EB-5 Immigrant Investor Program

The US Congress created this Fifth Preference category to stimulate the US economy by creating jobs and by allowing foreign investors to bring capital into the US. Under the Immigrant Investor Program, every year, visas are set aside for foreign nationals who invest in new commercial enterprises.  The new commercial enterprises must be associated with regional centers approved by the USCIS. Regional centers are areas identified by the USCIS as needing economic development through business.

 

What are the eligibility requirements to enter the Immigrant Investor Program?

All EB-5 investors must invest in a new commercial enterprise.  A commercial enterprise includes sole proprietorships, limited or general partnerships, holding companies, joint venture companies, corporations, business trusts or other entities which may be publicly or privately owned.

EB-5 investors must invest sufficient capital to create full-time positions for at least 10 qualified employees. When the EB-5 investor invests in a business that is not located in a regional center, the jobs must be direct, such as when an employer-employee relationship is created. When the EB-5 investor invests in a business located in a regional center, the jobs created may be direct or indirect as when the enterprise hires job contractors or independent contractors.

If the EB-5 investor has a troubled business, it must show that it can maintain at least ten full-time jobs for at least two years. A business is trouble if it has incurred a net loss of at least 20% for 12 or 24 months before the priority date of their application for immigration.

 

What does “investing in a commercial enterprise” mean?

It means that the investor must place the required amount of capital at risk so that it can generate a return or a profit on the capital. The investor need not prove that the business is a success or that it has gained a full return of their investment, the investor only needs to prove that there is a chance of acquiring gain or profit on the amount invested. Actual business activity must be undertaken using the capital.  The full amount of the capital must be made available to the businesses invested in.

 

What is considered a “capital investment”?

Capital investment means an investment in cash, equipment, inventory or goods or other tangible property or assets.  They do not include assets which were acquired directly or indirectly through unlawful means or through criminal activities.

The EB-5 investor must be able to prove that the capital invested legally belongs to the EB-5 investor. The minimum capital investment must be $1 million. If the new business enterprise will be established in a targeted employment area (an area that is rural or one that has high unemployment), the minimum investment is $550,000.00.

 

What must investors prove about their capital investment?

Investors must prove that they are the legal owners of the capital and they obtained the capital through lawful means. They must also prove that they have a comprehensive business plan for their capital investment.

The business plan must:

  • describe the business, its products and services and its objectives
  • include a market analysis and feasibility studies
  • if materials need to be supplied or products need to be distributed, there must be a marketing strategy
  • include the organizational structure of the business
  • include projections of sales, cost and income.
  • include a description of the staffing requirements of the business, a timetable for hiring, a description of the duties of each position in the enterprise

 

How will the investors prove that they are the legal owners of the capital and the capital was obtained legally?

If the investors have engaged in the business in their home country or country of residence, the investors must present business registration records and income tax returns. They must present evidence of the source of the capital. The investor must also present certified copies of all judgments or evidence of all pending civil, criminal or administrative actions 15 years previous to the application.

The investors must provide evidence of actual business activities – profit and loss statements, audited financial statements, acquisition of inventories, etc. Creating a corporation or business entity and signing a lease for a business office or business premises is not enough. Bank statements showing cash inflow and payments made may be presented. If the capital was obtained through inheritance or donation, the will or order of probate or the deed of donation must be presented.

The investor must also show evidence of wages and salaries received, income from labor or service activities, income from royalties, income form patents, income from interests, dividends and bonuses, rental income, income from transfers of property. The investor may also show evidence of ownership over properties through purchase or sale if the capital was obtained through purchase.

 

How can investors prove that they have indeed invested in a new commercial enterprise?

They must present certificates of deposits from US banks.  The accounts must be in the name of the new business enterprise in the US. They must present evidence of purchased assets for use in the enterprise including invoices, sales receipts and purchase contracts. There must be evidence of property transferred from abroad for the use of the enterprise in the US (bills of lading, transit insurance policies, etc.). There must be evidence of any loans or mortgages acquired by the investor to fund the capital investment. If the investment consists of shares of stock, there must be evidence of the transfer of the shares.

 

Is it sufficient for the investor to merely pour in funds into the enterprise?

No, the investor must be engaged in the management of the commercial enterprise. The investor may formulate policy or manage the day-to-day business activities. The investor cannot take a passive role in his or her investment.

To prove active involvement of the investor in the business or enterprise, there must be a statement of the position or title of the investor.  The investor must be a corporate officer or member of the board of directors. If the investor is engaged in a partnership, the articles of partnership must show the investors rights, powers and duties.

 

Who is considered a “qualified employee” that an EB-5 investor must hire?

When an investor creates a new commercial enterprise, the enterprise must create jobs for at least 10 people. An EB-5 investor must hire US citizens or US lawful permanent residents who are authorized to work in the US.  They can hire conditional residents (such as a person on a fiancé or fiancée visa), temporary residents, an asylees, refugees or persons whose deportation is suspended.

For determining the number of “qualified employees” the spouse and children of the EB-5 investor are not counted even if they work in the business. They cannot hire any foreign national who is in the US under a non-immigrant visa or any person who is not authorized to work in the US.

An employee is a person who provides services or labor for the new commercial enterprise and receives compensation, wages, salaries or other remuneration directly from the commercial enterprise.

 

How can investors prove that jobs have been created by their investment?

The investor must show relevant tax records, Employment Eligibility Verification for at least 10 qualified employees. They must also show copies of the employment contracts to show the names, designations or titles of the employees, their salary rate and duties. They can also present the enterprise’s business plan which gives a description of the positions in the enterprise.

 

What is the application process for an EB-5 investor immigrant visa?

The investor must file an Immigrant Petition by Alien Entrepreneur (Form I-526). Once the petition is approved, the investor must file an application to register permanent resident or adjust status (Form I-485) if the investor is already in the US. If the investor is outside the US, the investor must file an Application for Immigrant Visa and Alien Registration (Form DS-260).

Once these are approved, the investor will be issued a conditional permanent residence for two years. 90 days before the second anniversary of the investor’s admission into the US as a conditional permanent resident, the investor must file a Petition by Entrepreneur to Remove Conditions on Permanent Resident Status. Once this is approved, the investor will obtain lawful permanent resident status.

 

Do you need assistance in proving that you have invested in a new commercial enterprise? Do you need help establishing that you have been involved in the operation of the business enterprise? Consult any of our experienced immigration lawyers at Lluis Law. They are willing to help you.

 

 

EB-5 Immigrant Investor Program

 

The US Congress created this Fifth Preference category to stimulate the US economy by creating jobs and by allowing foreign investors to bring capital into the US. Under the Immigrant Investor Program, every year, visas are set aside for foreign nationals who invest in new commercial enterprises.  The new commercial enterprises must be associated with regional centers approved by the USCIS. Regional centers are areas identified by the USCIS as needing economic development through business.

 

What are the eligibility requirements to enter the Immigrant Investor Program?

All EB-5 investors must invest in a new commercial enterprise.  A commercial enterprise includes sole proprietorships, limited or general partnerships, holding companies, joint venture companies, corporations, business trusts or other entities which may be publicly or privately owned.

EB-5 investors must invest sufficient capital to create full-time positions for at least 10 qualified employees. When the EB-5 investor invests in a business that is not located in a regional center, the jobs must be direct, such as when an employer-employee relationship is created. When the EB-5 investor invests in a business located in a regional center, the jobs created may be direct or indirect as when the enterprise hires job contractors or independent contractors.

If the EB-5 investor has a troubled business, it must show that it can maintain at least ten full-time jobs for at least two years. A business is trouble if it has incurred a net loss of at least 20% for 12 or 24 months before the priority date of their application for immigration.

 

What does “investing in a commercial enterprise” mean?

It means that the investor must place the required amount of capital at risk so that it can generate a return or a profit on the capital. The investor need not prove that the business is a success or that it has gained a full return of their investment, the investor only needs to prove that there is a chance of acquiring gain or profit on the amount invested. Actual business activity must be undertaken using the capital.  The full amount of the capital must be made available to the businesses invested in.

 

What is considered a “capital investment”?

Capital investment means an investment in cash, equipment, inventory or goods or other tangible property or assets.  They do not include assets which were acquired directly or indirectly through unlawful means or through criminal activities.

The EB-5 investor must be able to prove that the capital invested legally belongs to the EB-5 investor. The minimum capital investment must be $1 million. If the new business enterprise will be established in a targeted employment area (an area that is rural or one that has high unemployment), the minimum investment is $550,000.00.

 

What must investors prove about their capital investment?

Investors must prove that they are the legal owners of the capital and they obtained the capital through lawful means. They must also prove that they have a comprehensive business plan for their capital investment.

The business plan must:

  • describe the business, its products and services and its objectives
  • include a market analysis and feasibility studies
  • if materials need to be supplied or products need to be distributed, there must be a marketing strategy
  • include the organizational structure of the business
  • include projections of sales, cost and income.
  • include a description of the staffing requirements of the business, a timetable for hiring, a description of the duties of each position in the enterprise

 

How will the investors prove that they are the legal owners of the capital and the capital was obtained legally?

If the investors have engaged in the business in their home country or country of residence, the investors must present business registration records and income tax returns. They must present evidence of the source of the capital. The investor must also present certified copies of all judgments or evidence of all pending civil, criminal or administrative actions 15 years previous to the application.

The investors must provide evidence of actual business activities – profit and loss statements, audited financial statements, acquisition of inventories, etc. Creating a corporation or business entity and signing a lease for a business office or business premises is not enough. Bank statements showing cash inflow and payments made may be presented. If the capital was obtained through inheritance or donation, the will or order of probate or the deed of donation must be presented.

The investor must also show evidence of wages and salaries received, income from labor or service activities, income from royalties, income form patents, income from interests, dividends and bonuses, rental income, income from transfers of property. The investor may also show evidence of ownership over properties through purchase or sale if the capital was obtained through purchase.

 

How can investors prove that they have indeed invested in a new commercial enterprise?

They must present certificates of deposits from US banks.  The accounts must be in the name of the new business enterprise in the US. They must present evidence of purchased assets for use in the enterprise including invoices, sales receipts and purchase contracts. There must be evidence of property transferred from abroad for the use of the enterprise in the US (bills of lading, transit insurance policies, etc.). There must be evidence of any loans or mortgages acquired by the investor to fund the capital investment. If the investment consists of shares of stock, there must be evidence of the transfer of the shares.

 

Is it sufficient for the investor to merely pour in funds into the enterprise?

No, the investor must be engaged in the management of the commercial enterprise. The investor may formulate policy or manage the day-to-day business activities. The investor cannot take a passive role in his or her investment.

To prove active involvement of the investor in the business or enterprise, there must be a statement of the position or title of the investor.  The investor must be a corporate officer or member of the board of directors. If the investor is engaged in a partnership, the articles of partnership must show the investors rights, powers and duties.

 

Who is considered a “qualified employee” that an EB-5 investor must hire?

When an investor creates a new commercial enterprise, the enterprise must create jobs for at least 10 people. An EB-5 investor must hire US citizens or US lawful permanent residents who are authorized to work in the US.  They can hire conditional residents (such as a person on a fiancé or fiancée visa), temporary residents, an asylees, refugees or persons whose deportation is suspended.

For determining the number of “qualified employees” the spouse and children of the EB-5 investor are not counted even if they work in the business. They cannot hire any foreign national who is in the US under a non-immigrant visa or any person who is not authorized to work in the US.

An employee is a person who provides services or labor for the new commercial enterprise and receives compensation, wages, salaries or other remuneration directly from the commercial enterprise.

 

How can investors prove that jobs have been created by their investment?

The investor must show relevant tax records, Employment Eligibility Verification for at least 10 qualified employees. They must also show copies of the employment contracts to show the names, designations or titles of the employees, their salary rate and duties. They can also present the enterprise’s business plan which gives a description of the positions in the enterprise.

 

What is the application process for an EB-5 investor immigrant visa?

The investor must file an Immigrant Petition by Alien Entrepreneur (Form I-526). Once the petition is approved, the investor must file an application to register permanent resident or adjust status (Form I-485) if the investor is already in the US. If the investor is outside the US, the investor must file an Application for Immigrant Visa and Alien Registration (Form DS-260).

Once these are approved, the investor will be issued a conditional permanent residence for two years. 90 days before the second anniversary of the investor’s admission into the US as a conditional permanent resident, the investor must file a Petition by Entrepreneur to Remove Conditions on Permanent Resident Status. Once this is approved, the investor will obtain lawful permanent resident status.

 

Do you need assistance in proving that you have invested in a new commercial enterprise? Do you need help establishing that you have been involved in the operation of the business enterprise? Consult any of our experienced immigration lawyers at Lluis Law. They are willing to help you.

 

 

 

 

 

 

 

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