EB-5 FAQs

A “Green Card” holder, also known as a legal permanent resident, has many of the same rights as U.S. citizens. AGreen Card or Form I-551 confers the right to live and work in the United States and to travel to and from the U.S. In general, as long as one obeys U.S. laws, files taxes as a resident, and maintains residence in the U.S., one can remain a permanent resident. Deportation is rare, but can occur if one commits a criminal act (including acts of espionage or terrorism).

Unlike U.S. citizens, Green Card holders cannot vote in U.S. elections. They cannot remain outside the U.S. for unlimited amounts of time ormake their home elsewhere, andmust advise USCIS of changes to their address. Green Card holders cannot always get the same social assistance and welfare benefits from the federal government that U.S. citizens can; federal benefits such as supplemental security income (SSI), for example, aren’t made available to otherwise eligible Green Card holders until they have lived in the U.S. for five years. U.S. citizens can petition for a longer list of foreign national family members to join them in the U.S. than permanent residents can; whereas a U.S. citizen can file an immigrant visa petition for a 1) spouse, 2) son or daughter, 3) parent or 4) brother or sister, a U.S. lawful permanent resident (Green Card holder) can file an immigrant visa petition only for a 1) spouse or 2) unmarried son or daughter.

There are two forms of Form I-551: permanent and conditional. EB-5 participants who have had their I-485 adjustment of status form adjudicated OR who have passed a consular interview overseas following the electronic filing of form DS-260 will receive conditional permanent resident status—status that is only valid for two years. Conditional permanent residents must file form I-829 in order to have their two-year status made permanent. Form I-551 is the first step towards U.S. citizenship, as well. In order to become a U.S. citizen, a resident must first achieve Green Card status and only then is able to apply for citizenship through the naturalization process. Generally speaking, 90 days before the fifth anniversary of permanent resident status (including the two conditional years), an investor may apply for U.S. citizenship if wanted (provided that they meet all other requirements for naturalization).

Historically, construction jobs have not been counted toward job creation because they are seen asintermittent, temporary, seasonal and transient rather than permanent. According to USCIS’ Adjudication Field Manual, they now interpret that direct construction jobs may now count as permanent jobs if they: 1) are created by the petitioner’s investment; and 2) are expected to last at least two years, inclusive of when the petitioner’s FormI-829 is filed.

For investments in areas other than “targeted employment areas,” the minimum amount of investment is $1 million. Investments in “targeted employment areas,” including approved regional centers, can qualify with a minimum of $500,000.

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. Of the 10,000 visas available for investors, 3,000 are reserved for investments in targeted employment areas.

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. Debt 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 used to secure any of the indebtedness.

The entire amount of the investment need not have been made at the time of applying for an immigrant visa. However, the investor must prove availability of the funds and an actual 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.

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 in any one of four forms: (1) the creation of a new business; (2) the purchase of an existing business, which is reorganized to form a new enterprise; (3) the expansion of an existing business; or (4) the saving of a failing business.

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.

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.

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 is pre-approved and can include indirect employment.

The required 10 jobs must be created within the two- year period immediately following the investor becoming a permanent resident.

An investment in a “troubled business” may qualify without a requirement of showing the addition of new jobs to the business. In order to qualify, the business must have been in existence for at least two years and must have suffered a loss of at least 20% of its net worth during the past two years. The number of existing employees of the troubled business must at least remain the same for a period of two years.

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 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.

The permanent resident status granted to the investor is actually a “conditional permanent resident status” that is valid for a period of up to two years. The investor and family members are required to remove the condition by filing an application during the 90 day period preceding the second anniversary of obtaining this status. The petition will be required to demonstrate the establishment of the business, the investment of the requisite amount of capital and the creation of the required number of jobs.

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 actually have a residence in the United States and must not be outside the United States for a continuous period of one year or more.

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.

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 establishment of the new commercial enterprise; the involvement of the investor; 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.

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

USCIS has approved a number of regional centers. If an investor invests in one of these approved regional centers, the $500,000 investment amount will be sufficient. In addition, the investor will not need to prove the creation of jobs for 10 U.S. workers.