
The permanent resident status granted to the EB5 applicant is actually a “conditional permanent resident status” that is valid for a period of up to two years. The applicant and family members are required to remove the condition by filing an application during the 90 day period preceding the second anniversary of obtaining this status. The petition will be required to demonstrate the establishment of the business, the funding of the requisite amount of capital and the creation of the required number of jobs.
11. Do all family members get conditional permanent residence status at the same time?
The EB5 applicant, his or her spouse and any unmarried, under 21 year old children can obtain permanent residence at the same time and through a single funding of the mother or father.
12. Is the EB5 applicant free to travel after obtaining conditional permanent resident status?
The EB5 applicant is free to travel in and out of the United States subject to the rules generally applicable to permanent residents. Specifically, the EB5 applicant must maintain a residence in the United States and must not be outside the United States for a continuous period of one year or more, unless she has obtained a reentry permit.
13. What is the procedure for an EB5 applicant to qualify as an immigrant based upon the project?
Form I-526, “Immigrant Petition by Alien Entrepreneur,” must be filed with USCIS. The petition must be supported by a substantial amount of documentation proving that the applicant meets all of the requirements. Once the petition is approved, the applicant may either apply for an immigrant visa at a U.S. Consul or, if the applicant is in the United States, apply for adjustment of status to permanent residence.
14. Where is the application filed?
Form I-526 is filed with the USCIS California Service Center. The application for conditional permanent residence is filed with USCIS if the EB5 applicant is in the U.S. or through the National Visa Center if the applicant will be outside of the U.S. and attending an interview at the U.S. Consulate in the home country. The condition removal petition, Form I-829, is filed with the USCIS California Service Center.
15. What is the timing of this process?
The I-526 petition is generally reviewed within three to six months. The conditional permanent residence process generally takes between four and nine months depending upon whether the EB5 applicant is in the U.S. or, if outside of the U.S., which consulate will be interviewing the applicant.
16. What documents must be filed with the petition?
The basic rule is that there must be documentation to establish each of the requirements set forth above. Specifically, documentation must prove the actual transfer or commitment of funds; the lawful source of the applicant’s funds; the location of the funding in a targeted employment area (if the funding is less than $1 million); the funding in a new commercial enterprise; the involvement of the applicant in the business; and the actual creation of 10 full-time positions or a comprehensive business plan showing the need for the 10 employees and the approximate dates when they will be hired. Specific additional documents will be required depending upon the details of the applicant and the funding being made.
17. What documentation must be presented to prove that the EB5 applicant’s funds came from a lawful source?
Generally, the EB5 applicant will present some combination of individual and/or business tax returns, employment records, documentation regarding sale of or dividends from a business, documentation regarding gifts or inheritance, and documentation regarding securities or real estate transactions.
18. Can all of the invested funds be a gift?
Yes. However, in that case, the person giving the gift must prove the lawful source of the gifted funds.
19. What is a regional center?
USCIS has approved a large number of regional centers. If an EB5 applicant invests in one of these approved regional centers, the applicant will not need to prove the creation of direct jobs for 10 U.S. workers. Rather, creation of indirect employment based upon econometric projections is sufficient.
20. Is an funding in a regional center guaranteed?
No. There is both an immigration risk and a financial risk. Regional centers may have a number of different projects. It is possible for a regional center to obtain pre-approval of a specific project. Even if a project is pre-approved, there is an immigration risk as to whether the necessary jobs will be created in order to obtain removal of conditions. There is also financial risk in every funding. For these reasons, it is critical for the EB5 applicant to choose both the regional center and the regional center project very carefully.
21. What must be proven in order to obtain removal of conditions on permanent residence?
The EB5 applicant must prove that the funding has been sustained – not withdrawn – and that the requisite jobs have been created as set forth in the business plan filed with the EB-5 petition.
22. What happens if the necessary jobs are not created?
If the necessary jobs will not be created, the EB5 applicant will not be able to obtain removal of conditions on permanent residence and will lose any legal status in the U.S. If there will be a change or delay in creating the necessary jobs, it may be necessary for the applicant to file a new I-526 petition and obtain a new two year period of conditional permanent residence status. It may not be necessary to do this if the applicant can prove at the time of filing of the I-829 petition that all of the necessary jobs will be created within a "reasonable time."
23. When is it possible to apply for U.S. citizenship?
Four years and nine months after obtaining conditional permanent residence status. Applying for U.S. citizenship is optional.
24. How can I obtain information on approved regional centers?
Please contact H. Ronald Klasko (rklasko@klaskolaw.com). As part of an EB-5 consultation, he will be able to send up to date information on all approved regional centers or on regional centers with a successful history of immigration approvals.
Information Source: http://www.eb5immigration.com/faqs.php
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