EB-5 GREEN CARD
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The Fifth Preference (EB-5) employment-based immigration category is for Immigrant Investors who create employment opportunities in the United States.
The US Citizenship and Immigration Service (USCIS) allocates approximately 10,000 visas per year for the EB-5 category.
An EB-5 applicant’s spouse and unmarried children under 21 are also eligible to apply for green cards.
REQUIREMENTS FOR EB-5 VISAS
There are two factors that are necessary for an individual to qualify for an EB-5 immigrant visa:
- Investment in a new commercial enterprise: Minimum $1 million, or $500,000 in a targeted employment area
- Create employment: The enterprise must employ at least 10 full-time US workers
The foreign national must have already made the investment at the time of petitioning, or they must be in the process of actively investing.
PROCESS FOR GETTING AN EB-5 GREEN CARD
STEP ONE: CONDITIONAL PERMANENT RESIDENCY
The initial application for EB-5 visas begins with an I-526 petition. In this petition, the foreign national must demonstrate that they will meet the conditions of the visa: namely, creating jobs and investing resources.
The foreign entrepreneur will need to document to the US government that they have a lawful source of capital. They must also show how they plan to use these resources in the enterprise. Finally, the foreign national must demonstrate how their investments will lead to job creation for US workers. Business plans are a common way to exhibit some of these concepts.
STEP TWO: MEETING THE CONDITIONS OF THE VISA
If the I-526 petition is approved, the immigrant entrepreneur will be granted conditional permanent residency for a two-year period. During this time period, the entrepreneur must meet the two requirements of the EB-5 visa: Job creation and investing their resources.
Once the two year conditional period is over, the entrepreneur is ready to file a I-829 petition. This petition must demonstrate that they have created ten or more full-time US jobs within two years.
The entrepreneur must also prove that their investment has remained “at risk.” This means the resources have been fully committed to the company without a guarantee that they will gain a return on their investment. They should face a risk of losing, in addition to the possibility of earning a return. If there is a sure bet they will earn a return on their investment, the resources are not considered “at risk” and the entrepreneur will not qualify (per Matter of Izummi).
If their I-829 petition is approved, the foreign entrepreneur and their dependents (spouse and unmarried children under 21) can earn a ten-year green card that is renewable indefinitely.
HOW & WHERE TO INVEST FOR EB-5
WHAT QUALIFIES AS A NEW COMMERCIAL ENTERPRISE?
A commercial enterprise, according to USCIS, is any for-profit activity formed for ongoing, lawful business operations. Acceptable business structures include:
- Sole proprietorship
- Partnership (limited or general)
- Joint venture
- Holding company
- Business trust
- Other entities (publicly or privately owned)
Acceptable commercial enterprises can also include a holding company and its wholly-owned subsidiaries, as long as each such subsidiary is for-profit and conducts ongoing, lawful business.
Commercial enterprises do not include activities like owning and operating a personal residence.
In order to be considered “new,” the commercial enterprise must have been established after November 29, 1990. For businesses established before that date, they can be either:
- Purchased by the investor, and restructured or reorganized to result in a different commercial enterprise
- Expanded through the investor’s funds, resulting in either a 40% increase in net worth or number of employees
An immigrant investor must invest a minimum of $1 million, or $500,000 in a targeted unemployment area. But what qualifies as capital? Capital investments include:
- Other tangible property
- Cash equivalents
- Indebtedness secured by assets owned by the foreign entrepreneur
Assets must be owned by the foreign national, and they must be personally and primarily liable for these assets.
The foreign investor may not lend money to the enterprise and use that toward the investment requirement, in most circumstances. However, the entrepreneur could use loan funds to invest in the business for an EB-5 visa, as long as the loan secured by the owner’s assets and not those of the company.
All capital is valued at fair market value, in U.S. dollars.
SMALLER INVESTMENTS: TARGETED EMPLOYMENT AREA
If an immigrant entrepreneur decides to invest in a Targeted Employment Area (TEA) the required investment is only $500,000.
There are two ways that a locality can qualify as a TEA:
- It is a rural area:
- Outside of a Metropolitan Statistical Area (MSA)
- Outside of the bounds of towns with populations of 20,000 or more
- It has unemployment at 150% of the national average
A minimum of 3,000 EB-5 visas are allotted each year to immigrants investing in TEAs, out of the total 10,000 available.
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