Immigrate Through Investment - EB-5 Investors Visa

What is the EB-5 Investors Visa Program?
Congress created the fifth-employment preference (EB-5) immigrant visa category in 1990 with the objective to attract foreign capital to the United States and to create jobs for American workers. Those seeking to immigrate through investment under this category must be willing to engage in a commercial enterprise that will benefit the U.S. economy and create at least 10 full-time jobs. In addition to the return that immigrant investors hope to achieve on their investment, the EB-5 investors visa candidates offers the prospect, but not the guarantee, of lawful permanent residence (green card) in the United States.

What is the minimum investment required for the EB-5 Investors Visa?
The EB-5 investors visa program calls for a minimum investment of $1,000,000 USD. This sum may be reduced to $500,000 USD if the enterprise that receives the investment is situated in a Targeted Employment Area (TEA). TEA’s must meet one of two criteria, the first, concerning population, and the second, concerning the rate of unemployment.

What is the new commercial enterprise requirement?
There are two basic requirements for demonstrating a new commercial enterprise. First, the enterprise must be “new.” That is, formed after November 29, 1990. Although, an enterprise formed before that date may qualify if the investor “restructures” or “expands” an existing business. Second, the enterprise must be a “commercial” enterprise. Generally, any for-profit enterprise formed for the ongoing conduct of lawful business will serve as a commercial enterprise. This includes sole proprietorships, partnerships, joint ventures, corporations, business trusts, and other entities publicly or privately owned. There are situations where even a holding company and its wholly owned subsidiaries may meet the definition, if each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business.

Can the investor’s role be passive?
US immigration laws require the investor to maintain more than a passive role in the new enterprise. The regulations require the investor to be involved in the management of the new commercial enterprise and to be involved in either the day-to-day operations or management of the day-to-day operations through policy formulation. There are some situations where membership in a limited partnership may satisfy the requirement.

What is the job creation requirement?
To qualify as an EB-5 investors visa, each investor must demonstrate that 10 full-time, year-around jobs will be created as a result of the investment. This requirement is not affected by the location of the investment in a targeted employment area (which is relevant only to the minimum sum of the investment). The jobs created must be for U.S. citizens, lawful permanent residents and those lawfully admitted to the United States, such as asylees, refugees, conditional residents and some others. Excluded from the job count are Non-immigrant (temporary) workers and the investor alongside of the investor’s family members.

What constitutes a job?
A full-time job is one that requires at least 35 hours each week to fulfill. While job sharing is permitted under certain circumstances, the EB-5 investors visa program does not permit the combination of part-time jobs in an effort to create a full-time position.
Normally, independent contractors are excluded from the direct job creation count; however, an exception exists for enterprises located within a Regional Center created under a Pilot Program first enacted in 1993.

What does it mean to “invest” capital?
The term “invest” means to contribute capital. A contribution of capital in exchange for a note, bond, convertible debt, or other debt between the entrepreneur and the new commercial enterprise does not constitute a contribution of capital and will not constitute an investment. The regulations define “capital” as cash and cash equivalents, equipment, investor, and other tangible property.

Is permanent resident status immediately acquired?
No. Immigrant investors, their spouses and dependent children are subject to a two-year period known as “conditional” permanent resident status. Only after the two year period has expired will the investor be eligible to file a petition to remove the conditional status and then obtain a greencard.

Contact Ben Hedenberg for more information.

Page last updated Saturday, October 16, 2010


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