The Immigrant Investor Program, also known as “EB-5” - September 2010
By Herschel Gavsie, Esq.
The Immigrant Investor Program, also known as “EB-5”, was created by Congress in 1990 under § 203(b)(5) of the Immigration and Nationality Act (INA) to stimulate the U.S. economy through job creation and capital investment by foreign investors. Foreign investors have the opportunity to obtain lawful permanent residence in the United States for themselves, their spouses, and their minor unmarried children by making a certain level of capital investments and associated job creation or preservation.
There are two different EB-5 pathways for a foreign investor to gain lawful permanent residence: the Basic Program and the Regional Center Pilot Program. Both programs require that the foreign investor make a capital investment of either $500,000 or $1,000,000 (depending on whether the investment is in a TEA1 or not) in a new commercial enterprise located within the United States. The new commercial enterprise must create ten full-time jobs for qualifying U.S. workers within two years of the foreign investor’s admission to the United States as a Conditional Permanent Resident (Conditional Green Card valid for two years).
When making an investment in a new commercial enterprise affiliated with a United States Citizenship and Immigration Service (“USCIS”)-designated regional center under the Regional Center Pilot Program, a foreign investor may satisfy the job creation requirements of the program through the creation of either direct or indirect jobs2. Note however, that a foreign investor making a capital investment in a new commercial enterprise under the Basic Program may only satisfy the job creation requirements of the program through the creation of direct job and must actively play a management role in the business. The investment though a regional center is usually made by subscribing as Limited Partner in a Commercial Enterprise managed by a General Partner and the foreign investor’s funds are usually held in Escrow in a US bank account pending the approval of the I-526 Petition where the foreign investor must provide sufficient proof of his/her lawful source of funds making up the EB-5 Investment and plays only a limited management role as Limited Partner.
After Filing a Form I-526 and receiving approval for a qualifying investment, the foreign investor and his or her spouse and unmarried minor children either can apply by filing a Form I-485, Application to Register Permanent Residence or Adjust Status within the United States, or through an Immigrant Visa Application filed at a United States Embassy or Consulate abroad and will upon approval be issued a Conditional Green card valid for two years.
A second application, Form I-829 Petition by Entrepreneur to Remove Conditions of the Conditional Green Card, is required to be filed in accordance with Section 216A of the INA between 21 and 24 months from the issuance of the Conditional Green Card. This petition must demonstrate that all of the terms and conditions of the EB-5 program have been met by the foreign investor.
The investments through Regional Centers3 are required to be “at risk” and usually required to be left in the commercial enterprise for 5 years. If the investment is made other than through a Regional Center, then the investment must be sustained until the receipt of the second unconditional Green card which is valid for ten years and renewable. It is important for the foreign investor to do proper due diligence investigation both with regard to the proposed investment and the Regional Center
- A “TEA” means a Target Employment Area where the unemployment rate is at least 150% over the US National Unemployment Rate as published by the US Department of Labor.
- Direct jobs are those jobs that establish an employer-employee relationship between the newly established commercial enterprise and the persons that they employ.
Indirect jobs are the jobs held by persons who work outside the newly established commercial enterprise. For example, indirect jobs include employees of the producers of materials, equipment, and services that are used by the commercial enterprise. There is also a sub-set of indirect jobs that are calculated using economic models that are known as induced jobs.
- A “Regional Center” is defined as any economic unit, public or private, engaged in the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.
10,000 visas are available each Fiscal year beginning on October 1st of each year specifically designated for the EB-5 category, 3000 of which are reserved for the Regional Center program as a priority.
There are currently 111 Regional Centers designated by USCIS in the U.S.
For further information, please contact:
Herschel Gavsie, Esq. Toll Free: 1-888-491-1120 E-mail: Herschel.Gavsie@gmlaw.com
MEMBER OF THE AMERICAN IMMIGRATION LAWYERS ASSOCIATION (AILA)