EB-5 Investment Immigration

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What is EB-5?

EB-5 is the fifth preference of the US Citizenship and Immigration Services (USCIS) in granting permanent residency / green card to foreign investors. Under the EB-5 program, entrepreneurs or investors are eligible to apply for permanent residency provided that they are willing to invest at least $500,000 to $1,000,000. Typically, if the investment will be in an area where there is high unemployment rate, or considered as Targeted Employment Area and defined as certain rural – an entrepreneur may invest at least $500,000. Currently, American cities that have the highest unemployment rate include Alaska, District of Columbia, West Virginia, New Mexico, Nevada, Washington, Mississippi, Connecticut, Florida and Texas. On the other hand, if an entrepreneur opts to invest in an urban area of United States such as New York and Los Angeles, he/she must invest at least a million US dollars. This money shall be invested in a US Business that will create and preserve at least 10 full time jobs for US citizens or employment-authorized immigrants in the United States.

History and Purpose of the EB-5 Program

EB-5 / Employment-Based Fifth Preference Immigrant Investor Program was created by the US Congress way back 1990 for the purpose of stimulating the country’s economy by means of creating jobs, and leveraging from capital investment by foreign investors. To promote this program, the USCIS grants permanent residency to alien investors along with their spouses and unmarried children in exchange for making the certain level of capital investment that creates and preserves full time jobs for at least 10 US citizens within two years

EB-5 Direct Investment or Regional Center Investment

There are two ways you can invest in order to obtain a green card – one is through Direct Investment or through Regional Center Investment. Both meets the same required amount of investment associated with job creation and preservation.

What is a EB-5 Direct Investment?

An EB-5 Direct investment simply means investing your money to an established or newly created US business. An EB-5 investor may only invest in an enterprise that meets the following criteria:

  1. the business is established after November 29, 1990 or;
  2. the business is established on or before November 29, 1990 that is purchased, restructured and reorganized resulting into a new commercial enterprise or in a business that has been expanded and has increased its net worth by 40% through the investment.

The commercial enterprise must be a for-profit activity formed as Sole Proprietorship, partnership, holding company, joint venture, corporation, business trust or other entity which may be publicly or privately owned.

Unlike in some countries like Colombia, Brazil and Greece, you can invest your money in noncommercial activity such as purchasing a real estate in order to obtain citizenship – in the United States, you must only invest your money in a business that generates income and employment.

What is a Regional Center Investment?

A Regional Center Investment means combining capital from different investors in order to establish a new project. Basically, the purpose of Regional Center Investment is to open an investment pool where foreign investments and US domestic funds are combined in order to develop industrial projects such as hospitals, hotels, township projects, commercial centers and residential subdivisions.

Most investors perceive that investing into a Regional Center minimizes and eliminates risks – but unfortunately, it also comes with risks and documented cases of fraud. Currently there are over 903 approved regional centers in the US as of June 2018. Clearly, selecting which regional center is best may be a little confusing. Conducting due diligence and research, as well as seeking a professional advice is highly recommended.

There are many factors to consider in choosing which Regional Center, some are:

  1. What are the regional center’s current and previous projects?
  2. How compliant is the Regional Center with the U.S. Securities and Exchange Commission and The Financial Industry Regulatory Authority (FINRA)?
  3. How long has this Regional Center been working with USCIS? How many EB-5 projects were established and what are their status now?
  4. What does the Regional Center’s project and when is it supposed to be completed?
  5. How many investors are involved in a project? What would be the investor’s place in the project besides funding it?
  6. Does the Regional Center have any record of business failure?

Note that investing a regional center does not automatically qualifies you to be eligible for a green card – apparently, your permanent residency relies on the success of the regional center investment. It must also generate income to create and preserve jobs for its citizens. Clearly, this type of investment comes with risks as well. Not carefully selecting which regional center to invest to may cause your money go down the drain, as well as your dream to be a permanent resident of the United States.

Which is best – Direct Investment or Regional Center Investment?

Direct Investment is better than the Regional Center – basically because you can have total control and involvement to an enterprise where you invested your money. This type of investment requires the investor to exert more time and effort, as well as devotion in running and managing the business. If the business is managed and run properly, it could mean substantial financial reward for the investor, and be able to create a legacy for his/her family. Moreover, with direct investment, you can choose any sort of industry you are interested and familiar with – unlike with Regional Center investment – your money only goes to specific industries you may not even be interested with.

EB-5 Eligibility

Who is eligible to US Citizenship by Investment Program?

  1. An investor must have a lawfully obtained financial resources to be able to invest up to $1,000,000 to a US business
  2. Must be admissible into US – this means you are physically healthy, no criminal records and law abiding citizen.
  3. With good moral character
  4. Able to read, write and speak English well

Requirements

  1. Extensive evidences of proof of income and source of capital such as bank statements, tax returns and fund transfer records
  2. Evidence to prove that you have invested or in the process of investing in a new commercial enterprise such as detailed business plan, articles of incorporation, invoices and receipts, contracts, income tax returns, business permit or license, proof of business ownership, bank statements and financial statements.
  3. Personal documents such as a copy of your passport, spouse and children’s passport, household registration, marriage certificate,     police certificate, military records, court and prison records, medical records, and your employment history documents.
  4. Evidence that the business is established in a Targeted Employment Area (if applicable) so that the investment may be reduced to $500,000 as opposed to the $1,000,000 amount of investment.
  5. Evidence of job creation including payroll records, tax documents and form I-9 for employees

EB-5 Application Process

Step 1: Check eligibility and select the most suitable business to invest in. The most crucial part begins here, thus seeking a professional advice would be best.

Step 2: File a Petition

To get started, you will need to completely fill out and submit the Form I-526 – Immigrant Petition by Alien Entrepreneur. This form shall be submitted along with all the requirements and evidence, as well as the filing fee of $3,675 – which can be paid with a money order, personal check, cashier’s check or through a credit card. For payment using a credit card, Form G-1450, Authorization for Credit Card Transactions shall also be submitted. All these documents shall be directly submitted to USCIS for approval.

Step 3: Register Permanent Residence / Adjust your status / Apply for Immigrant Visa

If you’re already in the US and your petition got approved, you will then register your permanent residence in the US or adjust your status by filing the form Form I-485 – Application to Register Permanent Residence or Adjust Status. This form shall be submitted to USCIS along with all required documents and a filing fee of $1,140 and biometric services fee of $85 paid using money orders payable to U.S. Department of Homeland Security.

On the other hand, if you’re abroad, you will seek admission to the United States by filing the form DS-260 – Application for Immigrant Visa and Alien Registration with the U.S. Department of State to obtain an EB-5 visa from abroad. Filing of DS-260 is done online at the Consular Electronic Application Center (CEAC) website. Filing fee for this online application is $230.

Once approved, the investor along with his/her family shall be granted a conditional permanent residence for a 2-year period.

Step 4: Remove Conditions

Within 3 months before your 2nd anniversary as a conditional permanent resident, you will have to file the Form I-829 – the Petition by Entrepreneur to Remove Conditions on Permanent Resident Status. If not done within the 90 day period, USCIS may terminate your conditional permanent resident status and be forced to go back to your home country.

Filing the Form I-829 shall be accompanied with another set of requirements including the following:

  1. Evidences that you’ve made an investment in a commercial enterprise and have sustained the business throughout the 2-year period, such as invoices and receipts, bank statements, contracts, business licenses, income tax returns and federal or state income quarterly tax statements.
  2. Evidences that you’ve created at least 10 full time jobs to US citizens, such as payroll records, relevant tax documents and Form I-9 for employees.

Together with the form I-829 and the requirements, you will also have to include the filing fee of $3,750 and a biometric services fee of $85 via money order or check payable to U.S. Department of Homeland Security.  Payment using a credit card is not yet available in filing this form. All of these documents and fees shall be directly submitted to USCIS California Service Center for review.

Once USCIS approved the petition, the conditions will be removed from the investor’s residency status as well as his/her family’s. This means an investor together with his/her family are now eligible to get a green card and live in the US as permanent residents.

EB-5 Consultants

Today there are over hundreds of EB-5 Consultants you can find online – these companies or individuals can assist you all throughout the investment process. Is hiring an EB-5 Consultant or broker required? Certainly not. A foreign investor may choose to invest in a particular business project through his/her due diligence or hire a registered / licensed consultant to check the viability of a certain project. Is hiring a consultant ideal? Certainly! A consultant has wide information about investment offerings and top regional centers and can provide you comparisons, valuable information per offering such as track records – hence making it easier for you to decide where to invest your money.  

If you opt to hire a consultant, you will have to consider some factors including

  1. What are the services included?
  2. How many EB-5 investors have they worked with?
  3. How many years are they in service and how experienced they are?
  4. Is the consultant independent or affiliated with a specific regional center? Frankly, some consultants affiliated with a regional center can be biased – there are some unscrupulous consultants that only run after their commission, so beware.
  5. What are the available business projects available to invest in?

Bottomline

Keep in mind that the EB-5 Investment Immigration can be a complicated process that requires a lot of money, effort, time and dedication, but it can also be rewarding in the end. Truly, there is no shortcut in getting a US permanent residency, even if you have that much amount of money, you are still required to do certain things to complete the hurdles to be able to get permanent residency. Still, we can say that this EB-5 Fifth preference is one of the easiest way to be a permanent resident in the US as long as you have that large amount of wealth. It’s not really a shortcut but as they say, EB-5 is a golden visa and a golden ticket to your American dream.

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