General
What is the EB-5 Immigrant Investor Program?
The US Congress created the EB-5 Program in 1990 to stimulate the U.S. economy through job creation by attracting investments from qualified foreign investors. In return, the EB-5 Program provides a direct path to US Permanent Residency and US Citizenship for qualified foreign investors, their spouses, and unmarried children under 21 upon approval of their I-526E Immigrant Investor Petition.
Over the years, the EB-5 Program has become very popular as it is a straightforward path to obtaining permanent U.S. Green Cards. Since 2000, more than 117,000 EB-5 investors from across the world have become U.S. residents through the EB-5 program.
Under the EB-5 Program, each investor is required to invest a minimum of $1,050,000 USD, or a reduced amount of $800,000 USD when investing in high-unemployment or rural targeted employmet areas (TEAs). Additionally, they must prove that their EB-5 investment has either created or preserved a minimum of 10 full-time American jobs.
The EB-5 Visa was originally conceived for individual entrepreneurs that would fund and manage their own businesses. Under the original program, investors would only be able to claim job creation for direct employees on their payroll.
In 1992, Congress boosted the economic impact of the EB-5 program by authorizing the creation of Regional Centers to pool EB-5 capital from multiple foreign investors to fund projects with substantial job-creation impact on regional economies. Regional Center investors benefit greatly as they can claim not only direct jobs, but also indirect and induced jobs from capital expenditures on construction activities and project revenues. In this way, Regional Centers reduce the challenges of the required employment creation and provide a safer path with regards to the immigration path.
As part of the Consolidated Appropriations Act, 2022 (Public Law 117-103), President Biden enacted the EB-5 Reform and Integrity Act (RIA) on March 15, 2022 to improve the transparency and efficiency of the EB-5 Regional Center Program and extended it through September 30, 2027.
What are the benefits of the Green Card?
The EB-5 visa is a direct path to Permanent US Residency (Green Card). The Green Card allows the investor and their immediate family to live, study, work, and retire anywhere in the U.S. This program affords foreigners all the advantages of the American lifestyle while contributing to the U.S. economy through job creation. It is open to individuals from any country.
The EB-5 program stands as an ideal route for foreign nationals who have the required capital to secure permanent residency in the U.S. The U.S. is a safe harbor for your family as well as for your personal and business assets. Any member of your family with a Green Card can enter the United States at any time and stay as long as he or she wishes.
This visa is unique as it doesn’t require a U.S. employer sponsor or specific skills or knowledge. Furthermore, if you invest in a Regional Center project you are not required to work. It is your EB-5 capital, along with all the other sources of capital for the project, that will create the minimum 10 full-time and permanent jobs you will need.
After investing in a qualifying project and receiving approval of the I-526E Immigrant Petitions by USCIS, an EB-5 investor, his or her spouse, and unmarried children under 21 will receive Conditional Permanent Residency (CPR) status. At this moment, you will enjoy the same rights and benefits as every other lawful permanent resident of the United States.
Two years later, the applicant will request the Conditional Status on their residency to be removed with the I-829 Petition. Once this form is approved, the applicant receives Legal Permanent Resident (LPR) status. After five years have passed since the applicant received Conditional Residency status, he or she is eligible to request U.S. citizenship.
The EB-5 visa offers several benefits to foreign investors:
- It’s among the quickest ways to obtain U.S. permanent residency for the investor and their immediate family.
- There’s no need for a visa sponsor.
- Unrestricted employment opportunities in the U.S.
- EB-5 investors holding Green Cards have full access to the United States for personal, trade and business purposes.
- EB-5 investors may work, live, or own their businesses anywhere in the U.S., including states with no state income tax.
- The U.S. is a clear leader on internationally recognized colleges and universities for both undergraduate education and graduate studies.
- The EB-5 Visa gives access to public schools and more affordable in-state tuition rates at public colleges and universities, some of which are among the best in the USA.
- Students may work in the U.S. while they attend college.
- Higher acceptance rates at US public universities for Lawful Permanent Residents compared to international applicants.
- University students have access to student loans from the government and other sources.
- In case of political upheavals in the investor’s home country, the investors and their family can quickly move to the U.S.
- Eligibility for U.S. citizenship after a minimum of five years of permanent residency.
- Permanent residents travel to the U.S. without the need of a visa.
Who is eligible to receive permanent residency (Green Card)?
The investor, spouse, and all unmarried children under the age of 21 at the time of filing the I-526E Immigrant Investor Petition are eligible to receive Green Cards through the EB-5 program.
The Child Status Protection Act (CSPA) “freezes” a child’s age as of the I-526E petition filing date and during the entire time that the petition is being processed by USCIS.
Are EB-5 visas available to persons from any country in the world?
Technically, yes, a person from any country in the world is eligible to apply for an EB-5 visa. However, some countries have less than reliable tax and financial documentation methods which will require persons from those countries to actively work with their immigration attorney to provide adequate source of funds authentication to the USCIS.
Where can I find copies of relevant forms, laws, and regulations to study?
All of the relevant forms can be found on the USCIS website.
What is the difference between a “conditional” and a “permanent” Green Card?
The two Green Cards offer the same rights and privileges. Under USCIS regulations, an investor who is approved for an EB-5 visa receives a conditional Green Card that is valid for two years. One year and nine months after the conditional Green Card is issued, a three-month window opens up during which an investor’s immigration attorney files another application with the USCIS to verify that all funds have been invested and that job creation requirements have been met. When the conditions are removed from the temporary/conditional Green Card, full resident status is granted and a permanent Green Card is issued to the investor. As said, both cards provide identical rights and privileges.
What issue typically causes the most problems when applying for an EB-5 visa?
The most common problem area for investors has been insufficient documentation of the source and path of funds. Many people try to disclose the least possible information only to have the file returned with a request for further information. It is better to provide too much information rather than too little . In this era of terror alerts and suspicions about money laundering, USCIS adjudicators require a well-documented source and path of funds.
How long must I remain in the United States each year?
A good rule of thumb is to try to stay in the U.S. for at least half of each year, or it may be deemed that they have abandoned their permanent residency status. This presence does not need to be continuous as U.S. residents can travel. Extended absences, particularly those over six months, may also disrupt the continuous residency requirement for naturalization.
You should also bear in mind that an EB-5 investor must enter the United States within 180 days after they received their EB-5 visa. The investor must then establish residency in the United States. Evidence of intent to reside includes opening bank accounts, obtaining a driver’s license or social security number, paying state and federal income taxes, and renting or buying a home.
What is the difference between permanent residency and citizenship?
From the first day you become an EB-5 Green Card holder, you have most of the rights and obligations of U.S. citizens, except that you cannot vote and hold certain public offices. You may live anywhere in the U.S. permanently and get access to the U.S. Social Security system. Holding a Green Card allows your children to take advantage of educational opportunities in the U.S., potentially qualifying for lower in-state tuition at public universities and favorable admissions processes. As an EB-5 green card holder, you have the liberty to be employed by any company or to start your own business without needing additional work permits or sponsorships. You may travel abroad but need to keep in mind that extended absences for over 6 months may raise questions about your immigration intention.
One of the most important rights Legal Permanent Residents (LPR) possess is the right to apply for U.S. Citizenship after residing in the United States for five (5) years, including the 2 years of your Conditional Permanent Residency (CPR). To apply for citizenship, you must maintain a physical presence for a minimum of 30 months during the 5 years preceding your application for naturalization.
Applying for U.S. citizenship, while not mandatory for Legal Permanent Residents (LPRs), offers considerable advantages. Key among these is that citizenship allows for a broader scope of family reunification, enabling U.S. citizens to petition for immigration of extended family members like parents, siblings, and married adult children, which is a privilege not extended to LPRs. Once you become a U.S. citizen, you can live abroad without fear of losing your U.S. citizenship. Your children, even if born abroad, will be considered U.S. citizens. You will also have the right to vote, hold public office and work for the U.S. federal government.
What’s the best way to lower risk in an EB-5 Investment?
An optimal way to reduce risk may be to invest in a project sponsored by a Regional Center whose business model is aligned with the repayment of your investment and who’s project has low sunk financing costs that can withstand a market downturn and . For more information about this we invite you to watch our video.
What is a New Commercial Enterprise (NCE)?
According to EB-5 regulations, an investor must contribute capital to a New Commercial Enterprise (NCE) that conducts a legitimate, profit-oriented business. This NCE is usually organized as either a limited partnership (LP) or a limited liability company (LLC).
Therefore, the EB-5 investor becomes either a limited partner or a member, while the project’s sponsor acts as the general partner or managing member. Within the framework of the EB-5 Regional Center Program, the NCE uses the invested EB-5 funds to finance the Job Creating Entity (JCE), which can be either in the form of an equity investment or a loan.
The JCE, as the project developer, is tasked with both the development of the project and the creation of jobs, fulfilling the EB-5 investor’s requirements for obtaining a green card.
What is a Job Creating Entity (JCE)?
The Job Creating Entity (JCE) is a project entity that obtains the EB-5 capital from the New Commercial Enterprise (NCE) and is responsible for generating at least 10 jobs for each EB-5 investor. In cases of direct, standalone EB-5 investments, the NCE and JCE often are the same entity, with the EB-5 investor playing an active role in the business’s decision-making or daily operations. For these direct investments, only direct job creation can be counted. Conversely, in Regional Center investments, the NCE and JCE are typically distinct entities. Regional Center projects have the benefit of counting not only direct jobs, but also indirect and induced jobs created by the JCE to fulfill the job creation requirements of EB-5 investors of the NCE. This makes job creation more plentiful and predictable.
What is visa retrogression?
EB-5 Visa retrogression occurs when there are more people applying for EB-5 Visas from any given country than there are available visas for said country in a given fiscal year. As a result, the U.S. government puts a hold on issuing more visas, causing a backlog or delay for applicants. It essentially means that prospective EB-5 Visa recipients have to wait longer than usual to get their visas, akin to a traffic jam in the immigration process. This is a very similar situation to the EB-2 and EB-3 retrogressions facing Indian born applicants.
As of January 2024, EB-5 investors from China that invested before the EB-5 Reform and Integrity Act of 2022, are facing an 8-year retrogression. Those from India are facing a 3-year retrogression.
Retrogression is something to avoid at all costs because it creates substantial challenges and uncertainties for EB-5 Visa applicants, affecting their immigration plans, financial stability, and overall well-being. The good news is that applicants can protect themselves against the risks and effects of retrogression by analyzing which EB-5 categories have the most visas available.
Since there is a 7% visa cap per country, China and India became oversubscribed pre-RIA. If it were not for the RIA Reserved Visa categories, new EB-5 investors from these two countries would also have to wait several years for a visa. Even though by looking at the Visa Bulletin one will see all EB-5 Reserved Categories as “Current” for India and China, it’s imperitive to speak with your immigration counsel and regional center to hear the latest statistics of petitions filed to estimate which categories will retrogress sooner.
What are “Reserved EB-5 Visas” or “Set-Asides”?
The areas where the U.S. Congress wants to direct EB-5 investment are known as Targeted Employment Areas (TEA). Since job creation is needed in these locations, the TEA minimum investment amount is US $800,000, instead of the US $1,050,000 required for more affluent areas. Although the lower TEA investment benefit has been part of EB-5 since its inception in 1990, the EB-5 Reform and Integrity Act of 2022 (RIA) established three Reserved Visa Categories and assigned 32% of all EB-5 Visas to them.
The Reserved Visas are also known as “Set-Asides” as 20% of all EB-5 Visas are earmarked for Rural TEA Projects, 10% for High Unemployment TEA projects, and 2% for Infrastructure projects. Also, the RIA mandates that EB-5 Petitions for Rural Projects be given priority processing (goal of 4 months). This is not surprising, as the two US Senators that sponsored the law, Chuck Grassley (Republican, Iowa) and Patrick Leahy (Democrat, Vermont) are from rural states.
This provision is allowing EB-5 Investors from oversubscribed countries, namely China and India to be given a Visa number and get Conditional Residence as long as their visa category does not become oversubscribed.
What are “Unreserved” EB-5 Visas?
Along with the creation of the Reserved Visa Categories the EB-5 Reform and Integrity Act of 2022 (RIA) also created the Unreserved Visa Category. It consists of 68% of the annual allotment of EB-5 visas to be issued. This category includes all non-TEA EB-5 investors whose minimum required investment is $1.05M USD. It also includes all legacy EB-5 investors that invested before the RIA. Their I-526 Petitions may not get processed as fast as those for rural, priority processing projects whose target average processing time is 4 months.
Further, if you were born in China, and invest in “unreserved visa” project, you may face great delay in getting your EB-5 visa. As of September 2023, there are nearly 20,000 EB-5 investors from China, not counting their spouse and children, who already have their I-526 Petitions approved and are waiting for visa availability, which is subject to a 7% country cap. There are also, nearly 2,400 EB-5 Investors from India in a similar situation.
The Reserved Visas are also known as “Set-Asides” as 20% of all EB-5 Visas are earmarked for Rural TEA Projects, 10% for High Unemployment TEA projects, and 2% for Infrastructure projects. Also, the RIA mandates that EB-5 Petitions for Rural Projects be given priority processing (goal of 4 months). This is not surprising, as the two US Senators that sponsored the law, Chuck Grassley (Republican, Iowa) and Patrick Leahy (Democrat, Vermont) are from rural states.
This provision is allowing EB-5 Investors from oversubscribed countries, namely China and India to be given a Visa number and get Conditional Residence as long as their visa category does not become oversubscribed.
What is the Sustainment Period?
On October 11, 2023, the US Citizenship and Immigration Service (USCIS) provided their long-awaited guidance about the EB-5 investment timeframe in EB-5 Reform and Integrity Act of 2022 (RIA) to satisfy the “at risk” requisite of the EB-5 visa. For pre-RIA investors, the sustainment period is the two years of their Conditional Residence. For post-RIA investors is “two years from investing” However, the start of this two-year clock is ambiguous, needs further clarification, and expectations to receive EB-5 capital back in two years is unrealistic as this depends on the terms of the Partnership Documents and when the Project gets liquidity. Also, their interpretation is non-binding, is not yet in the USCIS Policy Manual and is likely to be challenged in courts.
Further, if you were born in China, and invest in “unreserved visa” project, you may face great delay in getting your EB-5 visa. As of September 2023, there are nearly 20,000 EB-5 investors from China, not counting their spouse and children, who already have their I-526 Petitions approved and are waiting for visa availability, which is subject to a 7% country cap. There are also, nearly 2,400 EB-5 Investors from India in a similar situation.
The Reserved Visas are also known as “Set-Asides” as 20% of all EB-5 Visas are earmarked for Rural TEA Projects, 10% for High Unemployment TEA projects, and 2% for Infrastructure projects. Also, the RIA mandates that EB-5 Petitions for Rural Projects be given priority processing (goal of 4 months). This is not surprising, as the two US Senators that sponsored the law, Chuck Grassley (Republican, Iowa) and Patrick Leahy (Democrat, Vermont) are from rural states.
This provision is allowing EB-5 Investors from oversubscribed countries, namely China and India to be given a Visa number and get Conditional Residence as long as their visa category does not become oversubscribed.
Process
What are the steps for processing an EB-5 visa application?
In order to complete the EB-5 process and become a permanent U.S. resident, foreign investors must work through the following steps:
Step 1, USCIS Form I-526E, Immigrant Petition by Regional Center Investor. This is your first official step in the EB-5 process after completing your Accredited Investor Questionnaire, choosing a project, signing all of the documents to subscribe to a Regional Center project, and placing your funds in escrow with the project. The I-526E petition is submitted to the USCIS by your immigration attorney along with supporting documentation that clearly demonstrates that your investment and the project meets all EB-5 requirements.
If you already residing in the U.S. under certain visas (H1-B, L-1, E-2, F-1, etc.), you may expedite receiving your EB-5 benefits with a “Concurrent Filing”, as explained below.
Note: If you are doing your own direct investment and will manage your own business, you will need to file Form I-526, Immigrant Petition by Standalone Investor instead of an I-526E Form.
Step 2A, Adjustment of Status (Form I-485). After receiving approval of the I-526E petition, investors already residing in the U.S. may submit a completed application to Register Permanent Residence or Adjust Status (Form I-485) to the USCIS.
Under the new EB-5 Reform and Integrity Act of 2022 (RIA), EB-5 investors with legal presence in the US may file a Form I-485 Application for Adjustment of Status either at the same time as filing the initial EB-5 petition (Form I-526E) or any time thereafter.
You may also file for a work permit (Form I-765, Application for Employment Authorization) and get your Employment Authorization Document (EAD) in as little as 3 months to 6 months. Likewise, you may also file your application to travel (Form I-131, Advance Parole) while your I-526E is being processed.
To be eligible for concurrent filing, the petitioner and their dependent family members must reside in the United States with a legal visa that allows for Adjustment of Status (AOS). While most non-immigrant visa holders can apply for AOS, come exceptions include visitors on a visa waiver and those from countries facing visa retrogression.
Applicants holding “dual intent” visas like H1-B or L-1 may file the Form I-485 at the same time as their I-526E petition. However, those on visas without immigrant intent should first consult their immigration attorneys to learn if they’re eligible to submit a Form I-485.
Once the applicant receives approval for their I-526E Form., the form I-485 will be reviewed and approved in 6-12 months. The applicant then receives the Conditional Cards, valid for two years.
Step 2B, Consular Processing: When an EB-5 investor who is outside the U.S. or is unable to adjust status in the U.S. receives their I-526E Petition approval, they then need to undertake consular processing to receive their immigrant visa. After the I-526 approval, the National Visa Center (NVC) sends a fee invoice (currently $445 USD). The investor must then provide civil documentation for themselves and immediate family members and complete Form DS-260. Once the fees are paid and documents submitted, the NVC schedules a U.S. Consulate interview, dependent on visa availability based on the investor’s (or their spouse’s) nationality.
The Consulate’s role in this process is to evaluate the investor’s admissibility to the U.S., reviewing criminal history, past visa records, health status, etc. The consular interview doesn’t re-evaluate the I-526E petition, but the officer may ask about the EB-5 investment and project specifics. It’s crucial for the investor to be well-prepared for the interview, often with assistance from an immigration attorney.
This consular processing generally takes between 3 to 12 months, depending on the specific consulate. After receiving the immigrant visa, the investor must enter the U.S. within six months to begin their two-year conditional residency period. Once they enter the U.S., they will receive their Conditional Cards.
Step 3, USCIS Form I-829 – Petition by Investor to Remove Conditions. Within the last 90 days of the 2-year Conditional Residency period, investors must file an I-829 Petition with the USCIS to have conditions removed from their Green Card and establish permanent residency. With this petition, the investor must demonstrate that the investment was sustained throughout the two-year conditional period and that job creation requirements were achieved by the project. During this process, the investor is aided by their chosen Regional Center in providing the requested documentation. Upon approval of the I-829 application, full permanent resident status is given to the investor, his or her spouse, and any unmarried children under the age of 21 included in their I-526E petition.
If my I-526E petition is approved by the USCIS, what is the purpose of the Consulate application and interview, and how soon do I get my Green Card?
If you are outside the U.S. when you receive approval of your I-526E Petition, you must wait for notification from the U.S. Consulate in your home country to prepare documents for the Visa interview. The purpose of this procedure is to ensure that the investor and his or her family undergo medical, police, security and immigration history checks before the EB-5 immigrant investor visas are issued. At the interview, the consulate officer may address these issues as well as information printed on the I-526E petition, including asking the investor to summarize the nature of his or her immigration investment.
After petition approval, can members of the family interview in different countries?
Family members can interview in different countries. The country of origin or where the family has current ties is the standard interview location. Often, one member of the family is located in another country such as a student attending school in the U.S. The student does not have to return to the country of origin and can adjust status in the United States at the district office of the USCIS if the EB-5 Visa of the EB-5 investor has already been approved.
What is an “escrow” account and when does the investor transfer the money into this account?
An Escrow Bank Account is a legal holding account established in a reputable bank. This type of account is commonly used in the sale of real estate, businesses, and personal property. In order to comply with the requirements of the EB-5 program, an investor must transfer the $800,000 USD or $1,050,000 USD capital investment to the project Escrow Account before filing their I-526E Petition for an EB-5 visa. Part of the application process requires the investor to prove that the investment amount has been invested in the United States. Typically, proof of invested capital consists of Wire Transfer receipts and Confirmation of Funds letters issued by the bank or the Regional Center. It’s worth noting that reputable projects will not release your funds from the Escrow Account until the USCIS issues a formal receipt notice of your petition.
How does the bank escrow account protect me against the risk of losing my money?
The initial cash deposit from the investor is placed in an Escrow Bank Account. When an Escrow Bank Account is established, the funds continue to belong to the investor. The Regional Center and bank has an agreement with the investor that allows the funds to be released from the account only after a third-party fund administrator certifies that the funds will be released to solely fund EB-5 project expenditures and at the time the investor’s I-526E petition has been filed with the USCIS.
What is Concurrent Filing for I-485 Adjustment of Status and how does it benefit EB-5 Investors?
Concurrent filing allows certain EB-5 investors with a legal presence in the U.S. to get a Green Card without having to leave the U.S. It also allows them to enjoy the work and travel benefits of their EB-5 Visa before it is issued.
This new provision allows EB-5 investors on with legal presence in the U.S. to concurrently file Form I-526E (Regional Center Immigrant Investor Petition) with Form I-485 (Application for Permanent Residence or Adjustment of Status). They can also file Form I-765 (Application for Employment Authorization) and Form I-131 (Application for Travel Document).
Concurrent filing enables these investors to apply for adjustment of status along with their EB-5 petitions, rather than waiting for I-526E petition approval. This concurrent filing is a significant development for foreign nationals seeking to change from non-immigrant visas to permanent residency without leaving the U.S.
Additionally, the EB-5 concurrent filing process is generally more efficient than the consular visa process abroad, which can face lengthy delays.
Who is eligible for Concurrent Filing?
EB-5 investors holding “dual intent” visas, which accommodate both immigrant and non-immigrant purposes (such as H-1B or L-1 visas), are permitted to file Form I-485 concurrently with their I-526 petition.
Individuals who entered the U.S. under the Visa Waiver Program (ESTA), crew members (C-1/D visas), and J-1 visa holders.
EB-5 investors from countries experiencing visa retrogression, such as China and India, are not able to benefit from the concurrent filing option in the EB-5 program, unless they make an investment in an EB-5 category that is listed as “Current” in the Visa Bulletin.
Please consult with your immigration attorney to find out if you qualify for a concurrent filing of the adjustment of status.
When can I apply for US citizenship?
An EB-5 investor can apply for U.S. citizenship after being a Lawful Permanent Resident (LPR) for at least five years, with the 2-year Conditional Permanent Residency (CPR) period counting towards this requirement. In other words, five years since receiving your Conditional Green Card.
To be eligible for naturalization, the investor must be at least 18 years old, have continuous residence and physical presence in the U.S., and be able to read, write, and speak basic English. They must also demonstrate good moral character, knowledge of U.S. history and government, adherence to the principles of the U.S. Constitution, and willingness to take the Oath of Allegiance.
EB-5 investors should generally avoid staying outside the U.S. for more than 180 days in any year without prior legal consultation. Meeting these naturalization requirements can vary based on individual circumstances, so it’s advisable for EB-5 investors to seek legal advice from an immigration lawyer.
Projects
Do investors need to be actively involved in the day-to-day activities of Regional Center Projects?
In short, no. According to USCIS regulations, investors acting as limited partners in a limited partnership that conforms to the Uniform Limited Partnership Act are deemed to be sufficiently engaged in the EB-5 project. This means that as a limited partner, investors are not required to actively participate in the management or operation of the new commercial enterprise (NCE) in order to qualify for a Permanent Green Card through the EB-5 Immigrant Investor Regional Centers Program.
What are the advantages of investing in a rural project in a Micropolitan Area?
Investing in micropolitan areas near Major Statistical Areas (MSAs) with over 1.5 million residents offers significant advantages. These rural areas, ideally within a 1.5-hour drive of an MSA, benefit from a larger market , as they can attract customers from both the rural and urban areas. This dual market enhances the potential for success of projects in these regions.
Likewise, the trend of urban migration, especially post-pandemic, sees people moving from crowded cities to suburbs and rural areas. This shift, coupled with economies of scale from proximity to MSAs (resulting in lower material and logistics costs), makes these rural areas attractive for investment, potentially offering higher profit margins and less risk due to lower construction and operational costs.
Additionally, since these projects qualify as rural projects, they receive priority processing. We are already seeing I-526E Petition approvals in as little as 3 to 6 months.
May I invest less capital in a Targeted Employment Area (TEA) Project?
Regional Center projects are often located in (Targeted Employment Areas, TEAs), which are either rural areas or areas with high unemployment (150% vs national average). Investing in a TEA reduces the minimum investment amount required for an EB-5 visa to $800,000 USD. For projects not located in a TEA, the minimum investment is $1,050,000 USD.
Do I have to live where the project is?
No, EB-5 investors in Regional Center projects are not required to live in the area of their investment, allowing them flexibility in choosing where in the United States they wish to reside.
Can I make money with my EB-5 Investment?
While the primary goal of the EB-5 program is to secure a visa, some Regional Center projects offer the potential for an attractive return on investment, although this is not guaranteed and depends greatly on the structure of a project and how the funds of the EB-5 Investment Partnership are deployed to the project.
In EB-5 terms, the EB-5 Investment Partnership or Company is known as the New Commercial Enterprise (NCE) and the Project is known as the Job Creating Entity (JCE). In the 3rd Party Regional Center model, the Regional Center is not the owner of the project and profits greatly from fundraising. These 3rd Party Regional Centers lend the NCE funds to the JCE at about 9% per year. They typically pay the EB-5 Investor less than 1%. This model can add significant risk to the EB-5 investors not seeing a full repayment of their investments due to high sunk financing costs.
However, in a Vertically Regional Center and Developer, the EB-5 funds enter into the project as preferred equity or genuine low-cost debt that are distributed when the project is successful.
How is the EB-5 loan model different than the equity model?
The two most common models for EB-5 investments are that of debt or preferred equity.
In the debt model, EB-5 investors make an equity investment in the project’s NCE (New Commercial Enterprise) which then loans the pooled EB-5 capital to the project’s JCE (Job Creating Enterprise). Debt models typically have finite terms with extension options, promissory notes, and a more senior repayment priority when compared to equity. It’s worth noting that 3rd Party Regional Centers profit from fundraising through the debt model, as they typically pay the EB-5 investors less than 1% and loans the EB-5 capital to a developer at 8-12%. This model can increase the risk that the EB-5 investors won’t be repaid their full investment due to the high sunk financing cost that the Regional Center added to the project and received before EB-5 investors are repaid.
In the preferred equity model, EB-5 investors make an equity investment in the project’s NCE which is usually the same entity as the JCE, therefore, the investors are equity owners in the project. Preferred Equity typically does not have a finite term, comes with a more senior repayment priority when compared to common equity, and receives payouts when the project is profitable or can sustain such distributions. This model can significantly reduce the risk that EB-5 investors won’t be repaid their full capital as it doesn’t burden the project’s cashflows with high sunk costs but rather gives the project more flexibility to be successful.
Requirements
What is the minimum required amount of capital to be invested in order to apply for an EB-5 visa?
The minimum investment amount is contingent upon the project’s location. The EB-5 Reform and Integrity Act (RIA) updated the minimum investment to $1,050,000 USD and a reduced amount of $800,000 USD for projects in areas where job-creation is most needed, known as Targeted Employment Areas (TEA).
In the context of EB-5 investments, a Targeted Employment Area (TEA) can be either a rural or urban area. A rural area is one that is not within a Metropolitan Statistical Area (MSA) or a town of over 20,000 inhabitants, while an urban area’s census tract must have an unemployment rate exceeding 150% of the national average to qualify as a TEA.
A great benefit of a project in a Rural TEA is that the I-526E Immigrant Petitions are granted priority processing by the EB-5 Reform and Integrity Act (RIA). We are starting to see I-526E approvals of rural project investors in as little as 4 months .
Must I have previous business experience or education?
The investor is not required to have any prior business experience. Likewise, the investor is not required to demonstrate any minimum level of education. The only requirements for the investor are that he or she has the required investment amount from lawfully obtained capital and is able to provide the necessary financial background documentation to the USCIS.
Must I speak English?
No, the USCIS does not require you to speak English in order to be eligible for the EB-5 program. However, the EB-5 application (Form I-526E) is in English and must be signed by the investor, and all supporting documents must be in English. Any non-English documents need to be accompanied by a certified translation.
Do I have to live where the project is?
Under USCIS regulations, the investor must demonstrate or provide proof that the assets were gained in a lawful manner. This requires the investor to prove the investment funds were obtained through a lawful business, salary, investments, property sales, inheritance, gift, loan, or other lawful means.
If I want to move to the United States and invest in an EB-5 project with Houston EB5 Regional Center, do I have to live in Texas?
No. The EB-5 visa program allows investors to maintain their Permanent Residency by living anywhere of their choosing within the United States.
Can an EB-5 investor from a retrogressed country apply for Concurrent Filing?
How many direct and indirect jobs do I need?
Can I travel outside the US for extended periods after I get my green card?
U.S. immigration law generally expects that Green Card holders will live in the United States permanently. EB-5 investors that are Conditional Permanent Residents (CPRs) or Lawful Permanent Residents (LPRs) can travel abroad freely, but extended absences may jeopardize their status. Brief travels typically don’t affect CPR or LPR status, but staying outside the U.S. for over a year might lead to the assumption that the U.S. is not the person’s permanent home, risking the loss of their permanent resident status. Factors such as maintaining U.S. family ties, employment, filing taxes as a resident, holding a U.S. mailing address, bank accounts, driver’s license, owning property, or running a business in the U.S. are all considered in determining the intent to reside permanently in the U.S.
A good rule of thumb is to try to stay in the U.S. for at least half of each year. Extended absences, particularly those over six months, may also disrupt the continuous residency requirement for naturalization.
For absences longer than a year, LPRs should obtain a reentry permit using Form I-131, which helps demonstrate the intent to live permanently in the U.S. upon return but doesn’t guarantee entry.
For this concernand all other immigration questions, Houston EB5 encourages you to talk to your immigration attorney.
Source of Funds
Can money be gifted by a parent or another relative for an EB-5 investment?
Yes; note, any applicable gift taxes should be paid. It must also be demonstrated that the gift is an actual “arms-length” transaction and is not a mere ruse or that the gifted funds will be given back after permanent resident status is granted.
What issue typically causes the most problems when applying for an EB-5 visa?
The most common problem area for investors has been insufficient documentation of the source and path of funds. Many people try to disclose the least possible information only to have the file returned with a request for further information. It is better to provide too much information rather than too little . In this era of terror alerts and suspicions about money laundering, USCIS adjudicators require a well-documented source and path of funds.
Regional Center
What is a Regional Center and what advantages do they offer to EB-5 investors?
A Regional Center is a designated entity under the EB-5 Immigrant Investor Program that facilitates investments in large-scale projects that drive regional economic growth and job creation.
A major advantage of Regional Center projects under the EB-5 visa program is that Regional Centers are allowed to use USCIS-approved economic models, like RIMS II, to estimate job creation from both construction activities and project revenues, counting not only direct jobs but also indirect and induced jobs. This typically results in more abundant and predictable job creation outcomes.
In Direct Standalone EB-5 projects, job creation is limited to the number of employees on the payroll, verified by W-2 forms, and failing to maintain a minimum of 10 full-time employees for the two years of their Conditional Residency can lead to the denial of the I-829 Petition for Permanent Residency.
Investors in Regional Center projects typically have a more passive role compared to direct investments. This is advantageous for those who prefer not to be involved in the day-to-day management of a business.
Being a limited partner in a partnership that follows the Uniform Limited Partnership Act counts as sufficient involvement in an EB-5 project. Hence, these investors do not have to be involved in the day-to-day management of the enterprise to be eligible for a Permanent Green Card under the EB-5 Immigrant Investor Regional Centers Program.
Most Regional Center projects are managed by professionals with experience in raising EB-5 capital and lending it to large-scale EB-5 projects. Also, a few Regional Centers are vertically integrated Regional Centers and Developers, with successful and extensive experience not only in EB-5 but also in real estate development.
Who should invest in an EB-5 Regional Center project?
The advantage of the EB-5 Immigrant Investor Regional Centers Program is that there is no additional requirements besides investing the minimum amount, creation of 10 jobs, sustaining the investment for the appropriate period, and a legal source and path of funds. Foreign investors who participate in the EB-5 program include people from a wide variety of countries, cultures, and personal or professional backgrounds.
What are Indirect and Induced Jobs?
One of the key benefits of a Regional Center project is its ability to count direct, induced, and indirect job creation needed for the EB-5 visa’s requirements. This is beneficial for investors as it eases the burden of meeting the job creation criterion compared to direct investments as the indirect and induced jobs created typically provides a large job creation cushion..
In a Standalone Direct EB-5 Investment, you can only count the employees in your payroll (evidenced by W-2 Forms, Wage and Tax Statements). If you cannot maintain at least 10 full-time employees until the end of your 2-year Conditional Residency, your I-829 Petition for Permanent Residency will be denied. The USCIS adjudicator may give you a discretionary third year, but this is not guaranteed.
However, a Regional Center can use USCIS-approved economic models to estimate the economic impact and job creation from capital spent in construction activities and project revenues. This is provided for EB-5 capital and also all other sources of capital for the project.
Regional Center job creation includes direct jobs (construction workers), indirect jobs (workers in the supply chain of all materials and services) and induced jobs (these are created as the direct and indirect workers spend their wages). USCIS considers all these model-derived jobs full time and permanent. Therefore, job creation becomes more abundant and more predictable.
Why is Job Creation safer with a Regional Center Project?
Regional Centers pool investments from multiple EB-5 investors, which can lead to larger-scale and more impactful projects. Another advantage is that all other sources of capital for the project are counted for job creation in addition to the EB-5 capital. This significantly boosts the job creation of a Regional Center Project and usually gives EB-5 investors a comfortable job creation cushion over the required 10 jobs.
Also, investing in a Regional Center project offers the significant benefit of being able to count induced, direct, and indirect job creation towards fulfilling the program’s job creation requirements. This approach is generally more flexible for investors compared to direct standalone EB-5 investments, where job creation is limited to direct payroll employees, evidenced by W-2 forms. In direct investments, failure to maintain at least 10 full-time employees for the two-year Conditional Residency period could jeopardize the approval of the I-829 Petition for Permanent Residency.
Likewise, Regional Centers can use USCIS-approved economic models, like RIMS II, to calculate job creation based on the economic impact of the capital spent in construction and from project revenues. This calculation encompasses direct jobs (such as construction workers), indirect jobs (workers in the supply chain for materials and services), and induced jobs (generated by the spending of wages by direct and indirect workers). Therefore, job creation in Regional Center projects tends to be more extensive and predictable, offering a distinct advantage over direct investment scenarios.
Do I get faster Processing of my I-526E Immigrant Petition if I invest in a Regional Center project?
In general, yes, you should get faster I-526E processing as you will be investing in a project that has already been submitted to the USCIS. Also, if the Regional Center project is a Rural Project your I-526E will be given priority processing.
The success of your Immigrant Investor Petition depends on the lawful source of your funds and the quality of the project. An approvable project may require several hundred pages of support documents that the Regional Center would have already sent to the USCIS.
The EB-5 Reform and Integrity Act (RIA) requires that a Regional Center submits a Form I-956F to USCIS before an investor can submit their I-526E Petition. This form detailed information about the EB-5 Investment Partnership (New Commercial Enterprise, NCE) and the Project (Job Creation Entity, JCE). Approval of the I-956F is not a prerequisite for you to file your I-526E Petition. However, it cuts processing time of your I-526E Petition, as the project will either be under review or already approved.
With a Regional Center project, the USCIS adjudicator will focus solely on your biographical and source of funds documents. Since USCIS gives all the I-526E Petitions of one project to the same adjudicator, we are starting to see that the I-526E Petitions are approved rather quickly after an I-956F project application is approved.
Also, if your project qualifies as a Rural Project, it will be given priority processing. We are starting to see I-956F Rural Project Applications approved in 4 to 6 months and individual I-526E Petitions a few months after that.
However, you will have to file another Form (I-526, Immigrant Petition by Standalone Investor) with a very detailed business plan and several hundred pages of support documents if you are doing your direct investment. This form will go to another queue of adjudicators that will have to process the Standalone Project I-526 Petitions ahead of yours.
By going with a Regional Center, you may save several months or even years in the processing time of your Immigrant Investor Petition.
What makes Houston EB5 unique?
Houston EB5 is a vertically integrated regional center and developer, so we choose to profit off the underlying real-estate project on the back end as opposed to profiting off EB-5 fundraising. However, in order for us to have financial success, we must fully pay dividends owned to EB-5 investors before we can receive our full share of profits. Further, we can only exit the project after the EB-5 investments have safely been repaid to our investors. Due to our structure, we’ve proudly maintained a 100% project approval rate on I-526 and I-829 petitions as well as 100% capital repayment rates. This is accomplishment that only the gold-standard of regional centers can say.
At Houston EB5, we pride ourselves on being a company for immigrants that is run by immigrants. We understand the challenges that come with immigration and do our best to make your process easy to understand and navigate. This is why Houston EB5 decided to be different at our inception. Although we are very strong on projects, we are very boutique when it comes to a highly personalized and transparent service.
Denial
Can I apply if I have been rejected or terminated in the past by USCIS for a L-1, E-2, B, or other visa?
Rejection in the past does not disqualify the applicant unless the reasons are related to immigration fraud or other major problems. It is most important that all criminal, medical, or U.S. immigration issues be disclosed to the limited partnership and legal counsel in advance of submitting your application.
EB-5 Form & Petition
What is an I-526E Petition and how is it different from an I-526 Petition?
Before the EB-5 Reform and Integrity Act of 2022 (RIA) every EB-5 Investor had to file an I-526 Petition whether they were a direct project investor (“Standalone Investor”) or an investor of a Regional Center project. Essential elements of the I-526 Petition are source of funds support documents and a very detailed description of the project. An approvable project usually had several hundred pages of support documents that was to be submitted for every Regional Center project investor. This caused a lot of duplication and overloaded the adjudication process.
Post-RIA only Direct Project EB-5 Investors must file a Form I-526, “Immigrant Petition by Standalone Investor”, with all project support documents.
However, Regional Center EB-5 Investors now file a different form, I-526E, “Immigrant Petition by Regional Center Investor”. Since project documents are previously filed by the Regional Center with an I-956F form, the USCIS adjudicator will focus solely on your biographical and origin of funds documents. Since USCIS gives all the I-526E Petitions of one project to the same adjudicator, we are starting to see that after an I-956F project application is approved, the I-526E Petitions are approved rather quickly.
Also, if your project qualifies as a Rural Project, it will be given priority processing. We are starting to see I-956F Rural Project Applications approved in 4 to 6 months and individual I-526E Petitions a few months after.
What are the contents of an I-526E Petition?
Form I-526E, known as the “Immigrant Petition by Regional Center Investor,” is the first step in your EB-5 immigration process. This form was introduced as part of the changes in the EB-5 program following the EB-5 Reform and Integrity Act of 2022 (RIA).
The I-526E petition serves three fundamental purposes in the EB-5 Immigrant Investor Program: verifying that a qualifying investment has been made in a New Commercial Enterprise (NCE), establishing that the investment was sourced from lawful means, and demonstrating the NCE’s credible business plan and job creation potential. The preparation of this form usually requires an immigration attorney’s expertise.
To evidence the investment in an NCE, investors may provide various documents such as bank statements, loan certificates, and escrow account records. If the investment qualifies for a reduced amount due to being in a Targeted Employment Area (TEA), appropriate documentation for TEA designation must be included.
The lawful source of funds is a critical part of the petition, requiring comprehensive documentation to trace the origin of the capital. This may include salary payments, real estate sales, loan documents, or proof of gifted capital. The assistance of an immigration attorney is crucial to meet the high standards of USCIS for source-of-funds documentation.
The petition must also illustrate the potential for job creation, with a requirement to create at least 10 qualifying jobs within two years of the investor’s conditional residency.
The NCE’s business plan should detail the operational plan, financial projections, and management background. Direct investments necessitate the creation of full-time, W-2 positions, while regional center-sponsored NCEs can include indirect and induced jobs, though these can’t exceed 90% of total job creation.
The investor’s managerial role and the regional center’s information, including the I-956F form receipt number and administrative costs, are also integral to the petition. Additionally, investors need to provide personal background information, such as employment history and compliance with U.S. laws.
The filing fee for the I-526E petition, as of August 2022, is $3,675, and the decision from USCIS may result in approval, denial, or a request for additional evidence.
What is an I-829 Petition?
The I-829 Petition, officially known as the “Petition by Investor to Remove Conditions on Permanent Resident Status”, is the final step for an EB-5 investor to become a Legal Permanent Resident (LPR) of the United States without any conditions.
Key aspects of the I-829 Petition include:
- Purpose: The I-829 Petition is filed by EB-5 investors to remove the conditional status of their residency. Initially, EB-5 investors and their eligible family members are granted Conditional Permanent Residency (CPR) for two years. The I-829 is used to convert this conditional status to permanent residency.
- Timing: Their I-829 Petition must be filed during the 90-day period immediately preceding the second anniversary of the investor’s admission to the United States as a conditional permanent resident. This timing is critical as it aligns with the expiration of the conditional residency period. Failure to submit the I-829 Petition during that 90-day period will disqualify the EB-5 investor and their family from getting Permanent Residency status.
- Requirements: The petition requires the investor to demonstrate that they have fulfilled all the requirements of the EB-5 program. This includes proving that the investment has been maintained during the “Sustainment Period” and that the required jobs were created or will be created within a reasonable period.
- Evidence of Job Creation: The investor needs to provide evidence that their investment led to the creation of at least 10 full-time jobs for qualifying U.S. workers. This is a key requirement for the success of the I-829 petition.
- Sustained Investment: On October 11, 2023, USCIS issued awaited guidance regarding the EB-5 investment timeframe under the EB-5 Reform and Integrity Act of 2022 (RIA), to satisfy the ‘at risk’ requirement for the EB-5 visa. The guidance differentiates between investors who joined the program before (pre-RIA) and after (post-RIA) the enactment of the RIA. For pre-RIA investors, the sustainment period is defined as the two years of their Conditional Residence. For post-RIA investors, it’s stated as “two years from investing.” However, there’s ambiguity surrounding when this two-year period begins, which calls for additional clarification. Also, their interpretation is non-binding, is not yet in the USCIS Policy Manual and is likely to be challenged in courts.
- Result of Approval: Once the I-829 Petition is approved, the investor and their dependents are granted full permanent resident status in the United States.
Filing and approval of the I-829 Petition is a critical step in the EB-5 process, which marks the successful completion of the investment and immigration requirements set by the United States Citizenship and Immigration Services (USCIS).
What is a Form I-956F?
Form I-956F submits to the USCIS comprehensive information about both the New Commercial Enterprise (NCE) and the Job-Creating Entity (JCE) associated with a project. This includes their names, ownership, organizational structures, and contact details. The form also asks for the project’s location, its status as a Targeted Employment Area (TEA), and the basis for this designation, along with the anticipated amount of EB-5 investment to be raised and the industries impacted.
A key component is the mandatory Form I-956H, which must be filled out by all individuals with significant authority in both the NCE and JCE. This includes a wide range of roles, such as owners, principals, and other decision-makers. These individuals must provide detailed information regarding their role in managing EB-5 capital.
Furthermore, the regional center must make certain certifications in Part 6 of Form I-956F. This involves affirming that all material risks have been disclosed to investors and disclosing any bankruptcy or litigation issues, as well as potential conflicts of interest concerning the project.
The regional center is also required to confirm that it has established policies and procedures to oversee the issuance of securities. Evidence of these policies and procedures should have already been submitted with Form I-956 for obtaining a USCIS designation.
Lastly, Form I-956F mandates the submission of all offering documents related to the project. These documents encompass a range of materials like the offering memorandum, various agreements, business plan, economic impact study, and TEA validation report. A best practice suggestion is to include a complete template of Form I-526E to be filed by their investors. This I-526E Petition is known as an “Exemplar.”
What is a Form I-956?
Form I-956, titled “Application for Approval of an EB-5 Investor Regional Center,” is used by an organization seeking to be designated as an EB-5 Regional Center.
A Regional Center is an entity, organization, or agency that has been approved by the United States Citizenship and Immigration Services (USCIS) to promote economic growth, improve regional productivity, create jobs, and increase domestic capital investment in targeted areas.
With Form I-956 the new Regional Center provides detailed information about:
- Its proposed economic activities,
- The geographical area it intends to serve,
- Its business plan and how it plans to focus on job creation and capital investment,
- Its organizational structure and the principals involved in the center,
- Compliance measures to adhere to the laws and regulations governing the EB-5 program.
What is an I-485 Petition?
Form I-485, officially titled “Application to Register Permanent Residence or Adjust Status”, is used by EB-5 investors to convert their legal status to that of a green card upon approval, if they are already in the U.S. The I-485 can also help EB-5 applicants whowish to remain in the U.S. while their I-526 or I-526E Petition is processed. Here are some key aspects of Form I-485:
- Purpose: The primary function of Form I-485 is to allow individuals currently in the United States to apply for lawful permanent residency without having to return to their home country to complete visa processing.
- Eligibility: To file an I-485 Form, an individual must be eligible for a green card through various means such as family sponsorship, employment, refugee or asylee status, or other special programs like the EB-5 investor program.
- Requirements: Applicants must provide evidence of their eligibility for permanent residency. In the case of an EB-5 Investor, it will be their I-526 Standalone Investor Petition or I-526E Regional Center Investor Petition.
- Adjustment of Status: Filing this form is referred to as “adjusting status,” which is different from obtaining a green card through consular processing (done outside the U.S.). Only individuals who are physically present in the U.S. on an eligible visa can file Form I-485.
- Concurrent Filing: Concurrent filing, especially beneficial for EB-5 investors, refers to filing Form I-485 simultaneously with the I-526E Petition under the EB-5 Reform and Integrity Act of 2022. This allows investors legally present in the U.S. to apply for adjustment of status alongside their EB-5 petitions, along with applying for work authorization (Form I-765) and a travel permit (Form I-131). This process can significantly expedite receiving employment authorization and travel permits, sometimes in as little as three months. Concurrent filing is particularly advantageous for visa holders on visas like H-1B, E-2, and F-1, enabling them to begin enjoying the benefits of permanent residency sooner at the same time as legally staying in the U.S. while their I-526 petition is processed. This option is more efficient than consular processing abroad and is crucial for those with expiring visas. However, it’s important to note that while holders of “dual intent” visas like H-1B or L-1 can file Form I-485 concurrently with their I-526 petition, those on “non-immigrant intent” visas should be cautious and consult with their immigration attorney before filing Form I-485.
- Processing Time and Interview: The processing time for Form I-485 can vary based on the individual case and the office handling it. The I-485 will not be processed until the EB-5 green card petition is approved.
- Result of Approval: Once approved, the applicant is granted lawful permanent resident status and will receive their green card, allowing them to live and work permanently in the United States.
Form I-485 is a vital step for EB-5 investors that would like to remain in the U.S. while their I-526 or I-526E Petition is processed.