America is frequently referred to as the land of opportunity. People from many different countries have come to America for a better life in large part because laws in America allow those with an entrepreneurial and hardworking spirit to earn enough money for a comfortable lifestyle. Congress created the EB5 immigrant investor category in recognition of the fact that the contributions of entrepreneurs and investors continue to be important to the U.S. economy and the U.S. job market. The EB5 program offers green cards to immigrant investors who invest at least $1,000,000 in a new, job-creating commercial enterprise in the U.S. While the EB5 program offers a good opportunity for immigrants with the money to invest and a desire to live in the U.S. on a permanent basis, the application process requires a lot of evidence to be prove eligibility for an investor visa.
The initial application for an EB5 investor visa requires that the immigrant investor provide the following documentation:
- A detailed business plan for the new business enterprise, including articles of incorporation, certificates of merger and consolidation, partnership agreements, and any other evidence of the validity of the business enterprise.
- If a business license or other authorization to do business is required, the immigrant investor will need to provide a copy of that license.
- Evidence that the required investment has been made in the new enterprise.
- If an intending immigrant is investing in an existing business, the immigrant must submit evidence that the required investment has been transferred to the business after November 29, 1990, and that the investment has increased the new worth of the business or the number of employees by at least 40%.
As mentioned above, an immigrant must invest $1,000,000 in the enterprise to qualify for EB5 status. However, if the immigrant investor invests in a high unemployment area or a targeted employment area the required investment is only $500,000. Any required investment that an immigrant investor makes under this program to qualify for an EB5 immigrant investor visa must be fully at risk. Some ways that an immigrant investor can demonstrate that the required investment is at risk include:
- Bank statements showing deposits in the U.S. account of the enterprise.
- Evidence of assets purchased for use in the enterprise.
- Evidence of property transferred from abroad for use in the U.S. enterprise.
- Evidence of funds invested in the enterprise in exchange for stock, except for stock redeemable at the holder's request.
- Evidence of debts secured by the investor's assets and for which the investor is personally and primarily liable.
- Evidence that the required investment has been spent on creating new jobs.
EB5 regulations also require that the investment in the enterprise be acquired by the immigrant investor through lawful means. Any funds acquired through unlawful means cannot be used to meet the required investment amount for the EB5 category. For instance, the USCIS will not count money gained through criminal activity such as drug dealing as legitimate funds used toward the investment. Any money illegally earned by the immigrant while in the U.S. cannot be counted toward the required investment amount either. An immigrant investor will must provide evidence that the required funds were obtained lawfully. Evidence of funds were obtained lawfully might include:
- Foreign tax filings for the investor.
- Personnel bank account records for the investor.
- Any other documentation identifying the lawful source or origin of the required investment.
In addition to making the required investment, an immigrant investor must be involved in managing the business venture that is being used to qualify for the immigrant visa. The immigrant investor will need to submit documentation to support the claim that they are managing the enterprise. Such evidence can include:
- A comprehensive job description and title for the position occupied by the investor.
- Evidence that the petitioner is a corporate officer or on the board of directors.
- Evidence that the petitioner is involved in direct management activities or policy-making activities of a general or limited partnership. Merely calling the investor a limited partner will not qualify them for an EB5 investor visa if the immigrant is not involved in managing the enterprise or making policy decisions.
As stated above, EB5 regulations mandate that the required investment create 10 U.S. jobs. If the required employees have been hired, the immigrant investor can easily document these those employees have been hired by providing I-9 records. EB5 regulations do not allow an immigrant investor to use spouse or children as employees that count towards the required 10 jobs. Also, employees of the enterprise in some nonimmigrant status H-1B, L-1, E-2 do not count toward the required 10 jobs for EB5 purposes. However, the required jobs do not need to be created at the same time as the initial investment in the enterprise is made. The required 10 jobs need to be created within a 2 year time period after the initial application for an EB5 investor visa. An immigrant investor can document that need for at least 10 additional employees in the next 2 years by submitting a valid business plans that clearly describes the need for the employees.
Even if an investor has the required investment and can document the need for 10 new employees in the next 2 years, an EB5 business enterprise must still be for the benefit of the U.S. economy. This concept of benefitting the U.S. is not clearly defined in EB5 regulations. However, those businesses which provide goods and services for the U.S. market will likely have an easier time proving their benefit to the U.S. economy than a company that provides market research in the U.S. on behalf of foreign companies. As the concept of benefitting the U.S. is somewhat subjective, immigrant investors are advised to consult with a competent Maryland investor visa attorney to see if there business plan and proposed investment will meet the requirements of the EB5 program.
After the initial EB5 application is filed and approved by USCIS, the immigrant investor will be given 2 year conditional permanent resident status. About two months before the initial 2 year period is about to expire, the immigrant investor must apply to remove the conditions on their permanent resident status. At the time of applying to remove the conditions, the immigrant investor must document that they invested or were in the process of investing the required capital, and that the investment created or will create 10 full-time jobs.
Although 10,000 immigrant visas are available under the EB5 program, only about 1,000 available visas at most are used each year. This is due to the fact that the EB5 program incurs a great deal of scrutiny by USCIS officers who adjudicate such petitions, as well as the difficulty in documenting that the required investment is truly as risk. If an intending immigrant feels that they will not be able to meet the stringent requirements of the EB5 immigrant investor program, they may wish to consider other visa options for coming to the U.S. including L-1 intercompany transferee visas, E-2 treaty visas, and multinational executive/manager immigrant visas. Whatever option a prospective investor wants to use to come to the U.S., an intending investor in the U.S. is strongly advised to consult with a Maryland investor visa attorney to ensure that their business plan is a solid one that meets the requirements of the visa program that they are using to come to the U.S.