Media

The EB-5 Immigrant Investor Program is a United States government immigration program that was created in 1990 by Congress with the aim of incentivizing foreign investment in the U.S. economy in exchange for U.S. residency and Green Cards. With an investment of $800,000, foreign investors can receive Green Cards for themselves and their qualifying dependents, including their spouses and children under the age of 21.

The key requirements of the EB-5 program for foreign investors are as follows:

1. The investor must invest the required amount;
2. The investment must be in a new commercial enterprise;
3. The source and path of funds used for the investment must be lawful;
4. The investment must be “at risk”; and
5. The investment must create or maintain at least ten full-time jobs for U.S. persons.

1. Required Investment Amount

Foreign investors are required to invest the prescribed minimum investment amount, which varies depending on the location of the commercial enterprise in which the EB-5 applicant invests. The minimum investment amount in a Targeted Employment Area (TEA) is $800,000 and $1,050,000 in an area that is not considered a TEA. In simple terms, a TEA is a high unemployment area.

2. New Commercial Enterprise

The investment must be in a new commercial enterprise (NCE). By applying for the EB-5 program through the regional center route, the burden of proving that the chosen project qualifies as an NCE is lifted from the investor and placed onto the regional center. A regional center is an economic unit designated by the United States Citizenship and Immigration Services (USCIS) with the goal of promoting economic growth in the United States. Regional centers pool EB-5 investors’ funds to loan funds to developers for construction of a real estate project. A regional center is responsible for drafting a business plan, obtaining all necessary approvals from USCIS, establishing an NCE, creating the required jobs, and managing the funds and the business.

3. Lawful Source and Path of Funds

One of the principal requirements of the EB-5 program is that both the source and path of funds used for the investment must be lawful. Accordingly, USCIS requires proof of the lawfulness of funds as part of the EB-5 application of a foreign investor. The list of documentation required to be submitted to USCIS along with the I-526E petition of an EB-5 investor depends on their source of funds. Generally, for a salaried employee, the list includes but is not limited to bank statements, salary certificates, bonus letters, and employment contracts. For business owners, the list includes but is not limited to company bank statements, organizing documents such as articles of association, audited financial statements, company brochure, trade license, and distribution statements. The investor must also provide evidence of the lawfulness of the path of funds. This requires tracing of the funds from the original source all the way to the transfer to the project escrow account.

4. At Risk Investment

Another key requirement of the EB-5 program is that a “true investment” must take place, which according to relevant EB-5 statutes is defined as an investment that is “at risk” without guarantees or redemption rights. Although the investment must be “at risk,” there are certain steps that an investor may take to mitigate their risks, including by choosing a reputable regional center to work with for their EB-5 investment. An investor must carefully consider various aspects of an EB-5 project prior to making the decision to invest. It is crucial to ensure that the EB-5 project meets the requirements of USCIS.

5. Job Creation

A further requirement of the EB-5 program is that each EB-5 investor must create and maintain at least ten full-time jobs for qualifying employees with their investment in the United States. The job creation requirements differ depending on whether the investor is applying directly or through a regional center. In a direct investment, an investor must directly create ten full-time positions. In a regional center investment, the new commercial enterprise can directly or indirectly create the required jobs, out of which up to 90% may be indirect and 10% must be direct jobs.

Applying for the EB-5 program through the regional center route is beneficial to foreign investors as they can rest assured that if they work with a seasoned and reputable regional center, the job creation requirements will be satisfied on their behalf, which translates into less hassle and burden for the investor.

If you are interested in learning more about the EB-5 program requirements, you can reach out to our team of U.S. licensed lawyers and professionals for assistance. We offer a free initial consultation to discuss your needs and questions.