USCIS evaluates an investor’s I-526 petition based on the following five (5) criteria:
a) Investment Amount Meets EB-5 Requirements
An EB-5 investor’s I-526 petition must demonstrate that the minimum required capital was invested in a new qualifying business enterprise. For projects located within a TEA, the minimum investment amount is $500,000. Projects not located in a TEA, however, require a minimum investment of $1,000,000. In order to meet USCIS requirements, the invested capital must also be considered “at risk” and irrevocably committed to the project.
b) Investment Capital Was Lawfully Obtained
The EB-5 investor must also be able to clearly demonstrate on his or her I- 526 petition that the invested capital was obtained lawfully. The investor must trace the capital from its source—a salary, investment distribution, sale of property, loan against property (LAP), inheritance, margin loan based on marketable securities portfolio etc.—to the NCE. Funds given to the investor must also be traced back to their source.
What is meant that the investor’s assets be “lawfully gained”?
Under USCIS regulations, investors must demonstrate that investment assets were gained in a lawful manner such as income from a bona fide business, salary, investments, sale of a property, inheritance, gift, loan or other lawful means.
c) Capital Was Invested in a New Commercial Enterprise
An EB-5 investor’s I-526 petition must demonstrate that the necessary amount of lawfully obtained capital was invested in a NCE. An NCE is defined as a for-profit entity engaged in ongoing, lawful commercial business activity. The enterprise must have been established after November 29, 1990.
d) New Commercial Enterprise Creates Required Number of Jobs and Business Plan is Compliant
Investing in an NCE is not, by itself, sufficient for EB-5 visa approval. USCIS requires that the Job Creating Entity (JCE) or Entities to which investor capital is provided must create at least ten full-time jobs for each EB-5 investor involved. The business plan underlying the project must also meet USCIS requirements.
For those who make direct investments, these ten positions must be created directly by the JCE and they must be permanent, full time (at least 35 hours per week), and filled by W-2 employees. Positions filled by the investor’s family cannot be counted toward the minimum job creation requirement. The investor’s I-526 petition must demonstrate that at least ten jobs have been or will be created. To demonstrate future job creation, the I- 526 must include a clear description of the NCE’s hiring plan, including which positions will be created and when they will be filled.
When sponsored by a regional center, an NCE must still create a minimum of ten positions per EB-5 investor, and these must also be full-time, but they can be created either directly or indirectly through investment in a JCE. Indirect jobs are those created through the operations of the JCE. Any indirect jobs counted toward an investor’s minimum job creation requirement must be predicted and described in the investor’s I-526 petition through an economic report.
e) Investor Is Actively Involved in the New Commercial Enterprise
In addition to demonstrating that a sufficient amount of lawfully obtained capital was invested in an NCE—and that the investment was responsible for the creation of ten job positions—an I-526 petition must demonstrate that the EB-5 investor is actively engaged in managing the NCE. Those who make direct investments in an NCE may manage the enterprise, act as a member of the entity’s Board of Directors, maintain voting control, or otherwise demonstrate day-to-day involvement with the business. Typically, NCEs sponsored by a regional center are structured as limited partnerships. In such cases, an EB-5 investor is a limited partner, and within the framework of the Uniform Limited Partnership Act, he or she is considered sufficiently engaged in managing the NCE to satisfy the requirements of USCIS. The same applies for limited liability companies.
USCIS approves I-526 petitions that clearly and credibly meet the criteria listed above. Once approved, investors and their families can apply for their EB-5 visas. EB- 5 visas grant foreign nationals conditional lawful permanent resident status for two years, at which time the investor must file Form I-829, Petition by Entrepreneur to Remove Conditions.