Investor green cards, also known as the EB-5 or 5th preference employment-based immigrant visas, are granted to individuals who invest at least $1 million in a new commercial enterprise that was created or restructured after November 19, 1990. This investment must be shown to have created 10 full-time jobs for U.S. workers. In some cases, if the business is located in a targeted employment area, only $500,000 needs to be invested but 10 full-time jobs would still have to be created. A targeted employment area or TEA is an area that has an unemployment rate of at least 150% of the national average rate or a rural area designated by OMB.
It is not enough to just invest money. The investor also has to prove that he or she obtained the funds through a lawful source. For some investors, this will be fairly easy if they can show personal or business tax returns and bank statements going back long enough to prove the funds came from a lawful source. For investors from countries where tax returns are not filed or where financial institutions are not well-documented, this may pose a problem. Therefore, it is important to discuss your case, especially your ability to prove your source of funds with your EB-5 immigration attorney.
The EB-5 can be approved through individual investment in a project, for example, one investor opening up a restaurant or hotel. However, the vast majority of EB-5 applications are approved through regional centers that pool larger resources of many investors together, in which the investors play a back role in managing the business. We will explain this distinction in more detail below.
An EB-5 investor must be engaged in the management of the enterprise either through day-to-day managerial control or through policy formulation. A purely passive role is not permitted in the EB-5 category, but the investor does not have to manage the operations on a daily basis either.
The EB-5 investor should be a corporate officer or member of the board of corporate officers, a partner in a limited partnership, or someone who can exercise policy formulation by other means.The investor does not have to be in control of a majority of the organization. He or she just needs to have some control or ability to formulate policy and this can be achieved even through minority holdings.
There are over 200 regional centers in the United States active today. A regional center is an organization or agency that seeks to promote economic growth in a particular geographical region through improved economic activity that has been approved by USCIS such as investments. The advantage of using a regional center is that the investor does not have to actively be involved in the day to day management of the business and may take a more passive role. In addition, the investor maybe able to show creation of less than 10 full-time jobs, because in a regional center they can use reasonable economic methodologies to show indirect job creation. Each center will have its own modeling.
As with any investment of this magnitude, you will have to be careful and consider each investment opportunity very carefully. If regional centers go under, investors may lose their money and their green cards. If you are not a savvy investor, you should hire a financial advisor to help you evaluate the financial stability of a regional center you are interested in.
An investor may also be eligible for EB-5 classification by buying and expanding an existing business. However, with expansion, the investor will have to show the expansion will result in an increase of 140 percent of the pre-investment number of jobs, or retaining all existing jobs in a troubled business that has lost 20% of its net worth over the past 12-24 months.
The EB-5 Process
The first step in the EB-5 process is to file the I-526 immigrant petition by alien entrepreneur to USCIS. You must file not only the form, but many supporting documents that prove your eligibility requirement for EB-5 classification, including:
- Establishing a new commercial enterprise
- Investing the requisite capital amount
- Proving the investment comes from a lawful source of funds
- Creating the requisite number of jobs
- Demonstrating that the investor is actively participating in the business
- Creating the number of jobs as required
Once the I-526 is approved, the individual can pursue consular processing of immigrant visa for the investor and his family members, or if they are here in another valid status, they can file for adjustment of status.
Conditional Residence and Removal of Conditions
Once the EB-5 is approved, the investor and derivative family members will receive conditional permanent resident status. This means they will get a green card, but it is restricted and will expire in two years from the date it is granted. This is done in order for USCIS to ensure that the immigrant investor will indeed follow through with his or her investment and create those 10 full time jobs within the 2 years. If they fail to do so, their green card will be revoked. In order to remove the two-year condition, the investors must file a Form I-829, Petition by Entrepreneur to Remove Conditions, within 90 days before the conditional card expires.
Filing for Your EB-5
The EB-5 process is very complex. You want to choose the best EB-5 immigration attorney for your case in order to minimize your risk of losing your investment or failing in the EB-5 process and getting your green card denied. If you are ready to start your EB-5 case, or if you have additional questions about the process, call our office today. We will help you determine the best strategy and help you avoid common issues that can lead to delays and denials.