EB-5: THE MILLION DOLLAR (or half a million dollar)
& REGIONAL CENTER INVESTMENTS
Congress enacted the EB-5 immigrant visa category for alien investors seeking to enter the U.S. to engage in an active commercial enterprise that will benefit the U.S. economy and create at least 10 full-time jobs. The investment must be in an active business; it may not be a passive investment such as the stock market. Further, this new business must employ at least ten people per investor. As a general rule, the immigrant must invest at least $1,000,000, although the amount may be $500,000 if the investment is made in an approved “targeted employment area.”
Under section 203(b)(5) of the Immigration and Nationality Act (INA), 8 U.S.C. § 1153(b)(5), 10,000 immigrant visas per year are available to qualified individuals seeking permanent resident status on the basis of their engagement in a new commercial enterprise. Of the 10,000 investor visas (i.e., EB-5 visas) available annually, 5,000 are set aside for those who apply under a pilot program involving a United States Citizen and Immigration Service (USCIS) designated “Regional Center”.
Benefits of an EB-5
If you are an active investor in a U.S. enterprise in which you are investing at least $1 million, or $500,000 in certain targeted areas, and the enterprise creates at least 10 full-time jobs, then you may be able to obtain U.S. Permanent Residency under the EB-5 category. If an EB-5 application is approved, the alien becomes a conditional permanent resident for 2 years. In effect, through his investment, the alien and his family can secure a temporary green card. After 2 years, the person and his family file to remove the condition. If he has satisfied the conditions, then he and his family will receive a permanent Green Card.
Regional Center Program and Its Benefits: A Quicker Path to a Green Card
The EB-5 category is an important option for foreign investors to consider because of the unique advantages it affords. These include the flexibility to live anywhere in the U.S., not just in the geographic area of the investment and the option to be a limited partner not required to be involved in the daily management of the new commercial enterprise. The required investment is $500,000 or more in USCIS designated Regional Centers. Further, the EB-5 category provides a quicker path to obtaining a green card.
This is an option for foreign investors who are looking for an investment that does not require the daily responsibilities of running a company.
What is a regional center and what makes the Regional Center Program unique?
A regional center is an entity, organization or agency that has been approved as such by the USCIS;
Focuses on a specific geographic area within the United States; and,
Seeks to promote economic growth through increased export sales, improved regional productivity, creation of new jobs, and increased domestic capital investment.
The designated regional center is located in an area with high unemployment and is one that the USCIS has determined would benefit by indirect employment provided by the investor’s project.
Foreign investors in a designated regional center must do the following:
Demonstrate that a "qualified investment" is being made in a new commercial enterprise located within an approved Regional Center; and,
Show that 10 or more jobs are actually created either directly or indirectly by the new commercial enterprise through revenues generated from increased exports, improved regional productivity, job creation, or increased domestic capital investment resulting from the pilot program.
What Does It Mean to Indirectly Create New Jobs?
If you invest in an USCIS approved regional center, you do not need to directly create 10 full-time jobs. The requirement of creating at least 10 new jobs is met by a showing that as a result of the new enterprise, such jobs will be created directly or indirectly through revenues generated from job creation. If effect, if you invest in a USCIS approved regional center, only a creation of a few jobs may meet the 10 job requirement because an increase in a few jobs also leads to indirect job gains, the sum of which equals at least 10.
How many USCIS approved regional centers are there in the U.S.?
Currently, there are more than 20 USCIS approved regional centers in the U.S. If the regional center is also in “targeted employment area” then the investment may be only $500,000. “Targeted employment area” is defined as a rural area or an area that has an unemployment rate at least 150% of the national average. Each state notifies the USCIS which areas constitute targeted employment areas for that state. However, you may also submit your own evidence that the area in which you will invest is a targeted employment area, evenif the state has not so designated it.
Summary If you qualify for EB-5 status, it can be an advantageous category for obtaining U.S. Permanent Residency because you can self-petition, the priority date is usually current, and you can obtain Conditional Resident status upon filing the EB-5 petition and making the initial showing, thereby often avoiding the necessity of obtaining some type of temporary status while waiting for the Permanent Residency Status.
The major disadvantages include the amount of money which must be put at risk, and the number of jobs which must be created. It is important to note that, as with any investment, the amount the alien invests, can be lost. Also, the new business venture must create 10 jobs. If the business fails to accomplish that, Permanent Residency Status will not be granted.
Permanent resident status based on EB-5 eligibility is available to investors, either alone or coming with their spouse and unmarried children. Eligible foreign nationals are those who have invested -- or are actively in the process of investing -- the required amount of capital into a new commercial enterprise that they have established. They must further demonstrate that this investment will benefit the United States economy and create the requisite number of full-time jobs for qualified persons within the United States.
Upon filing EB-5 and making the initial showing, the foreign national first obtains Conditional Resident status, and the only at the end of the process does the foreign national obtain Permanent Resident status, if the petition is successful.