EB-5 visas are an increasingly popular way for foreign born individuals to gain entry to the United States through investment in the United States economy. This article, guest written by Winter Haven, Florida immigration attorney Renee Pobjecky, explains how the EB-5 works. It provides knowledge to U.S. immigrants considered an EB-5 visa, as well as to businesses that are exploring the use of EB-5?s for raising investment capital.
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By Attorney Renee Pobjecky
Special to THELAW.TV
The EB-5 investment visa program is rapidly growing in popularity as an alternative to visas with stringent requirements. It is also a popular visa considering the strength of the Euro against the U.S. Dollar. It is an opportunity to obtain lawful permanent resident status (green card) through investment.
The EB-5 visa was enacted by Congress to stimulate the U.S. economy through job creation and capital investment by foreign investors. Each year, 10,000 immigrant visas are available and, of those, 5,000 are set aside for those who apply under a pilot program involving a USCIS-designated regional center. To date, there has been no shortage of the immigrant visas in a given year. The EB-5 visa grants a green card to investors, their spouse, and unmarried children. The minimum qualifying investment is $1 million or $500,000 in a Targeted Employment Area (High Unemployment or Rural Area).
Applicants have the option of choosing between an individual EB-5 program and a Regional Center. A regional center is an entity, organization, or agency that has been approved as such by USCIS, focuses on a specific geographic area within the United States, and seeks to promote economic growth through increased export sales, improved regional productivity, job creation, or increased domestic capital investment resulting from the pilot program.
Foreign investors who chose to invest through a regional center must demonstrate that a "qualified investor" is being made in a new commercial enterprise located with an approved regional center, and show that 10 or more jobs are actually created either directly or indirectly by the new commercial enterprise through revenues from increased exports, improved regional productivity, job creation, or increased domestic capital investment resulting from the pilot program.
The prudent investor MUST learn everything he or she can about a regional center. The investor must inquire about a regional center's track record. The initial EB-5 visa is granted on a two-year conditional basis. In order to remove the conditions, the investor must prove that the new commercial enterprise has been established, the proper amount of capital is at risk, the capital investment was lawfully gained, the investment has created at least 10 full-time jobs, the investor intends to stay in the U.S., and the investor will be engaged in the management of the enterprise.
Upon approval of the immigrant petition, the applicant receives conditional resident status for two years and, prior to the end of the initial two-year period, must apply to remove the conditions. The application is filed with supporting documentation that clearly demonstrates that the individual's investment meets all requirements, such as establishing a new commercial enterprise, investing the requisite capital amount, proving the investment comes from a lawful source of funds, creating the requisite number of jobs, demonstrating that the investor is actively participating in the business, and, where applicable, creating employment within a targeted employment area.
The minimum investment must be irrevocably committed to an escrow agent bank in the foreign national's own country in order for USCIS to recognize that the foreign investor is in the process of investing. The investor must prove that the funds were not obtained through illegal means but they may be gifted to the investor.
There are many differences between an individual EB-5 program and regional centers. The investor in the regular EB-5 Program must invest $1 million, unless the investment project is in a "targeted employment area," in which case the minimum investment amount is $500,000. In addition, the investor will need to be actively involved in the day-to-day management of the enterprise. Finally, the investor's $1 million investment must create 10 direct jobs. The application must provide proof that the jobs — for U.S. workers only — are full-time, with a minimum of 35 hours per week.
For a regional center, the investment amounts are the same, but the investor does not need to be actively involved in the day-to-day management of the enterprise. Often the regional centers will have attractive takeout strategies to enable the investor's money to be returned in four or five years.
There are many risks and the prudent investor must ask: "What if the regional center project fails to create enough jobs to cover all investors in the project? Who wins and who loses?" Some investors will be covered and other will not. Additional questions are "What if the investment project itself fails and there are no jobs and no money to return to investors? Do the investors have security?"
This is a very brief summary of the EB-5 visa process and it is imperative that you review all of the requirements of this particular visa before submitting your application. More information can be found at www.uscis.gov or by visiting our law firm's website at www.pobjeckylaw.net.
The author, A. Renee Pobjecky, is a business immigration lawyer at Pobjecky & Pobjecky, LLP in Winter Haven, Florida.