EB-5 Immigrant Investors
Congress created the EB-5 immigrant investor visa category in the Immigration Act of 1990 in the hopes of attracting foreign capital to the
What are the filing procedures for the EB-5 visa?
An applicant for the EB-5 visa must file Form I-526, Immigrant Petition by Alien Entrepreneur with the appropriate regional
What are the basic requirements for the EB-5 visa?
There are three basic requirements as follows:
Since its creation, the USCIS created the category very harshly, taking a series of actions that have severely limited its use. For example, in 1998 the
How does the EB-5 investor meet the requirement for a qualifying business?
There are three ways of meeting the requirement a qualifying business:
Any for-profit entity formed for the ongoing conduct of lawful business may serve as a commercial enterprise, including sole proprietorships, partnerships, holding companies, joint ventures, corporations, business trusts, etc. A holding company with its subsidiaries would also qualify if each subsidiary is engaged in the active conduct of business. Noncommercial activities, such as home ownership, do not qualify. Also, the alien must be actively involved in the business, and cannot be a passive investor.
What types of investments meet the requirements for the EB-5 investor?
The investment can be in the form of cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien provided that he or she is personally and primarily liable and the assets of the new commercial enterprise are not used to secure any of the indebtedness. The definition specifically excludes capital acquired by unlawful means.
How much investment is required to be an EB-5 investor?
The basic investment amount is $1 million. The required investment is $500,000 for a business established in a "targeted employment area." Targeted employment areas include:
1. Rural areas, defined as any area other than one within a metropolitan statistical area or within the boundary of a city or town with a population of 20,000 or more; and
2. Areas having an unemployment rate that is at least 150% of the national average.
For a Pilot Program investment, the threshold is a $500,000 capital contribution to a designated
What entities qualify as Regional Centers for the purposes of the Pilot Program?
Any economic unit, public or private, involved with the promotion of economic growth of a particular region may qualify as a
What happens if the
How may the EB-5 Investor invest in a qualifying new enterprise?
There are several ways an EB-5 applicant can qualify by investing in a new enterprise. The EB-5 investor can create an original business purchase an existing business or expand an existing business. Investment in an existing business must result in a substantial change in the business’ net worth or number of employees by at least 40%. The EB-5 investor must meet the required investment amounts of $1,000,000. Furthermore, the EB-5 investor must demonstrate that the investment capital was obtained form a legal source and the required capital is at risk for investment purposes.
What evidence is required for an application for the EB-5 investor investing in a new enterprise?
The EB-5 investor should provide evidence of creation of a new enterprise, or investment in an existing enterprise including, but not limited to the following:
· Articles of incorporation, partnership agreements, organizational documents
· Evidence of lease agreements for the qualifying enterprise
· State business licenses
· Evidence that the required amount of capital has been transferred
· Evidence that investment has resulted in the substantial increase of net worth
· Documentation of sources of capital
· Documentation of intent to invest or actual commitment to invest capital
· Documentation of assets purchased or transferred from abroad for the qualifying enterprise
How many full-time jobs must be created by the EB-5 qualifying investment?
The investment must create at least 10 full-time jobs for US citizens, lawful permanent residents or other immigrants lawfully authorized to be employed in the
The 10 positions must be full time. This means employment of a qualified employee in a position that requires a minimum of 35 working hours per week.
Can a commercial enterprise involving multiple investors be used as a basis for classification as an EB-5 investor?
Yes. Multiple investors may establish a new commercial enterprise which can be the basis for the EB-5 classification. However, each investor applying for the classification must meet the requirements for the EB-5 classification separately. For example, each investor must create 10 jobs for US workers.
Must the EB-5 Investor be involved in the management of the qualifying enterprise?
Yes. An EB-5 investor must be engaged in the management of enterprise either through day-to-day managerial control or through policy formulation. A purely passive role is not permitted. An EB-5 should submit documentation verifying such a role which may include the following:
Gregory Siskind is a partner in Siskind Susser's Memphis, Tennessee, office. After graduating magna cum laude from Vanderbilt University, he received his Juris Doctorate from the University of Chicago. Mr. Siskind is a member of AILA, a board member of the Hebrew Immigrant Aid Society, and a member of the ABA, where he serves on the LPM Publishing Board as Marketing Vice Chairman. He is the author of several books, including the J Visa Guidebook and The Lawyer's Guide to Marketing on the Internet. Mr. Siskind practices all areas of immigration law, specializing in immigration matters of the health care and technology industries. He can be reached by email at firstname.lastname@example.org.
The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.