The Fifth Preference EB-5 Employment Creation—"Investor Green Cards"

Overview

Employment Creation Investors receive 7.1 percent of the yearly worldwide limit. Of the 10,000 investor visas (i.e., EB-5 visas) available annually, 5,000 are set aside for those who apply under "Regional Center" program. To date neither the overall EB-5 visa limit or the Regional Center quota has ever been exceeded.

To qualify, a foreign national must invest between U.S. $500,000 and $1,000,000 in a commercial enterprise in the U.S. which creates at least 10 new full-time jobs for U.S. citizens, permanent resident foreign nationals, or other lawful immigrants, not including the investor and his or her family.

The EB-5 visa does not require the applicant to manage the day-to-day affairs of a business. One may invest in an existing business, or a new business. More than one person may invest in the same business. The EB-5 investor may be a minority owner of the business.

EB-5 Applications are Carefully Scrutinized—Applicant’s Burden to Prove

Source of Funds and Legal Acquisition of Capital—to prove source of funds USCIS requires five years of tax returns, bank records, proof of ownership of any business, financial statements for each business and business licenses.  If the source of funds came from a specific transaction, e.g., sale of a house, inheritance or gift, proof is required that the transaction occurred by providing an official document (e.g., closing statement or contract, or other documentation).

"Investing" or in the Process of Investing "Capital"—"Capital" is cash and cash equivalents, equipment, inventory, and other tangible property; and, it must be invested and at risk in the commercial enterprise.  Indebtedness secured by assets owned by the investor may be capital provided the investor is personally and primarily liable for the debts and the assets of the enterprise.

Creating 10 full time Jobs—employment of a U.S. worker (excludes family and nonimmigrants) in a position that requires a minimum of 35 working hours per week.  The applicatio0n must include in the business plan a demonstrated need for at least 10 employees within the next two years.  The jobs must be created within the two years or full permanent residence is not granted and the investor goes out of status and must depart the U.S.

"Regional Centers"

Investments in designated "regional centers" may be for $500,000.  The "regional center" designation "pre-qualifies" the 10 new full time jobs requirement. Regional center investments also enable the intending immigrant investor to reside anywhere in the U.S. regardless of the site of the investment.

The official USCIS definition of a Regional Center is "any economic unit, public or private, which is involved with the promotion of economic growth, including increased export sales, improved regional productively, job creation, or increased domestic capital investment." 

In the Regional Center program the requirement to show the creation of at least 10 new jobs is met by a less restrictive "indirect employment creation," which allows the investor to qualify by proving a combination of 10 direct and/or indirect employees who are new to the Regional Center. 

The EB-5 regulations require involvement in management or policy making. The regulations deem a limited partner in a limited partnership that conforms to the Uniform Limited Partnership Act as sufficiently engaged in the EB-5 enterprise. However, the Uniform Limited Partnership, adopted by most states of the United States, prohibits the limited partner from actively participating in management.

On one hand you must be involved in management or policy making, while on the other hand you can't. Most partnerships that target qualifying EB-5 immigrant investors resolve this contradiction by granting the limited partners the right, as a group, to oust the general partner for "cause" and to suggest or recommend issues of overall policy.