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Investment Immigrant Green Card Program (EB-5)

EB-5 program (Immigrant Investor program in the U.S.), administered by U.S. Citizenship and Immigration Services (USCIS), was created by U.S. Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Since 1992, a pilot project for the Immigrant Investor program has been in place. The EB-5 program is managed by USCIS approved regional centers, which are economic public or private entities involved with the promotion of economic growth, regional productivity, job creation and increased domestic capital investment across U.S.

A list of approved Regional Centers can be found at the USCIS website (link).

Highlights of the EB-5 program:

·  No English language requirement

·  No age restriction

·  No minimum education requirement

·  No management or business experience requirement

·  No strict net worth requirement

·  Investor and family can keep their home country passports

·  Investor and family can live, work or retire anywhere in the United States

·  Children can attend any public school or university for the same cost as US citizens

·  Investor and family can travel internationally

·  Eligible to become US citizens after five years

EB-5 General Program Requirements

·  The program requires creation of a new commercial business in the United States.

·  Each investor must contribute a minimum capital of $1,000,000 into the new business, with the exception of $500,000 for investments occurring in certain “targeted” areas.

·  The investor must prove his capital comes from a lawful source

·  The new business must create a minimum of 10 full-time jobs for a period of 2 years for each foreign investor

·  The Program requires that the investor participate in the active management of the company.

Type of Investment

Under the EB-5 Program, all applicants must invest in anew commercial enterprise, which will be engaged in a for-profit activity formed for the ongoing conduct of a lawful business.

The commercial enterprise must be

a)  established after Nov. 29, 1990, or

b)  established on or before Nov. 29, 1990, that is:

·  Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or

·  Expanded through the investment so that there’s a 40-percent increase in the net worth or the number of employees increases

Capital Investment

Capital investment can be in the form of cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien entrepreneur. It must be obtained from legal sources and must not be from borrowed money. Alien entrepreneur is personally and primarily liable for the capital invested in the new commercial enterprise and cannot use it to secure any of the indebtedness. All capital shall be valued at fair-market value in US Dollars.

Required minimum investments are as follows:

The minimum qualifying investment for EB-5 qualification is $1 million.

However, if the investment occurs in the “Targeted Employment Area”, which is an area with high unemployment or a rural area, the minimum qualifying investment is $500,000.

Job Creation

Applicants of EB-5 program are expected through their investments to create at least 10 full-time direct or indirect jobs for qualifying U.S. workers within two years of admission to the U.S. as a conditional permanent residents. Indirect jobs are considered only if the Investor has invested his/her capital in a commercial enterprise affiliated with a regional center.

Investors might also be considered to fulfill job requirements by preserving jobs in a troubled business, which is defined as an enterprise that has been in existence for at least two years and has incurred a net loss during the 12- or 24-month period prior to the priority date on the immigrant investor’s Form.

Application Process – From Investor Immigrant Application to Permanent Status in the US

The process is straightforward and can be summarized in four steps as long as the applicant meets all the requirements for EB-5.

·  Client files the “Petition for an Entrepreneur” application (Form I-526)

·  Client files either;

·  Application to “Register Permanent Residence or Adjust Status” (Form I-485 with USCIS to adjust status to conditional permanent resident within the United States, or

·  Application for “Immigrant Visa and Alien Registration” (Form DS-230) with the Department of State to obtain an EB-5 visa for admission to the United States.

·  The EB-5 investor and dependents are granted conditional permanent residence for a two-year period upon the approval of the I-485 application or upon entry into the United States with an EB-5 immigrant visa

·  Client files “Petition by Entrepreneur to Remove Conditions” (Form I-829).

If application is approved by USCIS;

90 days prior to the two-year anniversary of the granting of the EB-5 investor’s conditional resident status (Green Card)

If USCIS approves this petition, the conditions are removed from the EB-5 applicant’s status and the EB-5 investor and dependents will be allowed to permanently live and work in the United States.

Please note that US Government neither guarantees the Investment nor the grant of permanent resident status under EB-5 Program. Applicants bear all the risk for their investment decisions and results.

Eligibility Criteria and Qualifications

To initially qualify, an investor must:

·  Prove the origin of the investment amount ($500,000) and administrative and legal costs.

·  Have a joint net worth of $1,000,000 (principal applicant and spouse), excluding the value

·  of the primary residence and related indebtedness; OR have individual income (principal applicant) of $200,000 in each of the last 2 years and the current year; OR have joint income (principal and spouse) of $300,000 in each of the last 2 years and the current year

·  Maintain his/her investment for a period of five years.

·  Accept that the government prohibits a guaranteed investment return or guarantees that eliminate all investment risk

·  Have no prior criminal convictions or immigration violations

·  Have no major health issues, and pass a standard medical test

·  Intend to spend a minimum of 180 days per year in the United States 

Definitions

Atroubled businessis an enterprise that has been in existence for at least two years and has incurred a net loss during the 12 - 24-months period prior to the priority date on the immigrant investor’s Form I-526. The loss for this period must be at least 20 percent of the troubled business’ net worth prior to the loss. For purposes of determining whether the troubled business has been in existence for two years, successors in interest to the troubled business will be deemed to have been in existence for the same period of time as the business they succeeded.

Aqualified employeeis a U.S. citizen, permanent resident or other immigrant authorized to work in the United States. The individual may be a conditional resident, an asylee, a refugee, or a person residing in the United States under suspension of deportation. This definition does not include the immigrant investor; his or her spouse, sons, or daughters, or any foreign national in any nonimmigrant status (such as an H-1B visa holder), or individuals not authorized to work in the United States.

Full-time employmentmeans employment of a qualifying employee by the new commercial enterprise in a position that requires a minimum of 35 working hours per week. In the case of the immigrant investor pilot program, "full-time employment" also means employment of a qualifying employee in a position that has been created indirectly from investments associated with the pilot program.

Ajob-sharing arrangement,whereby two or more qualifying employees share a full-time position, will count as full-time employment provided the hourly requirement per week is met. This definition does not include combinations of part-time positions or full-time equivalents even if, when combined, the positions meet the hourly requirement per week. The position must be permanent, full-time and constant. The two qualified employees sharing the job must be permanent and share the associated benefits normally related to any permanent, full-time position, including payment of both workman’s compensation and unemployment premiums for the position by the employer.

Atargeted employment areais an area that, at the time of investment, is a rural area. or an area experiencing unemployment of at least 150 percent of the national average rate.

Arural areais any area outside a metropolitan statistical area (as designated by the Office of Management and Budget) or outside the boundary of any city or town having a population of 20,000 or more according to the decennial census.

Adependentis the spouse and unmarried children under the age of 21.

EB-5 FREQUENTLY ASKED QUESTIONS:

How many immigrant visas are allotted for this classification?

The EB-5 program allots 10,000 visas per year for investor aliens and their family members. A minimum of 3,000 immigrant visas are set-aside for aliens who invest in designated regional centers, areas of high unemployment or other qualifying areas. The qualification for all these visas is an investment that results in the creation of at least ten (10) full-time jobs for U.S. workers.

What are some of the benefits of the EB-5 visa program?

Qualifying investors, their spouses and unmarried children under 21 will be granted U.S. lawful permanent residency; No minimum age, English, employment experience, nor education requirements; Investor and family may live/work anywhere in the United States; No requirement for immigrant investors to manage their investment on a day to day basis; After five years, the investor and family may obtain U.S. citizenship, subject to meeting all immigration requirements as required under law.

Where can I find EB-5 law and regulations to review?

Please go to the US Bureau of Citizenship and Immigration Services website:  http://www.uscis.gov/portal/site/uscis

Must the investor have previous business experience or education?

The investor is not required to have any prior business experience. Likewise, the investor is not required to demonstrate any minimum level of education. The only requirement for the investor is that he/she has the required net worth and capital.

Must the investor speak English?

No, it’s not required.

Must the investor be in good health?

Yes. The investor must have no communicable diseases and must have received proper vaccinations.

What is meant by the requirement of the investor’s assets be “lawfully gained”?

Under USCIS regulations, the investor must demonstrate that his assets were gained in a lawful manner. This requires the investor to prove his investment funds were obtained through lawful business, salary, investments, property sales, inheritance, gift, loan or other lawful means which can be proven by:

·  Foreign business registration records;

·  Corporate, partnership, and personal tax returns including income, franchise, property (whether real, personal, or intangible), or any other tax returns of any kind filed within five years within any taxing jurisdiction in or outside the United States by or on behalf of the petitioner;

·  Evidence identifying any other source(s) of capital;

·  Copies of any judgments or evidence of all pending governmental civil or criminal actions, governmental administrative proceedings and any private civil actions (pending or otherwise) involving monetary judgments against the petitioner from any court in or outside the United States within the past fifteen years.

What is the difference between “conditional” and “unconditional” green cards? 

Under the regulations, an investor who is approved for the EB-5 immigrant visa receives a “conditional” green card, which must be reissued after two years, subject to removal of conditions. Otherwise, the two cards offer the same rights and privileges.

Can the investor apply for an EB-5 if he or she has been rejected or terminated in the past by USCIS for an L-1, E-2, B, or other visas?

Rejection in the past does not disqualify the applicant, unless the reasons for the rejection is related to immigration fraud, or other major problems. It is most important that all criminal, medical, or U.S. immigration history problems be disclosed to the limited partnership and legal counsel in advance of the application.

What is a Regional Center?

A “Regional Center” is an entity, organization, or agency that has been approved as such by the USCIS. Regional centers may collect foreign investment capital and redirect it into investment projects to promote economic growth in the U.S. and create new jobs.

What is the guarantee of the investment capital return?

As any other investment, EB-5 investment implies a certain degree of risk associated with investing in new or growing business. Depending on the Project, it may take up to 5 years for investment capital to be returned to investor.

Are there any other fees payable by the investor besides the $500,000 investment capital? 

Yes. The regional centers may charge between $40,000 and $60,000 administrative fee in addition to the investment capital. In case of denial of the initial I-526 application (Immigrant Petition by Alien Entrepreneur) by the USCIS, many regional centers return the entire amount or big portion of administrative fee to the investor. It is also the responsibility of the investor to pay the government application fees for I-526 and I-829 (Petition by Entrepreneur to Remove Conditions), which are $1,500 and $3,835 respectively. The Investor may also pay a local immigration attorney to help him file I-526 and I-829. 

How long does it take to process the I-526 and issue the visa?

It usually takes 4-5 months for the visa to be issued, assuming that all documents have been filled out in a proper manner and there is no need for additional evidence or documentation.

What are qualification points for investor?

To qualify as a EB-5 Investor, potential investors should:

·  Not be a “U.S. Person” as defined in Rule 902 of regulation S under the Securities Act of 1933;

·  Be an “accredited investor” as defined in Rule 501 of Regulation D under the Act and have a net worth (or joint net worth with the spouse) in excess of USD $1,000.000 or $500,000;

·  Have had individual income in excess of USD $200,000 (excluding the spouse) in each of the two most recent years (or joint income in excess of USD $300,000 in each of those years), and have a reasonable expectation of reaching the same income level in the current year;

·  Have the capacity to evaluate the merits and risks of the prospective investment, and to protect his interests in connection with the prospective investment by reason of his own and/or financial experience;

·  Purchase securities for his own investment purposes only and not with a view towards resale or distribution.

What information should the investor provide?

To qualify as a EB-5 Investor, potential investors should provide:

·  Personal Information– Exact and full legal name, current residence address, home telephone, emails address, date of birth, and places of residence where the investor lived before;

·  Business Information– Occupation, Number of years being employed by b or owning the business, position or title, business address, business telephone, address, fax;

·  Eligibility- Provide eligibility information described above and fill out eligibility questionnaire:

·  Provide a valid I.D.

What is application process for EB-5 investors?

The general process is as follows:

Recruitment of EB-5 Investors 

Investor fills in the qualification questionnaire and, if pre-qualified, pays the deposit of $10,000 to the regional center

The regional center provides the EB-5 Investor with a Confidential Offering Memorandum describing EB-5 Investment Project

Investor signs a subscription agreement and provides background information 

Investor deposits the USD$500,000 into secure bank escrow account and pays the regional center’s subscription fees. The regional center checks the sources of the investment

Investor’s attorney submits I-526 application to USCIS

Approved: Escrow account releases USD $500,000 to partnership account

Denied: Escrow account returns 100% of USD $500,000 to investor

Investor has interview at the U.S. Consulate and is issued the immigration visa

After 21-24 months investor’s attorney submits I-829 application to USCIS for unconditional (permanent) Green Card

Conditional status of Green Card is removed and Green Card becomes permanent

After 5 years of issuance, investor is divested of EB-5 Investment Project (returned $500,000) and along with the family may apply for U.S. Citizenship

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