The EB-5 Employment Creation Immigrant Investor Visa

The EB-5 Employment Creation Immigrant Investor Visa

This visa is open to all nationalities. There is an annual quota of 10,000 such visas available, 3,000 of which are reserved to applicants who invest in “targeted employment areas” which are areas with above average unemployment and/or rural areas. Petition processing time in this category is current because the number of applicants has never reached the yearly quota.

Please note that we do not assist companies looking for investors. We assist foreign investors looking for qualifying EB-5 investment opportunities.

The Immigrant Investor Programs

1. The Regular Program
   The new enterprise created by the investment must:
   
   • Be one in which there is an investment of at least $1,000,000 made after November 29, 1990.
   • Benefit the U.S. economy. The new enterprise should be providing goods or services to U.S. markets. An enterprise exclusively serving overseas customers would not likely qualify.
   • Create full-time employment for at least 10 U.S. workers. Full-time employment means employment of a qualified person in a job with at least 35 working hours per week. However, certain job sharing arrangements where two people each work part-time in a position may qualify as a single full-time employment, provided the weekly hourly minimum requirement is met. U.S. workers include U.S. citizens, permanent residents of the United States and other U.S. residents legally authorized to work. The applicant investor and his/her spouse do not count towards the minimum 10 worker requirement. Please note that the job creation requirement is defined in terms of “employees” i.e., one receiving wages or other remuneration directly from the applicant investor’s commercial enterprise (except under the pilot program as discussed below where such employment may be indirect). For employment creation we do not include independent contractors.
2. Regular Program for Targeted Employment Areas and/or Rural Areas
   The requirements set forth under the regular program are the same for the regular program for targeted employment areas and/or rural areas except that the investment need be only $500,000. This means that the applicant’s enterprise must create jobs either:
   
   • In a rural area which is defined as an area not within a metropolitan statistical area as designated by the U.S. Office of Management and Budget or the outer boundary of any city or town having a population of over 20,000.
   • In an area that has experienced high unemployment of at least 150% of the national average. There are “targeted employment areas” within every state in the United States and each state designates the “targeted employment areas” for that state. Ferman Law can also advise you as to where there are targeted employment areas in a particular state.
3. The Pilot Program
   The pilot program has been extended to September 30, 2015, and 3,000 pilot program investor visas are available each year for persons investing in “designated regional centers”. The first requirement for the pilot program with regard to the amount of investment is the same as under the regular program. If the investment is in within a “targeted employment area”, the minimum investment is $500,000. If it is outside a “targeted employment area”, it must be at least $1,000,000.

   The second requirement of benefiting the U.S. economy is the same as the regular program, and one would expect that a proper pilot program would be developed to meet such requirement.

   The critical difference is with regard to the third requirement as to creation of full-time employment for at least 10 U.S. workers. In the regular program the investor’s enterprise itself must directly employ at least 10 U.S. workers. Under the pilot program it is sufficient if 10 or more full-time jobs will be created directly or indirectly as a result of the investment.

   Under the pilot program the U.S. Citizenship and Immigration Services (“USCIS”) has certified both private firms as well as state and local government agencies as designated regional centers. However, most designated regional centers are no longer in operation. Ferman Law can advise with regard to active designated regional centers and review the various pilot programs available.

4. Further requirements for the Immigrant Investor Visa:
   1. The applicant investor’s enterprise must be new, that is formed after November 29, 1990.
   2. The applicant investor’s enterprise must be a “commercial” enterprise. In other words, it must be a for profit activity engaged in the conduct of a lawful business. Commercial activity would not include owning and operating a personal residence or residences nor a non profit business.
   3. The applicant investor must have “invested” in the commercial enterprise. This can be done by:
      • Creating a new, original business
      • Reorganising or restructuring an existing business. What is required here is a substantial restructuring of an existing business enterprise. Merely changing the legal form of an enterprise from, for example, a partnership to a corporation does not suffice.
      • A major expansion of an existing business. Only if one were to expand an existing business by at least 40% of the net worth of the business as determined by audited financial statements or increase by at least 40% the number of employees of the business can one satisfy this requirement. Please note this may require an investor to create more than 10 new jobs to qualify. If you wish to qualify by virtue of increasing the number of employees of the business by 40% rather than by increasing the net worth of the business by at least 40% and the existing business has 30 full-time employees, you would need to create at least 12 new full-time jobs.
      • Pooling of investments. One can pool an investment with others also seeking EB-5 status provided that each applicant’s investment is at least $1,000,000 (or $500,000 in a “targeted employment area”) and at least 10 new full-time jobs are created for each investor. Pooling of investments is very common in the pilot programs.
   4. A major further requirement is legal acquisition of capital of the investor applicant. Only money earned and/or assets acquired by lawful means counts for the investor application. Hence, not only would any monies acquired through criminal activities not be included, but also monies earned whilst in the United States in an unlawful status. The applicant has the burden of proving the lawful acquisition of the funds invested. As a practical matter, the investor applicant will have to submit personal income tax returns for the prior five years.
   5. The investor must be involved in the management of the commercial enterprise. The applicant investor does not need to be involved in the day to day management of the enterprise. Management through policy formulation will suffice. If the enterprise is a corporation, the investor applicant would normally be a senior corporate office and/or a member of the board of directors. Where the enterprise is organized as a limited partnership, the applicant investor must show that he has the rights and powers of a limited partner of the Uniformed Limited Partnership Act and is entitled to exercise same.

Initially two year conditional residence is granted.
The EB-5 visa is initially granted for two years. In order to remain in permanent resident status and continue to reside in the United States, a further petition must be filed with the appropriate USCIS Service Center within the ninety-day period immediately before the two-year anniversary of an investor’s admission to the United States as a conditional permanent resident. Failure to file such further petition will result in the automatic termination of conditional resident status and could result in the start of removal proceedings. In order to remove the conditions on your permanent residence, a further petition should be filed with evidence which shows that the immigrant investor: (i) invested the required capital, i.e., at least $1,000,000 or at least $500,000 in a “targeted employment area”; and (ii) that such investment has created 10 full-time jobs. The USCIS will then either (a) approve the petition; (b) request further evidence; or (c) refer it to the local USCIS District Office for adjudication there. Referral is made when the requirements for removal of conditions have not been met. The case is then either denied without a personal interview or a personal interview is scheduled.

Position after removal of conditionality.
Once the investor’s petition to remove the conditions on his/her permanent resident status has been approved, the immigrant investor’s permanent residence is no longer restricted, and he/she can reside in the U.S. on a permanent basis. After five years of lawful permanent residence, the investor may be eligible to apply for naturalization (i.e., U.S. citizenship). Significantly, once the petition to remove the conditions on the investor’s U.S. permanent resident status has been approved, the investor may dispose of the enterprise and need not make any further investment.

How Ferman Law can help you:
Qualifying an individual for investor status is perhaps the most complicated process in U.S. immigration law. A thorough knowledge and understanding of corporate, tax, investment and, of course, U.S. immigration law are all required. We at Ferman Law have the requisite combination of business law and immigration law expertise. We are not, however, investment advisors. We can review a prospective immigrant investor enterprise and perform the necessary due diligence with regard to a pilot program scheme. In addition to the preparation of the initial petition and the substantial supporting documentation needed, upon approval, we will prepare the further documentation needed to obtain an EB-5 immigrant investor visa based on an approved petition. As part of such process, we will meet with the investor applicant and family members to prepare them for their personal visa interview. Thereafter, Ferman Law will assist and prepare the necessary petition to remove the conditions on their permanent resident status. Most encouraging is that the USCIS is keen to make the immigrant investor category more user-friendly in terms of processing times and dealing with investors’ concerns in an effort to increase the number of applications in this under-utilized category.