The EB-5 visa category has been available since 1990. However, the program has undergone significant revisions over the years to account for the effects of inflation and other factors. The purpose of the program is to help foreign nationals obtain a green card when they invest money in the United States. At the time of this writing, applicants have two options for investing and obtaining their EB-5 visa:
- First, they can invest $1,800,000 and create at least 10 full-time jobs in the United States.
- Second, they can invest a minimum of $900,000 in a targeted employment area (TEA) designated by the federal government and create at least 10 full-time jobs.
A TEA is an area with high unemployment in either an urban or rural sector and may be set by state or federal governments. For the purposes of the EB-5 program, only federally-designated TEAs are acceptable. The jobs created cannot be filled by the investor and/or their immediate family.
How Many EB-5 Visas Are Granted Annually?
The US federal government offers 10,000 EB-5 visas annually. Visas are provided not only for immigrants seeking to invest in US-based businesses but also for their immediate family members (spouses and dependent children under 21 years of age). However, the EB-5 visa program is unevenly split between two groupings:
- 7,000 visas are granted to immigrant investors seeking to create new commercial enterprises.
- 3,000 visas are granted to immigrant investors enrolling in the Immigrant Investment Pilot Program.
Understanding the EB-5 Visa Program
As mentioned above, EB-5 visas issued each year are split between new commercial enterprises and the IIPP.
- New Commercial Enterprise – Immigrant investors choosing this route must prove they are investing their funds into a new commercial enterprise. “New” means that the business must have been founded on or after the date the law was enacted (November 29, 1990, in this instance). This means that investors are allowed to invest in existing businesses, although there are requirements that must be met in this instance.
- IIPP – Within the Immigrant Investment Pilot Program, investors can put their money directly into a new or existing job-generating commercial enterprise, or into a Regional Center, which is an investment vehicle managed by a third
party and assumes the job-creation responsibilities inherent with granting an EB-5 visa.
Note that Regional Centers may involve additional costs, as it is legal for them to charge an administrative fee to manage investments on behalf of investors. These investments are not required to employ 10 US workers, but they must show that 10 qualifying jobs have been created indirectly through the Center’s activities.
All businesses must meet specific criteria to be eligible, including:
- An existing business must have been established after November 29, 1990.
- If the business was established before that date, the investor must have restructured or reorganized the business in such a way that it becomes a new enterprise.
- The business can also be expanded through the investment, increasing its net worth by a minimum of 40% or increasing the number of employees working within the business by 40%.
What Commercial Enterprises Can Be Invested In?
Under the EB-5 program, investors can take part in “any for-profit activity formed for the ongoing conduct of lawful business” according to the US Citizenship and Immigration Service. This includes sole proprietorships, limited and general partnerships, holding companies, corporations, joint ventures, business trusts, and other entities. It also includes both privately and publicly owned enterprises.
What Is the Process to Obtain an EB-5 Visa?
Enrolling in the EB-5 program requires filing Form I-526 with the US Citizenship and Immigration Services. This form must be accompanied by supporting documentation that demonstrates the investor’s eligibility according to a number of important requirements, including:
- Investment in a qualifying commercial enterprise.
- Proof of active involvement in the day-to-day operation of the business (passive investors are not allowed in the EB-5 program).
- Proof of investment – standard investments require $1.8 million, but qualifying TEA investments only require $900,000. The funds cannot be made as a loan, grant, bond, or other form of debt to the company, and the investment capital must be in cash or approved cash equivalents. Escrow may be used, and the investor will need to prove that their capital is at risk via evidence of actual and intended uses (the investor must show that the investment is active, not just a passive deposit).
- The investment funds must be traceable and lawful under US law.
- The investment must be shown to create or preserve at least 10 jobs filled by US citizens, lawful permanent residents, or other lawful immigrants employed in the United States, not counting the investor or his/her family members.
In addition, investors must complete the four steps outlined below. Once completed successfully, the investor and his/her spouse and dependent children under 21 years of age will become lawful permanent US residents with the option to apply for full US citizenship five years after becoming a permanent residence.
The four steps required for enrollment in the program include:
- Locating the EB-5 Project – A suitable business project must be located first.
- Investment and Petition – Next, the investor must make the required investment and submit the I-526 petition and supporting documentation.
- Two-Year Conditional Residency – The investor now has two years of conditional permanent residency in which to put the business project to work. For investors who are already lawfully in the United States, Form I-485 must be completed and filed. If not, Form DS-260 must be completed and filed.
- Unconditional Permanent Residency – Finally, 90 days before the two-year anniversary of the conditional residency, the I-829 petition must be submitted to the USCIS to obtain unconditional permanent residency.
- Once unconditional permanent residency has been granted, the investor, their spouse, and their dependent children under 21 years of age can legally apply for full US citizenship after five years.