Immigrant Investors: Fifth Employment-Based Preference (EB-5)

The fifth employment-based preference sets aside 10,000 visas each year for immigrant investors whose new commercial enterprises will create a certain number of jobs in the United States. Of this, 3,000 visas are allotted to investors in targeted employment. Another 3,000 is set aside for investors in the Regional Center pilot program. There is no requirement for labor certification under this category.

The demand for EB-5 visas was low for the most part of the program’s history until recently when interest for a fast route to a green card grew especially after the latest visa retrogression in the employment-based preferences.

Regular Program

The basic or regular EB-5 program allows conditional residency to individuals investing $1,000,000 in a new or restructured commercial enterprise that employs at least ten U.S. workers. The capital requirement is lowered to $500,000 if the investment is in a targeted employment area which may either be a rural area with a population of less than 20,000 or an area with high unemployment of at least 150% the national average.

The investment must be “at risk” and actually committed. The investment may be in cash, cash equivalent, equipment, inventory, other tangible property and indebtedness secured by assets owned by the investor provided that he is directly and personally liable and the assets of the enterprise are not used to secure the debt. Furthermore, under the regular program, the investor must be engaged in the day-to-day management of the enterprise or in policy formulation and may not play a purely passive role toward his investment.

The investor is required to establish that the invested capital came from legitimate means. In order to qualify as an investment, the funds must be traced to a lawful source, such as gifts, inheritance or loans.

The enterprise must benefit the U.S. economy by creating direct employment for at least ten workers who are U.S. citizens, permanent residents or employment-authorized immigrants, excluding the family members of the investor. The employment created must be full-time or at least 35 hours per week and not intermittent, temporary, seasonal or transient.

Pilot Program

The pilot program allows investors to invest in approved Regional Centers. A regional center is an economic unit, public or private, which is involved in the promotion of economic growth, including improved regional productivity, job creation and increased domestic capital investment.”

Unlike the regular EB-program which requires as a general rule a $1 million investment, under the pilot program the minimum investment requirement is usually lower or only $500,000 since most Regional Centers are already in targeted employment areas. Another advantage of the pilot program is the relaxed job-creation requirement because it allows the indirect creation of employment, which may be demonstrated using forecasting tools such as multiplier tables, feasibility studies and analysis of the foreign and domestic markets for the goods or services to be exported. Investors may play a passive role in the management of their investment and need not actively manage it.

The pilot program is subject to Congressional reauthorization but has been regularly reauthorized since its inception.

Filing the Petition

The alien investor must file an I-526 petition along with the filing fee and supporting documents showing the investment in the enterprise or regional center and demonstrating that the funds came from a lawful source. Once that is approved, he can file for a conditional green card. Processing of the I-526 petition generally takes less than one year, making it one of the fastest routes to a green card.

Conditional Residence

Since only conditional residency is created under the EB-5 program, the investor must petition for the removal of the condition on his residence within 90 days before the second anniversary of the grant of his permanent residence. He must demonstrate that he actively invested the required capital and that he sustained the enterprise and investment requirements. Note that under certain circumstances, the USCIS may terminate the conditional residence, such as when the commercial enterprise was in fact not established.

The petition to remove conditional residence is made on Form I-829 which is filed along with the filing fee and supporting documentation on the enterprise, the investment and jobs created. The petition should include any spouse or children granted conditional residence.