Job Creation Requirements

An EB-5 investor must invest the required amount of capital in a new commercial enterprise that will create full-time positions for at least 10 qualif​ying​ employees.​  

• For a new commercial enterprise ​not located within a regional center​,​ ​the full-time positions ​must be created​ directly by the new commercial enterprise to be counted.​ ​This means that the new commercial enterprise (or its ​wholly owned​ subsidiaries) must itself be the employer of the qualifying employees​.​​
• For a new commercial enterprise located within a regional center, the f​ull-time positions ​can be created​ either directly or indirectly by the new commercial enterprise. ​​
• Direct jobs are those jobs that establish an employer-employee relationship between the new commercial enterprise and the persons it employs.
• Indirect jobs are those jobs held outside of the new commercial enterprise but that are created as a result of the new commercial enterprise.
• In the case of a troubled business, the EB-5 investor may rely on job maintenance.
• The investor ​must show that the number of existing employees is being​,​ or will be​,​ maintained at no less than the pre-investment level for a period of at least ​2​ ​years.​ 

Benefits of the EB-5 Program for the Investor

In comparison with the other employment and family-based Green Card categories, the EB-5 program offers an expedited way for qualified foreign investors to obtain a US Green Card and US citizenship.

• Foreign investors do not need sponsorship from an employer or family member.
• There are no language, business, or education requirements for applicants.
• Investors who receive a Green Card through the EB-5 program are permitted to work and live anywhere in the US.

• Investors who receive a Green Card can travel to and from the United States without a visa.
• After establishing residency in the United States, investors and their children may be able to pay lower college and university tuition rates than foreign students.

What is EB – 5 Visa?

Employment Based Visa Category 5 (EB-5) is often called an investor visa. Foreign investors and their family members who meet certain, very specific criteria can qualify for this visa.

About the EB-5 Program.

Congress created the EB-5 Program in 1990 to benefit the U.S. economy by attracting investments from qualified foreign investors. Each investor is required to demonstrate that at least 10 new jobs were created or saved as a result of the EB-5 investment. The minimum amount of investment is $1 million or $500,000 if the investment is made in certain highunemployment areas or through a regional center.

The EB-5 regulations require the investment must be at risk in terms of both financial investment and immigration status. Meaning:

• Investments made through the EB-5 program must be "at risk" in the same way that investments in stocks or equity funds carry an inherent risk. Meaning that there is no guaranteed financial return.
• If the investor's application is approved by the USCIS, EB-5 investors receive a conditional green card that is valid for two years. In order to be eligible for a permanent green card the investors must demonstrate that the legally required economic benefits flowing from their investments have been achieved.

During the process, EB-5 investors are subject to the same background checks and national security screenings as applicants in any other visa category. Like any other investment vehicle, EB-5 investment funds are subject to U.S. securities and anti-fraud laws and regulations.

In 1992, congress enhanced the economic impact of the EB-5 program by permitting the designation of Regional Centers to pool EB-5 capital from multiple foreign investors for investment in USCIS-approved economic development projects within a defined geographic reign. Today, over 90% of all EB-5 capital is raised and invested by Regional Centers.

Eligibility

An investor can either get a green card alone or along with the spouse and unmarried minor children. The investor must have either already invested or actively in the process of investing the required amount of capital into a new commercial enterprise established by them. Furthermore, it must be demonstrated that the investment will benefit the U.S. Economy and create the requisite number of full time jobs for qualified persons within the U.S.

Generally, Eligible individual include those:

1. Who establish a new commercial enterprise by:
   • Creating a new business;
   • Purchasing an existing business with simultaneous or subsequent restricting or reorganization resulting in a new commercial enterprise; or
   • Investment of the amount required so that a substantial change, such as expansion of an existing business by 40 percent of the pre-investment number of jobs or net worth, or retaining all existing employees in a troubled business that has lost 20 percent of its net worth over the past 12 to 24 months; and
2. Who have invested – or who are actively in the process of investing – in a new commercial enterprise:
   • At least $1,000,000 or
   • At least $500,000 where the investment is in a "targeted employment areas." A targeted employment area is an area that has experienced unemployment at a rate of at least 150% of the national average rate.
3. Who engagement in a new commercial enterprise will benefit the U.S. economy and:
   • Create full-time employment for at least 10 qualified individual that are U.S. citizens, permanent residents, or other immigrants authorized to be employed. The employment cannot include yourself, your spouse, your sons or daughters or any nonimmigrant aliens; or
   • Maintain the number of existing employees at no less than the pre-investment level for a period of at least two years, where the capital investment is being made in a "trouble business." A trouble business is a business that has been in existence for at least two years and that has lost 20 percent of its net worth over the past 12 to 24 months.

FAQs about EB-5 Regional Center Investments:

What is an EB-5 Regional Center?

An EB-5 Regional Center is an organization, designed and regulated by USCIS, which facilitates investments in job-creating economic development projects by pooling capital raised under the EB-5 immigrant investor program. Regional centers can be publicly owned (e.g. by a city, state or regional economic development agency), privately owned, or be a public-private partnership.

What do Regional Centers do?

• Identify investment opportunities that will create jobs in local communities, often in partnership with economic development agencies.
• Assist in marketing those investment opportunities to investors from around the world.
• Ensure that the investment offering complies with federal and state securities laws and SEC regulations as well as specific EB-5 requirements.

How are EB-5 investments affiliated with Regional Centers structured?

EB-5 investments that are affiliated with EB-5 Regional Centers are made through private placements – the sale of securities to a relatively small number of select investors. Like all private placements, which are used by companies to raise capital in a number of contexts, EB-5 private placements are governed by federal and state securities laws and regulations.

A private placement memorandum is developed that details the investment offering, including detailed explanations of the projects that will be funded along with disclosures of risk and material information consistent with all applicable federal and state laws. The economics of the project related to EB-5 specially, the expected job creation, are also detailed in the memorandum. In some cases, the issuer of the private placement memorandum is an EB-5 Regional Center itself. In other situations, the issuer is business entity that will be receiving the investment funds and is affiliated with a Regional Center.

What risks do investors face in EB-5 regional center investments?

By law, EB-5 investments must be "at risk" in the same way that any equity, stock or other type of investment carries inherent risk. Regional centers, like other entities that market investment opportunities, cannot guarantee a return on investment. Regional Centers also cannot guarantee return of the investment principal to the investor.

What kind of financial commitment do EB-5 investors make?

An EB-5 investor, by law, is required to invest a minimum of $1 million. However, if the investment is located in a Targeted Employment Area (a rural area or area of high unemployment designated by USCIS the amount could be less than $1 million. Regional Centers funding projects in a Targeted Employment Area can accept a minimum of $500,000 from each EB-5 investor.

Common FAQs:

What is the minimum amount of investment required?

For investments in areas other than "targeted employment areas," the minimum amount of investment is $ 1 Million. Investments in "targeted employment areas," including most regional center projects, can qualify with a minimum of $500,000.

What is a "targeted employment area?"

A targeted employment area is a rural area or a geographical area that has experienced unemployment at a rate of at least 150% of the national average rate. Individual states are authorized to designate geographical areas within the state that qualify as targeted employment areas.

What is included in calculating the investment amount?

The entire amount of the investment need not be in cash. Assets transferred to the U.S. investment can be included at fair market value. Amounts borrowed by the investor can be included in the required minimum investment amount but only to the extent that the debt is secured by assets owned by the investor, and the investor is personally and primarily liable. The assets of the business in the United States in which the investment is made cannot be used to secure any of the indebtedness.

Must the entire amount of the investment be made at the time of filing an EB-5 petition?

The entire amount of the investment need not have been made at the time of filing the petition. However, the investor must prove availability of the funds and an actual legal commitment of the required amount of capital. A mere intention to invest or plans for a future investment where there is no present commitment of the funds will not qualify. Most approved EB-5 investors have invested the full $500,000 or $1,000,000 at the time of application.

Are there any restrictions on the types of businesses in which the investment must be made?

The investment must be in a "new commercial enterprise" in the United States. "New" means that the investment must have been made after November 29, 1990. "Commercial" is to be distinguished from a passive, speculative investment, such as a purchase of real estate for use as a personal residence or for potential appreciation in value (as opposed to an active real estate development project).

The U.S. investment can be: (1) the creation of a new business; (2) the purchase of an existing business, which is reorganized to form a new enterprise; or (3) the expansion of an existing business.

Are there any specific rules regarding an investment in an existing business that enables the existing business to expand?

The investment must result in a 40% increase either in the net worth or the number of employees of the business. For example, if a business has a $5 million net worth and employs 50 people, the investment would qualify either if it increases net worth by $2 million or if it results in an expansion of 20 employees.

Must the investor have any specific relationship with the U.S. business in which the investment is made?

The investor need not own any specific percentage of the business, be an officer of the business or be an employee of the business. However, the investor must be engaged in some way in the business, whether through actual day-to-day managerial control, by being a member of the board of directors, by being a limited partner, or the like.

Must the investment result in the creation of employment for U.S. workers?

The investment must create full-time employment for at least 10 U.S. citizens or immigrants (permanent resident aliens and other specified immigrant categories). The required 10 positions cannot include the investor or the investor's spouse or children. The 10 jobs must be for employees of the enterprise in which the investment is made and cannot include independent contractors. However, for approved regional centers, the creation of employment can include indirect and induced employment.

When must the employment be created?

The EB-5 petition must document that the required 10 jobs will be created within a 2 1/2 year period immediately following the approval of the EB-5 petition.

May two or more investors qualify for immigration based upon a pooled investment in a single business?

There is no limit to the number of investors who may qualify for immigration based upon an investment in a single business. However, each investor must invest the required minimum amount, and the number of jobs created must be equal to ten times the number of qualifying foreign investors. For example, if five investors each invest $1 million in a business, they can each qualify for immigration if 50 jobs are created in the business.

Do all family members get conditional permanent residence status at the same time?

The investor, his or her spouse and any unmarried, under 21 year old children can obtain permanent residence at the same time and through a single investment of the mother or father.

Is the investor free to travel after obtaining conditional permanent resident status?

The investor is free to travel in and out of the United States subject to the rules generally applicable to permanent residents. Specifically, the investor must maintain a residence in the United States and must not be outside the United States for a continuous period of one year or more, unless she has obtained a reentry permit.

What is the procedure for an investor to qualify as an immigrant based upon the investment?

Form I-526, "Immigrant Petition by Alien Entrepreneur," must be filed with USCIS. The petition must be supported by a substantial amount of documentation proving that the investor meets all of the requirements. Once the petition is approved, the investor may either apply for an immigrant visa at a U.S. Consul or, if the investor is in the United States, apply for adjustment of status to permanent residence.

Where is the application filed?

Form I-526 is filed with the USCIS. The application for conditional permanent residence is filed with USCIS if the investor is in the U.S. or through the National Visa Center if the investor will be outside of the U.S. and attending an interview at the U.S. Consulate in the home country. The condition removal petition, Form I-829, is filed with the USCIS.

What is the timing of this process?

The I-526 petition is generally reviewed within three to six months for a direct EB-5 and often more than a year for a regional center EB-5. The conditional permanent residence process generally takes between six and twelve months depending upon whether the investor is in the U.S. or, if outside of the U.S., which consulate will be interviewing the investor.

What documents must be filed with the petition?

The basic rule is that there must be documentation to establish each of the requirements set forth above. Specifically, documentation must prove the actual transfer or commitment of funds; the lawful source of the investor's funds; the location of the investment in a targeted employment area (if the investment is less than $1 million); the investment in a new commercial enterprise; the involvement of the investor in the business; and the actual creation of 10 full-time positions or a comprehensive business plan showing the need for the 10 employees and the approximate dates when they will be hired. Specific additional documents will be required depending upon the details of the investor and the investment being made.

What documentation must be presented to prove that the investor's funds came from a lawful source?

Generally, the investor will present some combination of individual and/or business tax returns, employment records, documentation regarding sale of or dividends from a business, documentation regarding gifts or inheritance, and documentation regarding securities or real estate transactions.

Can all of the invested funds be a gift?

Yes. However, in that case, the person giving the gift must prove the lawful source of the gifted funds.

What is a regional center?

USCIS has approved a large number of regional centers. If an investor invests in one of these approved regional centers, the investor will not need to prove the creation of direct jobs for 10 U.S. workers. Rather, creation of indirect and induced employment based upon econometric projections is sufficient.

Is an investment in a regional center guaranteed?

No. There is both an immigration risk and a financial risk. Regional centers may have a number of different projects. It is possible for a regional center to obtain pre-approval of a specific project. Even if a project is pre-approved, there is an immigration risk as to whether the necessary jobs will be created in order to obtain removal of conditions. There is also financial risk in every investment. For these reasons, it is critical for the investor to choose both the regional center and the regional center project very carefully.

What must be proven in order to obtain removal of conditions on permanent residence?

The investor must prove that the investment has been sustained – not withdrawn – and that the requisite jobs have been created.

What happens if the necessary jobs are not created?

If the necessary jobs will not be created, the investor will not be able to obtain removal of conditions on permanent residence and will lose any legal status in the U.S. If there will be a change or delay in creating the necessary jobs, it may be necessary for the investor to file a new I-526 petition and obtain a new two year period of conditional permanent residence status. It may not be necessary to do this if the investor can prove at the time of filing of the I-829 petition that all of the necessary jobs will be created within a "reasonable time" (defined as one year).

When is it possible to apply for U.S. citizenship?

Four years and nine months after obtaining conditional permanent residence status if the investor meets physical presence and residence requirements. Applying for U.S. citizenship is optional.

Disclaimer:

All comments and/or opinions are for general and educational purposes only, and should not be used as legal advice. In addition any comments and/or opinions do not create an attorney-client relationship. In order to obtain a comprehensive and accurate legal opinion you should consult an attorney with the specific and detailed facts or your case/question.

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