The "EB-5" visa, as it is commonly called, is an interesting option for non-citizens to apply for lawful residence in the U.S. without family or an existing offer of employment. It is also becoming a more regularly-used option for business enterprises seeking capitalization for various types of project development in the United States.
A non-citizen may obtain a "green card" and lawful permanent resident status in the United States by investment in a U.S.-based business of at least $1 million, or in certain circumstances $500,000.
To qualify, the individual must demonstrate:
- Investment in a new "for profit" commercial enterprise (established after November 29, 1990) or in a business existing before such date that is reorganized, or has a 40% increase in value or employees by the investment.
- Active managerial responsibility (day-to-day or policy-level; limited partnerships may meet this criterion).
- Lawful means of accrual of capital invested: examples include production of personal and business tax returns for previous 5 years; documents identifying other sources of money.
- Evidence that at least 10 full-time jobs will be created: a comprehensive business plan must be provided to demonstrate the likelihood of such job growth within two years.
- If an investment is made into a "troubled business" that has had a net loss exceeding 20% of net worth in past 1 or 2 years, the business plan must show how current employee levels would be sustained.
A minimum of $1 million must be invested (cash, equipment, inventory, other tangible property, cash equivalents, indebtedness secured by investor; assets of the new enterprise cannot be used to secure the indebtedness). If investment is made in a "targeted employment area" (rural area or high unemployment area), a $500,000 investment is sufficient.
A petition ("Form I-526") is filed with U.S. Citizenship and Immigration Services, with full documentation to support the petition and meet all above requirements. Upon anticipated approval, the investor and his or her family may then apply for lawful permanent resident status. They are given a two-year "conditional" residence, and must in two years apply to remove conditions by showing that their investments have been made and that the business plans have been implemented to create the needed new employment.
The "Regional Center" approach
If an investor does not want to actively operate a commercial enterprise, he or she may instead invest in a "regional center" that has been approved by U.S. Citizenship and Immigration Services to receive such investment. There are more than 200 regional centers that have been approved for this purpose.
An investor must invest the required minimum amount (usually $500,000 if the regional center investment is in a "targeted employment area"), and must file a petition showing how the investment in the regional center will be used by the regional center to create (directly or indirectly) at least 10 new jobs.
"Regional Centers" must be approved by U.S. Citizenship and Immigration Services before they can be utilized by immigrant investors to qualify for immigrant status in the U.S. A petition is filed, with a substantial filing fee, which must include a proposal that:
- Identifies a clear, contiguous geographical area to be served by the center.
- Provides a detailed description of how the capital investment made into the area will create jobs (directly or indirectly). This business plan must be supported by a full economic and statistical analysis to demonstrate viability.
- A detailed prediction of regional and national economic impact of the center on the area.
- Demonstrates how the center will be operated to attract investors, find projects, structure capital, and supervise all investment activities.
A regional center petition must be substantially documented to ensure the highest likelihood of success. U.S. Citizenship and Immigration Services may take between four and eight months under current processing estimates to adjudicate a regional center petition. After anticipated approval, a regional center can receive capital investments from individual investors, which investments must be used toward projects that will lead to direct or indirect job creation of 10 or more full-time positions per investment made. The individual investor must include such documentation of anticipated job creation in his or her own petition, to be approved in conditional resident status.
Conclusion
The "EB-5" Investor program is a means for individuals with sufficient investment capacity to immigrate to the United States, and for business enterprises to secure needed capital for projects, development, and expansion. The "regional center" approach may be attractive to individual investors who are not interested in active participation in a business enterprise, and to business entities with "shovel-ready" projects looking to gain access to capital necessary for their plans. Depending on the time frame, a business group may desire to establish its own regional center, or examine participation in already approved regional centers.
Hiscock & Barclay, LLP, has the knowledge and experience with the intersecting legal arenas of immigration, international business, corporate, labor and employment, and financial institutions and lending legal practice areas that allows our firm to meet individual, corporate-level, and wider regional and global-level, needs of clients. We welcome the opportunity to serve interested individuals and business enterprises alike in their interest and legal needs. Please contact Eric Schultz at (716) 566-1412 or eschultz@hblaw.com or Gretchen Aylward at (716) 566-1558 or gaylward@hblaw.com at your convenience if you wish to review how the "EB-5" immigrant investor program may be of value to you.