U.S. Immigration Explained Blog

INA (Immigration and Nationality Act) Section 203(b)(5), also called USC (United States Code) Section 1153 (b)(5), as well as 8 CFR (Code of Federal Regulations) 204.6 define the EB5 or EB-5 Green Card program. This program allows people from non E2 or E1 (Treaty Investor or Treaty Trader) countries to invest in the U.S. and gain residency. The bad news is that the people who look to the EB5 don’t qualify for the two easier methods…the L1 IntraCompany Transferee visa or the E-2 or E-1 Treaty Investor/ Treaty Trader visas.

The good news is that the EB5 can lead to a Green Card and later US citizenship. Of course there is always a price. Whereas you can get into the US with $100,000 or so with the L-1 or the E1 or E2, you need at least $500,000 for the EB5 and have to hire 10 US workers for a period of 2 years.

If you are from a treaty country, consider the E-2. It does not lead to permanent residency but has an interesting twist. If you intend to return to your country of origin at some unknown time in the future then you can renew it until that period arrives. The catch is being from a treaty country.

On the other hand, the L-1 requires you to work for or own a company and be a manager or executive of it for 1 year out of the past three. These 2 categories (manager or executive) can lead to a Green Card. The L1 has a third category called person of Specialized Knowledge, but that does not lead to a Green Card. However, if you do not own a foreign company or work for one as a Manager or Executive then your only choice is the EB5 and let’s proceed to make you familiar with it.

The EB5 requires you to invest either $1 million, or with certain requirements, $500,000 into a business and you must employ 10 US workers for 2 years. Until that time is completed, you receive a conditional Green Card. If you meet all the requirements, the condition is lifted and you receive a permanent Green Card and can later apply for citizenship. In order to apply, you should be clean of a criminal record, or if you have one, you need to have it waived. For more information on immigration waivers, visit www.WaiverStrategy.com.

There are a number of choices available with the EB5, and they include limited partnerships, holding companies, as well as a regular corporation you may choose to create or purchase.

You have the choice of creating a new company or investing in one that currently exists. In order to be considered ‘new’ the company must have been started after November 29th of 1990. If you purchase one that was established before that date, then you have to restructure, reorganize, or expand it in such a way that you make a substantial change in the net worth of the company, or the number of people working for it. Substantial is defined as a 40% change.

The important fact to know about the 40% change is that it can be a result of even counting the contribution of people other than those who are applying for status in the US. For more information visit 8 CFR (Code of Federal Regulations) 204.6.

If you are seeking to invest $500,000 then they call it investing in a targeted employment area. That is defined as an area with less than 20,000 in population or an area that is suffering 150% of the nation’s unemployment rate.

You have to be actually investing your money or in the process of investing. Of course, inventory and equipment count. However, if you enter into debt and it is secured by you, the entrepreneur and not your company, it also counts; however, a loan to the company does not count as part of the investment. In other words, the amount invested should be actual. The money for the investment can come from an account that is in the wife and husband’s name. In other words, the laws having to do with marriage and community property do not apply. However, the account can only be with the husband and wife; not other members of the family. The investment can only be in one commercial enterprise, not several. A

If you are loaned money to make the investment, it has to be secured by your own property, as I mentioned above. It also must be available to be legally seized if you do not repay your debt. That is not possible (seizure of assets) in some countries and then would not apply. If you are loaned money to make this investment, you have to complete paying it back in the 2-year period of Conditional Residency. If you are loaned money from a bank, you cannot use the assets of the company as security. Also, reserves don’t count if they are not available for investment. Important: you must show the source of funds so that there is a guarantee of legitimacy.

A nice feature is that you can have multiple investors in an EB-5 program. You can mix and match people wanting Green Cards with those who don’t want them. Each person who wants a Green Card will have to meet the requirements for both the investment and the number of employees. However, they will count all of the employees in the enterprise and if some are due to the investment of the non-Green Card applicant, they will still get credited towards those people seeking a Green Card.

LIMITED PARTNERSHIP

A Limited Partnership is allowed and you don’t have to be investing at its inception to qualify for the EB5.

JOB CREATION

You have to create 10 full-time jobs (counted as 35 hours a week) and excluding you and your family members. This is not about people but about positions, so even if the people filling the positions change, that still works fine as long as the job is filled by a USC citizen or immigrant worker (i.e. not a visa holder)(but a Conditional Resident is fine as is a Green Card holder=immigrant worker). Part-time jobs do not count, but 2 people may help to make up the 35-hour span.

REGIONAL CENTER

In 1993 Congress enacted a program that had the CIS (immigration department=Citizenship and Immigration Services) set aside a certain number of visas for people who invest in a Designated Regional Center. In that case, you do not have to create 10 jobs but the center has to show it has improved regional productivity.

JOB EXISTENCE

You have to show that the jobs have been created (easy) or that they will be created by the end of the 2-year period. You will demonstrate this with a comprehensive business plan.

REGIONAL CENTER

Investment in a Regional Center allows you to count indirect jobs that are created. You can invest $500,000 in a Regional Center that is considered to be in an area of high unemployment. In this case, someone with an idea makes a proposal to the CIS. If they believe that this center will provide a significant amount of indirect employment, then it becomes designated. At that stage, a corporation or Limited Partnership is formed and it is available for investment.

A nice feature of this is that you do not have to show that you are creating 10 jobs or that you are managing this operation on a day-to-day basis. You can depend on what is called a job multiplier, which allows you to meet the requirements. With some of these, your investment can end when you have received your Green Card. Different Regional Centers can have different investment periods.

TROUBLED BUSINESS

If you are investing in a business that has suffered a net loss for the last 1 or 2 years, where it exceeds 20% of the company’s net worth, then you can get away with not creating new jobs and just maintaining the current ones.

FAMILY

The case can provide entry for yourself, your spouse, and any children, who are defined as being under 21.

INVESTMENT GIFTS

Yes, you can receive a gift of money and make an investment with that gift. However, if gift taxes are applicable you must pay them.