The EB-5 Visa
The EB-5 Immigrant Investor Visa Program is one of the five employment-based (EB) preference programs in the United States. The EB-5 visa provides a method for eligible immigrant investors to become lawful permanent residents by investing at least $1,000,000 to finance a business in the United States that will employ at least 10 American workers.
Often times these visa holders invest in targeted employment areas such as rural or high unemployment areas because the investment threshold lowers to $500,000. This investment is seen as very advantageous for those areas. By putting more money into a business and creating new jobs for American workers, the visa is designed to help boost the American economy.
While initially the EB-5 visa holders are issued a conditional green card, after a period of time (given their investment does, in fact, produce 10 new jobs), they are able to apply for a permanent green card. This effectively allows them to become permanent residents. The EB-5 program was created to encourage foreign investments and economic growth, however there remain arguments that suggest this is false. Because of this, more recent attention has been brought to the issue.
The EB-5 visa was created in 1990 by the Immigration Act of 1990 and has grown to become a way for wealthy foreigners to move to the United States. By 2014, the vast majority of EB-5 visas were granted through regional centers. By May 2017, there were 88e USCIS-approved regional centers. By 2015 the program had become an important source of capital for developers and for the regional centers, making this visa program extremely valuable. Also in May of 2017, President Trump renewed the EB-5 visa program as part of his first major piece of legislation during his administration.
Regional centers are alternatives to EB-5 visa holders investing individually. Regional centers are federally approved third-party intermediaries that profit through commission by connecting foreign investors with developers in need of funding. They are usually private for-profit businesses that are approved by the U.S. Citizenship and Immigration Services. This basically means that someone wishing to obtain an EB-5 visa does not have to start their own business, they can invest in one that is known as a regional center.
One of the benefits of investing in a regional center is that jobs may be created indirectly through economic activity. This is different than a direct investment because a direct investment requires one to directly employ 10 American workers.
New Investor Requirements
EB-5 investors are required to invest in a new commercial enterprise in order to receive a visa. A major decision that has to be considered is whether or not the enterprise was established before or after November 29, 1990. If it was established before this date, the enterprise must be purchased and the existing business is reconstructed or reorganized in such a way that a new commercial enterprise results. If the enterprise existed after November 29, 1990, then the EB-5 applicant must plan to expand the enterprise through the investment so that a 40-percent increase in the net worth or number of employees occurs.
Aside from new commercial enterprises, there are also other commercial enterprises that apply for investments to obtain an EB-5. The term commercial enterprise applies to all for-profit activity formed during ongoing operations of a business. This can include a sole proprietorship, partnerships whether limited or general, holding company, joint venture, corporation and a business trust or other entity which may be publicly or privately owned.
Job Creation Requirements
An EB-5 visa applicant must provide proof of the capacity to preserve or create 10 new full-time roles for qualified US workers. These roles must be created within the stated two-year frame, or within a reasonable period according to the immigrant investor in a Conditional Permanent Resident visa.
The definition of a direct job according to USCIS, is that it must be an identifiable job for a qualified employee located within the commercial enterprise the EB-5 investor has directly invested their capital in. An indirect job is one that has been created collaterally or as a result of the capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor.
Capital Investment Requirements
To meet the capital investment requirements, the secured assets must be in the form of cash, inventory, intangible property and equipment. This capital is calculated according to the U.S. fair-market value for the same or similar assets. Capital cannot be borrowed, it must come from the investor themselves. The minimum investment in a business required for this visa is one million U.S. dollars. If the business is in a Targeted Employment Area (TEA), then the minimum drops to $500,000. A TEA is a rural area, or an area outside the boundary of a city or town that has a population of less than 20,000.
How to Obtain an EB-5 Visa
As with any visa, the first step should always be to make sure that you are qualified for this visa. The true start of the process is selecting your investment and putting money in the US securities or establishing a business. After this, you should hire an immigration attorney to assist you in the process of petitioning for a visa. You must prepare your visa petition with all of the necessary documents and then file it. The filing is usually done by the immigration attorney. Following the approval of your visa, you will have an interview at your country’s US embassy or consulate. The form necessary to petition for an EB-5 visa is form I-526. Once this form is approved, you submit the form I-485 or DS-260 to change the status of your green card.
There is no set timeline on when an EB-5 visa will be issued, but generally, the process takes about 18 months. This is mostly due to the fact that the processing time for form I-526 is generally 12 to 18 months. If you’re interested in an EB-5 visa, speak to an immigration attorney for more information and the steps to apply.
Beeraj Patel, Esq.
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