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EB Investor’s Green Card

Overview

The U.S. immigrant investor program was created by Congress in 1990, to attract immigrant investors to the United States to invest capital, create jobs and stimulate the economy. This category is also referred to as the fifth employment-based preference (“EB-5”).

Overseen by the U.S. Citizenship & Immigration Services (USCIS), the U.S. Immigrant Investor Program (EB-5) provides foreign nationals the opportunity to become legal permanent residents (green card holders) upon making an investment of $1.05 million, or $800,000 in a designated Targeted Employment Area, in a new commercial enterprise. Each unit of investment must create at least ten new, direct or indirect jobs for U.S. workers. There are other provisions such as the investment must be maintained, that the investment creates regional productivity, and others. However, the main requirement is the creation of ten American jobs.

For official information regarding the EB-5 Program, please visit EB-5 Immigrant Investor webpage.(https://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/about-eb-5-visa)

The EB-5 Program was introduced in 1990 but only attracted a relatively small number of immigrant investors. In 1993, the U.S. government modified it to include a Pilot Program also known as the Regional Center Program, under which the federal government could designate “Regional Centers” so that multiple immigrant investors could pool their funds into larger job-creating businesses in certain target regions and industries. The primary goals are to promote domestic economic growth, improve regional productivity, and create jobs. Through the EB-5 program, local Regional Centers are approved and authorized to raise capital from immigrant investors.

The EB-5 Pilot Program has been reauthorized several times, most recently by the EB-5 Reform and Integrity Act of 2022 (“2022 EB-5 Act”), which was signed into law on March 15, 2022. Taking effect on May 16, 2022, the new EB-5 Act made several major changes to the EB-5 program including:

  1. Minimum investment amount increased from $1 million to $1.05 million, and the reduced amount for investments in targeted employment areas (TEAs) from $500,000 to $800,000. Beginning January 1, 2027, and every five years thereafter, the minimum investment amount for standard EB-5 projects will be subject to increases keyed to the Consumer Price Index. For TEAs and infrastructure projects, the minimum investment amount will be increased to 60% of the standard investment minimum.
  2. Allowing concurrent filing: Investors for whom an EB-5 immigrant visa is immediately available is permitted to file their EB-5 petitions at the same time as their applications for adjustment of status to permanent residence, or file an adjustment with a pending EB-5 petition. This will enable them to obtain employment authorization and travel permission while their cases are pending.
  3. Visa Reserved: The new law sets aside 32% of the annual 10,000 EB-5 immigrant visa for specific types of EB-5 projects: 20% for rural area, 10% for high unemployment area as designated by USCIS; 2% for qualifying infrastructure projects administered by a federal, state or local government entity; unused reserves carry over to add to reserves for the next year, but in the third unused year go without reservations.
  4. Shortening of “Sustainment Period.” For investors who filed I-526E after March 15, 2022, the 2022 Act requires only that from the beginning the investor’s capital “is expected to remain invested for not less than two years” as long as the requirement number of jobs are created. This means that post-enactment investors could receive return of capital investment once it has been invested for two years and upon proof of creation of required jobs, even if the investor has not yet become a conditional resident or even has not yet received I-526E adjudication.
  5. Federal authority to designate Targeted Employment Areas. The Department of Homeland Security will be invested with the sole authority to designate TEAs; state and local government authorities will no longer have the ability to make these designations.
  6. Reauthorized the Pilot Program until September 30, 2027, with grandfathering protection to all pending applications filed on or before September 30, 2026.
  7. Additional fees for EB-5 petitioners. Foreign investors will be required to pay a new $1,000 fee that will be allocated to the Integrity Fund.

Frequently Asked Questions about EB-5 Investor Green Card:

1) What procedures are involved for applying to become an EB-5 Investor?

The EB-5 investor green card program is divided into two distinct phases. In the first phase the immigrant investor is granted a conditional green card, valid for two years. If after two years the investor has created the requisite jobs and maintained the investment the permanent residence is made unconditional and permanent.

2) What types of EB-5 Investment applications are available for selection?

There are two types of EB-5 investment opportunities:

  1. Direct Individual Investment: A $800,000 (if the investment is made in a TEA area) or $1,050,000 investment into a business that is managed directly by the immigrant investor that requires constant detailed hands-on accountability and daily business management as well as direct job creation performance and proof
  2. Regional Center Based Investment: A $800,000 (if the investment is made in a TEA area) or $1,050,000 investment into a federally approved Regional Center which provides complete turnkey management of all business investments, daily management and full accountability for meeting the required job creations.

3) What are the basic requirements for an EB-5 Investor?

  1. MONEY MUST BE FROM LEGITIMATE SOURCES – The investor must be able to show the legal source of investment capital.
  2. REQUIRED INVESTMENT – The investment required to be made in a commercial enterprise varies depending on where the commercial enterprise is located and the unemployment rate in the geographic area. In most areas a qualifying investment is US$1.05 million. A qualifying investment in “targeted employment areas” is only $800,000. In virtually all Regional Centers, the investment amount is US$800,000).
  3. MUST CREATE 10 FULL-TIME JOBS – The jobs may be held by any non-immediate family member including U.S. citizens, permanent residents, or other lawfully authorized workers to be employed in the United States.
  4. MONEY MUST BE PUT AT RISK – The investor must irrevocably commit his/her assets to the enterprise. May not design an arrangement in which the full amount is not put toward the investment or not at risk. “Capital” is defined by the INS as cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien, provided the alien is personally and primarily liable.
  5. THE INVESTOR MUST QUALIFY AS AN ACCREDITED INVESTOR: An “accredited” investor, as that term is defined by Regulation D of the Securities Act, means any investor meeting at least one of the following conditions: 1) any natural person whose individual net worth (or joint net worth with that person’s spouse, if applicable) at the time of purchase exceeds $1,000,000; or 2) any natural person who had an individual income in excess of $200,000 or joint income with that person’s spouse in excess of $300,000 in each of the two most recent years and who reasonably expects an income in excess of $300,000 in the current year; or 3) any other “accredited investor” as that term is defined in Regulation D as adopted by the Securities and Exchange Commission; or 4) Has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of an investment in the Units, and of making an informed investment decision, and does not require the use of a Purchaser Representative.
  6. ACTIVE PARTICIPATION IN THE OPERATIONS OF THE BUSINESS – The alien must be actively involved in the management of the business, either through the exercise of day-to-day managerial control, or through policy formulation.
  7. MUST BE ACTIVE ENTERPRISE – A commercial enterprise is any for profit activity formed for the ongoing conduct of lawful business. It may be a sole proprietorship, a partnership (limited or general), a holding company, a joint venture, a corporation, a business trust, or other entity that may be publicly or privately owned. A commercial enterprise does not include a non-commercial activity such as owning and operating a personal residence.

4) What is a “Regional Center”? What are the differences between the Individual Program and the “Regional Center” Program?

Special rules apply where the investment is made within an approved “Regional Center”, which is defined by the regulations as “any economic unit, public or private, which is involved with the promotion of economic growth, including increased export sales, improved regional productivity.

In comparison with the individual program, the major difference in documentation and thus the advantage and benefit for the EB-5 Regional Center program are as follows:

  1. Indirect job creation is allowable
  2. The investment in the Regional Center has been pre-approved by the USCIS with respect to the qualifying amount of the investment and with respect to the job creation requirement. This eliminates the need to deal with the many complicated issues involved in an individual EB-5 petition for which the investment enterprise has not been pre-approved. As a result, the government generally expedites adjudication of this type of investor petition.
  3. Investors are not required to manage their investment on a daily basis so they may pursue other professional and personal ventures. There is no minimum education requirement and no business or management experience requirement.

5) What types of capital qualifying for EB-5 Investment?

For the Individual program, EB-5 “Capital” may include cash and cash equivalents, equipment, inventory and other tangible property. Investor’s contribution of cash proceeds from a loan may be considered capital, provided assets of commercial enterprise are not used to secure repayment by investor.

For the “Regional Center” programs, almost all of them require cash investment, including investor’s contribution of cash proceeds from a loan that was secured by investor’s personal property.

6) Is there any risk for EB-5 investment, and when and how can the investor withdraw his/her EB-5 investment?

The law requires that the EB-5 investment must be “at risk”, and that the investor must irrevocably commit his/her assets to the enterprise; may not design an arrangement in which the full amount is not put toward the investment or not at risk. Further, not to jeopardize the investor’s green card status, the investment must be maintained at least for two-years and upon completion of the job creation requirement.

With respect of the risk and return of the EB-5 investment, for individual program, it all depends on the specifics of each project. For a “Regional Center” program, the investor is usually required to commit the investment of $800,000, for at least 2-years under the new 2022 EB-5 Act; during which time, investor may be entitled for annual dividend distribution, if any. At the end of 2-years, and if the required job creation number was met, depending on the “Regional Center”, there may be an exit strategy set for the investor to redeem his/or her investment in different forms, such as cash redemption, or ownership of real estate, or company stock.

7) What does the CMA law firm offer in Representing EB-5 Investors and EB-5 Regional Centers?

With a 100% approval rate, our immigration attorneys have developed an acute and particular expertise in representing individual investors towards obtaining EB-5 immigrant visas through Regional Center projects and through investments in their own individual project. We also represent developers, private equity and organizations in successful applications for designation of EB-5 Regional Centers, filing and seeking approval of the project exemplary I-956F petitions and have served as lead designated immigration counsel to established Regional Centers and their investors in processing I-526E and I-829 visa petitions.

8) FOR EB-5 INVESTORS, Why Should You Retain the CMA Law Firm Before You Start Your EB-5 Application?

U.S. Immigration Law is ever changing and complex. Qualifying a person for EB-5 status is one of the most complicated subspecialties in immigration law. A sophisticated knowledge of corporate, tax, investment, securities and immigration law are all required.

Regional Centers compete strongly for foreign national investment funds. It is Critical that Investors retain a knowledgeable Law Firm to represent THEM when analyzing the Regional Center Options.

More Information
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