EB-5 Immigrant Investor Process

by Nexsen Pruet, PLLC
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The U.S. Immigration and Nationality Act currently allocates 10,000 “EB-5” immigrant visas per year to qualified individuals seeking Lawful Permanent Resident (LPR) status - also known as a “green card” - on the basis of their capital investment in a commercial enterprise in the United States.  Although the EB-5 program has existed for a number of years, its popularity is a recent development.  Nexsen Pruet’s International Team includes corporate and immigration attorneys with an abundance of trans-border transaction and visa experience.  We are available to help structure – or even to suggest alternative visa categories, as necessary, for – your investments in the United States.

Foreign nationals may be eligible for an EB-5 immigrant visa if they have invested – or are actively in the process of investing - the required amount of capital into one of the following for-profit business types:

1. A new commercial enterprise (created after 11/29/1990);

2. An enterprise which will expand to 140% of its pre-investment net worth or pre-investment number of employees; or

3.  A troubled business in which jobs will be preserved.

The standard capital investment requirement for an EB-5 investor is US$1 million.  The capital investment requirement for an EB-5 investor in a Targeted Employment Area (TEA) - which is either in a high unemployment area, (calculated as an area with an unemployment rate that is at least 150% of the national average), or a rural area – is reduced to US$500,000.  Congress has reserved 3,000 of the 10,000 EB-5 visas for EB-5 investors who invest in TEAs.

Each EB-5 investor must demonstrate that their capital investment will create/preserve at least ten (10) jobs for qualified U.S. workers within the United States.   A qualified U.S. worker is a U.S. citizen, LPR, asylee or refugee.  Jobs created for nonimmigrant workers and/or members of the EB-5 investor’s family are not qualifying jobs.

There are four steps to becoming a Lawful Permanent Resident (LPR) through the EB-5 program (and Nexsen Pruet lawyers can assist every step of the way):

1. Form I-526 immigrant petition approval.  The EB-5 process begins with the filing of Form I-526 with US Citizenship and Immigration Services, part of the US Department of Homeland Security.  In some cases, the EB-5 investment is made directly by the alien investor into the new or existing commercial enterprise.  In many other cases, the EB-5 investment is made through a USCIS-approved Regional Center.  The primary advantage of investing through a Regional Center is to be able to count “indirect” jobs, along with “direct” jobs resulting from the EB-5 investment.  Another benefit may be a Regional Center’s expertise in, or due diligence vetting of, a particular venture. Nexsen Pruet attorneys can provide introductions to appropriate Regional Centers, as necessary. 

An EB-5 investor must prove that:

Form I-526 Petition for an Alien Entrepreneur

Requirements

Supporting Documents (Customary Evidence)

The investment has been made in a “New Commercial Enterprise”

Evidence that you have invested in a “for profit” new commercial enterprise, which is a commercial enterprise:

  • Established after Nov. 29, 1990, or
  • Established on or before Nov. 29, 1990, that is:
    1. Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or
    2. Expanded through the investment so that a 40-percent increase in the net worth or number of employees occurs

Evidence, if applicable, that your new commercial enterprise has been established and is principally doing business in a targeted employment area (TEA).

The investor is helping to manage the New Commercial Enterprise

 Evidence that you will be actively involved in the management of the new commercial enterprise (day-to-day or through policy).

The amount of the investment complies with the EB-5 program guidelines

Evidence that you have invested or are in the process of investing the amount required ($1 million or $500,000).

Evidence that the investment funds were obtained through lawful means. Evidence that the capital used was legally acquired may be demonstrated by the following:

  • Foreign business registration records;

  • Personal and business tax returns, or other tax returns of any kind filed anywhere in the world within the previous five years;

  • Documents identifying any other source of money;

  • Certified copies of all pending civil or criminal actions and proceedings, or any private civil actions involving money judgments against the investor within the past 15 years.

The requisite number of jobs have been created

Evidence that the new commercial enterprise will create at least 10 full-time positions—not including yourself, your spouse, sons or daughters, or any temporary or nonimmigrant workers, or individuals who are not authorized to work in the United States. You will need to submit a comprehensive business plan showing that, due to the nature and projected size of the new commercial enterprise, the need for not fewer than 10 employees will result. Include approximate dates, within the next two years, and when each employee will be hired.

Note: Regional center-affiliated cases must show that the capital investment was made in accordance with the regional center’s business plan in order to be credited with the creation of indirect jobs.

Or, the requisite number of jobs in a troubled business have been preserved

The same evidence which is mentioned above for job creation except instead of the evidence that the business will create at least 10 new jobs, you must submit evidence that:

·        The number of existing jobs is being or will be maintained at no less than the pre-investment level for a period of at least two years; or

·        Photocopies of tax records, Forms I-9 (Employment Eligibility Verification), or other relevant documents for the qualifying employees and a comprehensive business plan shall be submitted in support of the petition.

* Note: To be approvable, at least 10 jobs must be maintained.

* Note: Regional center-affiliated cases must show that the capital investment was made in accordance with the regional center’s business plan in order to be credited with the preservation of indirect jobs.

2. Application for an Immigrant Visa.  Following approval of the I-526 petition, the EB-5 investor can then apply for an immigrant visa either through adjustment of status (Form I-485, filed with the USCIS in the United States) if the investor is in the United States, or through an application for an immigrant visa (Form DS-230, filed with the U.S. Department of State) at a U.S. Embassy or Consulate abroad.

Your spouse and unmarried children under the age of 21 may be admitted to the U.S. with you during the two-year conditional period.  If your I-829 petition to remove conditions is approved, as described below, the conditional nature of their LPR status will also be removed from your spouse and children’s Green Card status.  As lawful permanent residents (LPR, or “green card” holders) you, your spouse and your children will be authorized to work or attend school in the U.S.

3. Conditional Resident Status.  Upon approval of the Form I-485 or admission on an EB-5 immigrant visa, a foreign national, and his or her family, are granted two-years of conditional lawful permanent resident status.

4. Removal of Conditional LPR Status by Filing Form I-829.  A Form I-829 petition to remove the conditions on the LPR status must be filed at the end of the two-year conditional period. If the alien has fulfilled the EB-5 requirements, then the conditions will be removed and the alien will be an unconditional LPR.   The filing of Form I-829 must establish that:

Form I-829 Petition by Entrepreneur to Remove Conditions

Requirements

 Supporting Documents (Evidence)*

A compliant investment did occur

Evidence that you in fact invested in a new commercial enterprise. This evidence may include, but is not limited to, copies of the business’ organizational documents and federal tax returns.

Evidence that you have invested or are actively in the process of investing the total amount of required funds.


Evidence that you have sustained your investment in the new commercial enterprise throughout your two-year period of conditional permanent residence. This evidence may include, but is not limited to, the following:

  • Business invoices and receipts

  • Bank statements

  • Contracts

  • Business licenses

  • Audited or reviewed financial statements

  • Complete copies of federal or state income tax returns or quarterly tax statements

Compliant job creation has occurred

 Evidence that you created or will create within a reasonable time 10 full-time jobs for qualifying employees. Such evidence may include, but is not limited to:

  • Business payroll records

  • Relevant tax documents

  • Employee Forms I-9

Or, as applicable, compliant job preservation in a troubled business has occurred

The same documentary requirements for job creation mentioned above, except that the investor must show that he or she has maintained (not created) the number of existing employees at no less than the pre-investment level for the period following his or her admission as a conditional permanent resident.

*Note: To be approvable, at least 10 jobs must be maintained.

*Note: Regional center-affiliated cases must show that the capital investment was made in accordance with the regional center’s business plan in order to be credited with the preservation of indirect jobs.

NEXSEN PRUET CAN HELP:

Our firm routinely assists foreign businesses and nationals with investments in the United States.  We have structured in-bound transactions from many countries, and we have represented investors with multiple reasons for investing in the United States.  Whether your investment motivation is a strategic business expansion in the United States, or LPR status for your children so they can pursue higher education studies in the US, Nexsen Pruet can help.

In addition to assisting with every aspect of the immigration process we can also provide:

  • Tax Advice;
  • Corporate and Securities Counsel;
  • Administrative, Regulatory and Commercial Advice
  • Economic Incentives and Real Estate Advice;
  • Business Succession and Estate Planning Counsel; and
  • Relocation Referrals

We look forward to working with you.  Please do not hesitate to contact our International Team at any time.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Nexsen Pruet, PLLC | Attorney Advertising

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