Green Cards (Common)
National Interest Waivers
Professors & Researchers
Executives & Managers
PERM Labor Certification
Investors (EB-5 visas)
Family (Spouse, etc.)
Work Visas (Common)
O-1 Extraordinary Ability
TN Canadians & Mexicans
J-1 Visa Holders
Nurses & Physical Therapists
EB-5 Visas: Green Cards for Immigrant Investors
An “EB-5 visa” refers to the path of obtaining U.S. lawful permanent residence through investment. To be eligible for an EB-5 visa, an individual must meet three basic requirements: (1) invest at least $1 million in a New Commercial Enterprise in the U.S. (or invest at least $500,000 if the investment is made in a Targeted Employment Area); (2) prove that the capital invested comes from a legal source (e.g., was not obtained through criminal activities); and (3) show that the investment has created or preserved, or will create or preserve, at least 10 new jobs for U.S. workers.
In addition to the principal investor, the investor’s spouse and the investor’s unmarried children under age 21 can also qualify for EB-5 visas as derivative beneficiaries.
Currently, the minimum investment amount for EB-5 visa eligibility is $1 million, except if the investment is made in a “Targeted Employment Area” (“TEA”). A TEA could be one of the following:
The minimum investment amounts are likely to increase in the near future, most likely to $1.2 million and $800,000, either through legislative changes by Congress or regulatory changes by the U.S. Citizenship and Immigration Services (“USCIS”). In addition, Congress may restrict the definition of a TEA in the future.
To qualify for EB-5 purposes, an investment must be in a “New Commercial Enterprise” (“NCE”), meaning any for-profit U.S. entity formed after November 29, 1990 for the ongoing conduct of lawful business in the U.S. The NCE’s management structure must provide for the EB-5 investor’s involvement, either through day-to-day managerial control or policy formulation. Although an EB-5 investor can satisfy the management requirement by taking a relatively hands-off policy formulation role, it is important to note that purely passive investments, such as the purchase of a residence or other property without any commercial or job-creating component, do not qualify for EB-5 purposes.
Every EB-5 investor must show that his or her investment in the NCE resulted in the creation of at least 10 full-time jobs for U.S. workers. If there are multiple EB-5 investors in a single NCE, the total number of jobs must be sufficient to allocate 10 full-time jobs to each EB-5 investor. Full-time means at least 35 hours per week. U.S. workers means U.S. citizens, green card holders, and other employment-authorized immigrant categories; those in nonimmigrant status, the alien, and the alien’s spouse and children do not count.
The job creation requirement is relaxed somewhat if the investment is associated with a USCIS-designated regional center. Full-time jobs in the regional center context can include indirect jobs as calculated using a reasonable economic methodology. In the non-regional center context, the jobs created must be actual, W-2 positions employed by the NCE. If the investment is in a troubled business, the investor can receive credit for jobs preserved in addition to jobs created, as long as the total number of jobs preserved and/or created is at least at the pre-investment level and sufficient to allocate at least 10 jobs to each EB-5 investor. To qualify as a troubled business, a business must have been in existence for at least two years and have incurred a net loss, equal to at least 20% of its net worth, during the 12- or 24-month period prior to the investor’s I-526 filing.
An EB-5 investment may (but does not have to) be associated with a USCIS-designated regional center. A regional center is a public or private entity, such as a corporation or limited liability company, which has applied for and obtained designation from USCIS to participate in the Immigrant Investor Program (also called the “regional center program”). A USCIS-designated regional center is authorized to sponsor job-creating capital investment projects in a defined geographic area and within specified industries for the purpose of enabling investors in such projects to receive credit for both directly and indirectly created jobs. By contrast, investors investing in standalone/non-regional center projects can only receive credit for jobs created directly by the NCE. (See below.)
Regardless of whether an investment is associated with a regional center, every investor seeking an EB-5 visa must satisfy the 3 basic requirements (minimum investment in an NCE, lawful source of capital, and credible projection of job creation or preservation). The main distinction between regional center-based investments and regular/non-regional center EB-5 investments is in how USCIS evaluates job creation.
Investors in the non-regional center context can only receive credit for direct jobs—actual, W-2 positions employed by the NCE. By contrast, investors in the regional center context can receive credit for indirect jobs (i.e., jobs created outside of the NCE) in addition to direct jobs (i.e., jobs created within the NCE). USCIS allows indirect jobs in the regional center context to be estimated using reasonable methodologies such as IMPLAN, RIMS II, REMI, or REDYN. This indirect jobs rule allows the Job Creating Entity (“JCE”) to be separate from the NCE in the regional center context. For this reason, a common investment structure in the regional center context is the so-called “loan structure,” in which an NCE raises capital from EB-5 investors and then loans the EB-5 capital to a separate JCE that uses the capital to create jobs. In the non-regional center context, such a loan structure is not allowed because the NCE always must be the JCE.
Many investors prefer to invest in a project that is sponsored by a regional center, because they do not have the desire or ability to start and manage their own business in the U.S. On the other hand, some investors do not feel comfortable entrusting a third party with their money and want to have full control over all business decisions. Such investors may prefer the direct EB-5 option, but should first thoroughly consider the pros and cons of investing in their own business in a foreign country (the U.S.), preferably in consultation with reputable and experienced business consultants, financial advisors, business lawyers, and/or U.S. business owners.
Obtaining an EB-5 visa is essentially a three-step process.
Each of the three major steps in the EB-5 process involves a separate government processing queue. Processing times are fluid, but it is now typically taking USCIS about a year-and-a-half to adjudicate the I-526 and I-829 petitions. The immigrant visa/adjustment of status application normally takes 6-9 months. Requests for evidence or administrative processing could further protract processing times. In addition to processing times, investors should expect to spend several months preparing the documentation required for each submission.
Investors born in mainland China can expect to face an additional wait of two years or more due to visa backlogs. Only about 10,000 visas are available per year in the EB-5 category. Of that total, the number made available to persons born in any single country may not exceed 7 percent (about 700), unless there are remaining visa numbers that would otherwise be unused. If demand from a particular country exceeds available EB-5 visas, a backlog occurs and the Department of State will establish a cutoff date in its monthly Visa Bulletin that determines how long an individual from the oversubscribed country must wait in line before being able to apply for a visa. (The cutoff date corresponds to the date of I-526 submission.) Currently, the demand from China well exceeds available EB-5 visas, even after allocating unused visas from other countries. The first cutoff date for China-born investors was established in April 2015, and since then has consistently reflected a backlog of approximately 24 to 28 months.
In general, the EB-5 visa has the following advantages over other employment-based green card options:
In general, the EB-5 visa category has the following disadvantages compared to other employment-based green card options: