This document summarizes the EB-5 immigrant investor visa program. It outlines the two types of EB-5 cases (individual and regional center), requirements for family immigration, the four-step process to become a lawful permanent resident, details about regional centers and how they work, differences between individual and regional center EB-5 cases, general requirements around investing capital in a new commercial enterprise and creating jobs, lawful source of investment capital, and considerations for removing conditional status.
3. EB-5 Program Overview
• Two types of EB-5 cases: Individual and Regional
Center (RC)
• Approximately 90-95% of EB-5 cases are filed
through Regional Center Program.
• 10,000 “EB-5” immigrant visas per year
• $500,000 or $1 million investment
• Conditional green card – after 2 years investor
needs to remove conditions if investment is
sustained and jobs are created
4. Family Immigration
• Who can immigrate with the investor
Spouse
Unmarried children under 21
• “Aging out” children
5. EB-5 Structure
There are four steps to becoming a Lawful Permanent
Resident (LPR) through the EB-5 program
1. Form I-526 immigrant petition approval (9 months
adjudication)
2. Adjustment of Status (4-6 months) or Immigrant Visa
Consular Processing (6-10 months)
3. Receive 2-year conditional permanent resident (CPR)
status
4. Between 21-24 months of receiving CPR status, file
Form I-829 petition to remove the conditions (6-8
months)
5. In about 2.5 years, eligible to apply for citizenship
6. Regional Center
• Regional Center – business entity approved by USCIS
that coordinates EB-5 investment
• Multiple Regional Centers in the same geographic
location
• Specific Industries
• Choosing Regional Center:
Track record of success - I-526 and I-829 approvals
Return of Investment
Conditions of Investment
Reporting on status of investment to investors
Loan or equity projects
7. Regional Center Exit Strategy
• 5-7 years after investment
• Resale of investment share or the project property
• Outright sale of the property to another public or private
investor
• Non-recourse leveraged refinancing of the property and
distribution to investors of the excess proceeds as “return of
capital”
• Sale of the interest to a third party investor, including another
managed fund, or co-investor or co-developer
• Tax-free exchange or swap
• Exchange with an “UPREIT” (tax-free) for listed shares in a
real estate investment trust or similar public property
investment vehicle
8. Individual v Regional Center EB-5
Individual EB-5
• Investor creates a new
business or buys an existing
business
• $1 million investment
amount unless the business
is in Targeted Employment
Area
• 10 direct jobs (W-2)
• Engagement in the
enterprise (investor cannot
have merely passive role)
Regional Center EB-5
• Investment in a Regional
Center
• $500,000 investment
amount as most RCs are in
TEAs
• Indirect jobs count
• Investor can be a limited
partner, less active role
9. Individual v Regional Center EB-5
Regional Center EB-5
Individual EB-5
Manage your own business No need to manage
business
Control profits
Creation of jobs possible for Perfect for retirees
the business
Immigration is main
concern
Profits are marginal
Limited control over
investment
Easy to show job creation
RC will take care of most of
the paperwork
10. General Requirements
• Invest capital - $500,000 or $1 million obtained from lawful
source
• In a New Commercial Enterprise:
Created after 11/29/1990; or
Restructured or Reorganized; or
Expand business resulting in 40% increase in net worth or
number of employees
• At risk investment
• Engage in Management or Policy Formulation
• Create or Save 10 full-time jobs for USC, LPR
11. Investment of Capital
• Invested or in the process of investment
• Investment must be maintained throughout conditional
resident period
• Reduced capital threshold of $500,000 if Targeted
Employment Area (TEA)
“High unemployment area” – at least 150% of
national average, OR
“Rural area” – not within an MSA and not within
boundary of any city or town having a population of
20,000 or more
12. Lawful Source of Capital
• 5 years of income tax return required (business and personal)
• If foreign country does not have tax return filing requirement
– must prove it
• Evidence of lawful acquisition of capital
Business earnings
Salary
Gifts
Loans
Sale of Real Estate
• Tracing of Funds from Investor to Enterprise
13. New Commercial Enterprise
• Any for-profit business
• “New” – means formed after 11/29/1990
• New Commercial Enterprise may be a preexisting business if
was created after 1990
• If formed before, have to show substantial reorganization or
restructuring - complete transformation of nature of business
• Expansion of existing business resulting in 40% increase in net
worth or number of employees
14. “At risk” Investment
• Capital can include cash, equipment, inventory or tangible
property
• Equity interest is required (stock, LLC/LP interest, etc.)
• Commitment of capital without guaranteed return
• Loans to enterprise will not work
• No guaranteed distributions or redemption provisions
• May use escrow, conditioning release of funds to enterprise
upon approval of I-526
15. Engage in the Enterprise
• Day-to-day managerial control, or
• Policy formulation
• Corporate officer, board member, limited partner with rights
and responsibilities of ULPA
• Passive investor will not qualify
16. Job Creation
• Investment must create 10 full-time jobs for 10 workers
(USC, LPR, asylee or refugee)
• Prove employment with W-2, I-9, payroll records
• Independent contractors do not count
• Business Plan should detail the timeline for job creation
17. Job Creation
• At Removal of Conditions stage, must show jobs were
created or can be expected to be created within a reasonable
period of time
• Direct vs Indirect Jobs (RC)
Direct – employees of the enterprise
Indirect – jobs created collaterally or as a result of capital
invested in a commercial enterprise affiliated with a
regional center by an EB-5 investor.
18. Job Creation – Troubled Business
• Job Creation Exception – Troubled Business
• Troubled Business
Has been in existence for at least 2 years
Has incurred a net loss during the 12- or 24-month
period prior to I-526 filing, and
The loss for such period is at least equal to 20% of net
worth prior to such loss
• Focus on preserving jobs
Number of existing employees must be maintained
during conditional period
Total positions must be at least 10 (e.g. 8 saved and 2
created)
19. EB-5 Considerations
•
Removal of Conditions in 2 years: Capital
invested/sustained, jobs created/preserved
• Trends in Adjudication
• Statistics – over 90% RC EB-5
20. Other Visa Options
• E-2 Investment Visa – Investment can later be used for
EB-5
• L-1A Intra-Company Transferee Visa
• H-1B Work Visa