One of the requirements for the EB-5 visa program is to invest in a business that was started after November 29, 1990. The business must be a for-profit enterprise and must be involved with lawful practices. These businesses can be a Sole Proprietorship, Joint Venture, Partnerships, Corporation, Holding Companies, a Publicly or Privately Owned Business Trust. These regulations were recently updated on 21st November 2019 and have been extensively covered in our blogs and whitepapers.
A business that is non commercial or a personally owned residence does not qualify for the EB-5 program requirements. The funds of the business must come from legal practices and not include any criminal activities. If a job cannot create at least 10 full-time positions for American workers, the business will not qualify for the EB-5 program.
Job Creation Requirements
The most important part of the EB-5 requirements to pay close attention to is the creation of jobs. Each EB-5 investor must ensure their investment goes into creating at least 10 full time positions for American workers. Each investor should provide the USCIS with a business plan to show how these positions can be created. Two years is the common amount of time the jobs must be created in. This is normally the amount of time for the conditional green card approval.
Direct investments into the EB-5 program for new commercial enterprises are required to create 10 direct jobs. This means the jobs must be identifiable. The direct jobs are the employees who will be working in the new business. For example, if the investment goes into creating a hotel, the receptionist or concierge who is hired to take those positions are the new jobs.
While the requirement of the program is to create 10 jobs, there are a number of areas where flexibility applies. Regional centers have the ability to count indirect and induced and direct job creation. Indirect jobs refer to those jobs that are created outside of the program because of the project. These means new positions for vendors and suppliers. Induced job are those jobs created in the community because of the project and the economic impact of the program. This could be due to the income of new employees.
Investors in the EB-5 program could also be credited for preserving jobs if they choose to invest in a stressed business. These enterprises are defined as an organization that has been operating for at least two years and are experiencing losses of 20 per cent prior to the EB-5 investment
The minimum amount of investment into the EB-5 program is currently $1,800,000. This means that the minimum cash, equipment, inventory or tangible property which is owned by the investor. The money cannot be from a loan. The EB-5 investor should not invest the total amount of money in the beginning. The amount should be used incrementally over the course of the two-year period.
Investors into the EB 5 program are required to make an investment of $1 million in the creation of a commercial enterprise. However, a number of projects can be lowered to $900,000 for those programs that are in a targeted employment area (TEA). TEA areas are normally those in rural areas or other areas which have a high unemployment rate. High unemployment rates that qualify for the program are those areas with 150 per cent or more of the national unemployment rate. The requirements for investing in a TEA are the same as above. The investment must show it is going into a lawful business. Funds must be shown to have originated from a legal source. Gifts, inheritances or other sources of the investment must have proof of its origin.
The qualifications for foreign nationals to gain permanent residency in the US through EB-5 investments, investors must meet certain criteria. There are three main requirements for the EB-5 visa program. Once these are met, investors and their family members will be able to gain permanent residency in the United States. The following explains these three requirements.
Invest in qualified business
The EB-5 project can be an investment in a new commercial enterprise either directly or through a regional center that will assist in the project. However, there are certain requirements to invest in a business that has already been established since November 29, 1990 and reviewed on 21st November 2019. No matter what the investment opportunity that will be chosen, the requirement that is most important is to create jobs for American workers. The project must be able to create positions for at least 10 full-time employees. Business ventures can either be a sole propriety, corporation or a partnership. Regional Centers can help to guide the investment into a TEA, which will help provide an opportunity for workers.
Investors can also choose if they would like to manage their business directly or not be bothered with the daily work routine. Regional Centers are ideal in that they are able to help sponsor projects in the right areas for job creation. Another advantage of using regional centers is that they are able to count direct, indirect and induced job creation as the requirement for the investor to meet the obligations of the EB-5 investment visa.
There are no restrictions on language or education level. There are also no restrictions on the investor’s occupation. The investor also does not have to have previous managerial experience. The minimum amount of investment must be met of $900,000. The money must also come with proof that it was received through legal means and that it originated from a legal source. The amount of investment can be gifted. However, the investment capital cannot come from a loan.
An investor could be disqualified from the program if they have been convicted of a crime. Membership to a communist party may also cause a disqualification from the program. Another serious disqualification is if the investor is found to have lied on the petition or during the immigration interview. If an investor has been denied a green card previously, this could also disqualify an investor. Each applicant will be required to have a physical examination. Health problems could also cause disqualification depending on the severity.
EB-5 Regional Center Program requirements
Regional centers are a useful tool for EB-5 investors in a number of ways. For example, they are able to assist with the documentation required to help find the right investment. A number of other areas such as managing the investment, helping to create jobs and fulfilling the requirements of the program can be found at the regional center.
While the amount of the investment is a requirement for the program, it is also important to remember that the capital used must be at risk until the end of the process is completed. There are no guarantees that the project will succeed, but there are a number of options that can provide the investor with greater chances of success. It is important to ask questions and research fully before becoming fully committed to the program.
Perhaps the best advice to give to investors who are intending on entering the EB-5 visa program is to first seek counsel from an experienced immigration attorney. Legal counsel can help in preparing the necessary documentation and help to set up the right fit to a regional center.
Securities attorneys are also another group of professionals who should be consulted when selecting the right regional center and the projects that are offered. Securities attorneys can also help to understand the structure of the business so that it is right for the investor.
A number of other professionals can help to ensure that the investment into the EB-5 program will go smoothly. However, it is a condition of the program that the money used for the investment is put at risk. It is not always a guarantee that the investor will make a return on their investment. However, with professional assistance, the risk can be mitigated, and the end result of gaining permanent residency can be achieved.