What is an EB5 Visa?
EB5 Visa refers to an Employment-based visa in the 5th category. The EB5 Visa is an immigrant visa which allows foreign investors to reside permanently in the U.S.. Eb5 investors are required to invest at least $800,000 in a New Commercial Enterprise (“NCE”).
If the NCE is located either in: (a) a Targeted Employment Area (TEA); or (b) an area of high unemployment the required investment is USD 800,000. If the NCE is located outside of these area then the required investment is USD1,050,000.
The investment must employ at least 10 full-time U.S. workers or remain in a pool investment project which will directly result in job creation for U.S. workers.
What are the two types of EB5 Visa?
There are two types of EB5: (a) EB5 through a Regional Center; and (b) Direct EB5 where the investment is not made through a Regional Center.
Regional Centers are private companies licensed by the US government to operate a Regional Center. Regional Centers find projects suitable for EB5 investment purposes and then Despite positive changes in 2023 Regional Centers remain largely unregulated and are not subject to frequent government oversight and review.
EB5 Visa Preparation Process:
Documenting Investor's source of funds;
Devising a plan for the lawful transfer of Investor's funds;
Assisting Investor with immigration due diligence on a related immigration project;
Filing Investor's application using for I526;
Obtaining Investor's Immigrant Visa and Conditional Permanent Residency in the United States (a “Green Card”)
Assisting Investor with a consular interview when needed;
Filing form I829 to convert Investor's Conditional Green Card into a full/permanent “Green Card;”
Preforming due diligence on Investor's EB5 investment as to issues of law which impact the safety of Investor's money;
Providing the Investor with advice from a tax lawyer;
Assisting the Investor with the return of Investor's capital;
Assisting Investor's family members to gain permanent residence.
Benefits of an EB-5 Visa:
Foreign nationals under the EB5 Visa don’t need to complete a labor certification process that employment-based immigrant visas require. Unlike an L-1 visa EB5 has no requirement to maintain a business in your home country nor does it depend on verifying extraordinary ability in the business.
The EB Visa also allows you to bring your dependent family members such as your spouse and unmarried children under the age of 21 to the U.S.
Compared to other visas, the EB5 Visa has no visa limits based on your home country. This makes it appealing over diversity visas. It also doesn’t require you to have family members who are already present in the U.S.
The most beneficial aspect of an EB5 Visa, however, is that it offers a direct pathway to U.S. citizenship for you and your dependents. Other visas will force you to apply for other visas to gain citizenship, but an EB5 Visa, already includes the intent of permanently living in the U.S.
Major EB5 Visa Requirements:
Investment in Targeted Employment Areas (TEAs)
The EB-5 programoffers investment opportunities in a targeted employment area (TEA), which is either a rural or high-unemployment area that must have an unemployment average of at least 150% of the national unemployment rate of the U.S. On the other hand, a rural targeted employment area is an area located outside a metropolitan statistical area (MSA) and has less than 20,000 in population.
While rural TEAs maintain a consistent designation, high-unemployment TEAs change based on the census and moving employment rates; hence once must take into account the most recent census datato ensure the ongoing qualification.
Investment in a New Commercial Enterprise
In a direct EB-5 investment, the investor invests the funds directly in a new commercial enterprise (NCE), which is the entity that will create the requisite jobs.
A NCEt. is one that operates for-profit within the U.S. It can be any type of business structure such as a LLC, corporation, a partnership, sole proprietorship, trust or others.
In the EB-5 regional center route, the investor acquires equity in an investment fund entity, affiliated with a regional center. This fund entity will then buy equity in, or loan the EB-5 money to the job-creating entity (JCE). The JCE deploys the investment capital into a project which creates employment. Direct, indirect and induced jobs created under this model can be counted toward the minimum 10-full time job creation requirement imposed by the regulations.
Investment amount
The minimum investment amount to qualify for an EB-5 Visa depends on the area where the investment will be made. If the investor chooses to invest in a TEA, the minimum is $800,000 USD. Meanwhile, for areas outside the TEA, the minimum investment capital is $1.05 million USD.
Further, the investment funds should be in an NCE as approved by the USCIS, and the investor shouldn't expect the guarantee of its return as the money should be "at risk".
Source of funds
The US government requires detailed documentation of the source and path of funds. The burden lies on the investor to show that their funds are obtained through lawful means and and to document the path and trail of the funds from the source/s. EB-5 funds can be in the form of salaries or wages, business profits, savings, loans, inheritance, or gifts.
Salaries or Wages
Salaries or wages are income from employment and include overtime pay, pensions, bonuses, and allowances. You can submit tax returns for multiple years, a letter from your employer stating your job description and salary, and pay slips to show the lawful means of your earnings.
Business Profits
These funds are sourced from "at risk" business venture that exceeds the business' expenses and taxes. You can submit a copy of the deed of sale and bank statements evidencing the transfer of money from the buyer to your account to confirm the legality of the source.
Gifts
Gifts are voluntarily given without payment or consideration. You can submit a signed document from the donor that states they're not expecting any consideration for the gift. There should also be additional evidence showing how the donor acquired the funds, information about the individual, employment verification, and so on.
Loans from financial institutions or an individual
A loan is a form of debt incurred by a financial institution or an individual. It must be secured by assets other than those of the EB-5 corporation. To prove that the loan was properly obtained, you can submit tax declarations, tax returns, and other relevant documents.
Inheritance
An inheritance refers to transferred assets from a deceased individual. It can come in the form of cash, investments, real estate, jewellery, and even art. You would have to submit proof of the relationship between you and the deceased if the inheritance along with probate documents, will, bank statements, and other relevant proof to evidence the legitimacy of the inheritance.
Job Creation
The EB-5 visa requires that the investor must create 10 full-time jobs for at least 10 qualified U.S. workers within 2 years from receiving their conditional permanent resident status. The qualified U.S. employees should be U.S. citizens, lawful permanent residents,or other immigrants who are allowed to work in the U.S. such as conditional residents, asylees, and refugees.
The jobs created from an EB-5 investment can be direct, indirect, and induced jobs. Direct jobs result from direct investments, from an enterprise created by the capital of the investor It pertains to the general work of the business, providing either services or products.
On the other hand, with the EB-5 regional center route, indirect and induced jobs are created through regional centers. A regional center is either a private or public economic unit that promotes the economic growth of the U.S., focusing on job creation than the enterprise itself.
Indirect jobs are created outside of the NCE but a arise as a result of business operations; basically, these are jobs created by other businesses that are formed due to the economic growth of your business. Induced jobs, on the other hand, resulted from the creation of investment in the broader community due to the spending from the new enterprise and its employees.
Evidence of Job Creation
The USCIS requires that the EB-5 investor’s investment create 10 full-time jobs for qualified U.S. workers within 2 years of receiving their conditional permanent residency. You are required to show evidence that your investment has resulted in the creation of 10 full-time jobs by direct employment if you made a direct investment or 10 indirect or induced jobs if the investment is via a regional center.
Role of a Regional Center
An EB-5 investor has the freedom to choose whether to make a direct investment or an investment through regional centers. Regional centers are established to stimulate the growth of the U.S. economy, creating investor pools and introducing these investors to businesses that need funding. Regional center are US government licensed agencies that pool investors and find EB-5 projects to invest their funds. Regional centers collaborate with developers to fund projects suited to the EB-5 job creation requirements.
There are two entities involved in this kind of investment: 1) The New Commercial Enterprise, which is the entity invested in, and 2) the Job Creating Entity, which is the entity that invests or loans EB-5 funds to create jobs.
Required Documents for an EB-5 Visa Application
There are different documents that you must submit for your application for an EB-5 Visa, which include:
A copy of your and derivatives’ passport;
Birth, marriage, and divorce certificates;
Household registration;
Proof of any prior to immigration applications;
Proof that you have invested or are in the process of investing the minimum investment funds;
Certified copies of any court judgment, pending administrative, civil or criminal actions against you from any court in or outside the U.S. within the past 15 years;
Proof of business ownership;
A copy of the business license;
Business organizational documents;
Bank statements and tax returns for the last 5 years;
Proof that shows other sources of capital;
Financial statements for each business; and
Proof that the investment was obtained through lawful sources.
EB-5 Visa Benefits
As we have said, an EB-5 Visa grants permanent residence status (green card) to an investor. There are several advantages of this program:
Streamline visa processing for the investor and their family members. The EB-5 visa is typically granted faster compared to other immigrant visa classifications, which generally have long wait times and backlogs
No employment certification or job offer is required. Compared to other visa classifications, the EB-5 visa doesn't require the applicant to secure a job offer or an employment certification.
Freedom to work and live in the U.S. The investor can reside and work anywhere in the U.S.
Direct pathway to permanent residency and citizenship. The investor and their eligible dependents can apply for U.S. citizenship after maintain the lawful permanent resident status.
Educational opportunities. The investor’s family has access to educational opportunities also available to U.S. citizens.
Global mobility. The investor has increased mobility when travelling internationally, as the green card provides visa-free or visa-on-arrival access to multiple countries around the world.
Social benefits. The holders are eligible for certain social benefits subject to meeting the requirements.
Business investment flexibility. The EB-5 visa holders can acquire businesses, diversify their investment portfolio, and participate in other economic opportunities in the U.S.
Voluntary net worth disclosure. The investor is not obligated to reveal their net worth, giving them privacy and financial discretion.
Minimal involvement in the process. The investor doesn't need to be engaged deeply in the process, since the focus is on their investment and its impact on the U.S. economy rather than their qualifications or active participation.
EB-5 Visa Application and Process
While applicants are allowed to make their applications without the need for a lawyer, an immigration lawyer can be of great help. Here at Davies & Associates, our immigration lawyers can not only make the EB5 Visa process easier for you and help each step of the way, but also help increase your chances of an approval.
Here's a brief overview of the EB-5 process:
Step 1. Preliminary due diligence to identify investment risks and corresponding solutions.
Step 2. You will then choose an investment project. There are specialized EB-5 businesses that allow you to invest in approved projects, and you must complete the transaction through a regional center.
Step 3. You will then need to gather or collect the relevant documents for your application. Any document bearing foreign language must be accompanied by an English translation certified as accurate and complete by a translator.
Step 4. You will then have to fulfil the minimum investment requirements, depending on your chosen area of investment.
Step 5. You will now have to file the relevant petition forms along with your documentation showing the source and path of funds, among others with the USCIS (United States Citizenship and Immigration Services)
Step 6. USCIS will adjudicate your petition.
Step 7. Once your petition is approved by the USCIS, you can file for adjustment of status if you are in the US in lawful visa status or submit your immigration visa application with the U.S. Embassy or Consulate Upon approval of your adjustment of status in the US or after the successful conclusion of the visa interview at the consulate, you and eligible family members will be granted a conditional green card.
Step 8. Before the expiry of your conditional green card, you are required to file a Form I-829 (Petition by Investor to Remove Conditions on Permanent Resident Status) with the USCIS to remove the restrictions for obtaining permanent residence.
How to qualify for an EB-5 Visa?
To obtain an EB5 Visa, there are certain EB5 Visa requirements that you must satisfy. First, you must show that you have invested or are actively in the process of investing in a New Commercial Enterprise.
Second, you must make a minimum investment of $800,000 in a TEA or $1,050,000 in non-TEA. This is included in some of the EB-5 Visa cost that you'd need to pay throughout your application. You may also invest in regional centers, which have less strict job creation requirements.
Third, the capital invested must create at least 10 full-time jobs for qualified U.S. workers.
EB5 Visa Application
The first step in an EB5 Foreign Investor Visa process is to file an Immigrant Petition as an Alien Entrepreneur. This must include supporting documents about the specifics of the investment, the management of the business, and proof that the money has been invested and that the invested business created jobs. These are not exclusive, and your immigration lawyer can help you determine which documents to include in your petition based on your circumstances.
Upon the approval of your petition, you may apply to obtain status as a conditional resident together with your dependents for 2 years. After that, you can apply to have the conditions removed.
EB-5 Visa Processing Times
According to the USCIS, the processing time for Form I-526 petitions ranges between 55-85 months, depending on your home country. Please take note that the USCIS processes first petitions from investors for whom a visa is available or soon to be available.
Meanwhile, in the new visa bulletin from the USCIS, all countries except China and India are tagged as "Current", which means no backlog or retrogression.
What is an EB5 Regional Center?
An EB5 Regional Center is a public or private economic entity that’s involved in the promotion of economic growth, increased domestic capital investment, improved regional productivity and job creation. It must be first approved by the USCIS.
Please take note that investing in a regional center doesn’t guarantee that the conditions on your green card will be removed after 2 years. You must still prove that your investment funds were at risk, and the minimum number of jobs for qualified U.S. workers were created.
Why are EB-5 Immigrant Investor Program Rules changing?
In March 2022, the Congress has passed the new EB-5 Reform and Integrity Act of 2022 (2022 Act). The law reauthorized the Regional Center Program and implemented changes and requirements for foreign investors and regional centers.
Minimum Investment Requirements
Before the new law, the 2019 law increased the minimum investment amount from 1990. The 2022 Act changed the minimum investments to $800,000 in a TEA and $1,050,000 in non-TEA.
Targeted Employment Area
The new law provides that only the USCIS may designate high-unemployment TEAs, which include the census tract or contiguous census tracts in which the NCE is primarily doing business. The weighted average of the unemployment rate for the census tracts must be at least 150% of the national average.
Moreover, the 2022 Act has specified that the USCIS shall prioritise the process and adjudication of EB5 petitions for regional center investments in rural areas.
Regional Center Program
The new law also authorizes the Regional Center Program until September 30, 2027. Because of this, the USCIS has resumed processing applications based on regional centres. However, the applications are subject to the law which is in place at the time of its filing (e.g. minimum investment requirements).
Oversight Measures
The 2022 Act has included oversight measures, particularly for regional centers, which address concerns of fraud and abuse in the program. It established the EB-5 Integrity Fund which is funded by regional centers through annual fees. The USCIS will use this fund for investigations related to the program such as determining compliance and conducting regional center audits.