How does an EB-5 Investor Visa work?

The amount of money needed under the EB-5 Investor Visa Program, ranges from $500,000 to $1,000,000 depending upon the economic area. For example, a business located in a “targeted employment area “ where there is high unemployment, will require only $500,000 investment. For example, within Miami, Florida, there are TEAs where unemployment is high, and an initial investment of $500,000 is required. There are also areas that have low unemployment, and have long track records for maintaining employment satisfactorily.

Busy metropolitan business districts usually require an investment of at least $1,000,000 for an EB-5. In either case, an additional $50,000 (approximately) is required to help cover administrative costs. Many professionals are involved in creating this investment from attorneys, to accountants, and other consulting professionals. The center must be structured to promote economic growth, and enhance job creation and spur capital investment. An example of a regional center, or an indirect investment, is where a large investment is required to develop and construct a project involving millions of dollars, collectively. Developers of large-scale construction projects, or business enterprises, rely on regional centers to finance their projects.

The developers secure profitability not only for themselves, but for all the direct investors that are investing in the project not only to see a satisfactory return on their money, but to generate for themselves, and their families , legal U.S. residence. The residence, provided all has been filed properly, leads to U.S. citizenship. The EB-5. visa is a rare opportunity, and a window that is currently open. Investors with the interest in investing, the ability to invest, and the goal of securing legal residence for their families, should move forward with this type of investment. Already, the “cap” is fast approaching as this investment has become extremely popular in the past few years.

An investment in a regional center is an investment “under” a regional center. The center is responsible for the care and direction of the investment. Within the regional center are usually, individual projects. As investor, you decide which project you would like to invest. For example, a regional center may have various projects ranging from hotel development, condo creation, commercial property development, and many other projects. All fall within the care and management of the regional center.

The EB-5. investment, through a regional center, relies upon job creation. Without the investors’ investment dollars transiting to an investment, with the ability to create an on-going profitable business entity that creates employment, no job creation will materialize, and the investment will no longer serve the purpose of the EB-5. guidelines. How many jobs are needed? Ten jobs for U.S. workers, or those that have the legal right to work in the United States, must be created. The investment management will seek more than ten jobs as a surplus. Through a regional center, the center, not the investor, is responsible for creating the jobs. The Center is responsible for the project, its revenue stream, not the investor. The investor has made a major contribution of much needed growth capital and is not responsible for maintaining the operations of the investment.

As most investments are made through regional centers because of this convenience, there is still a group of investors that prefer to act as entrepreneurs and start their own business in the U.S. Businesses such as hotel, where the investor is responsible for making sure 10 jobs are created, for making certain that the business is profitable and maintains profitability.

Regional centers are responsible for understanding the immigration legal aspect of your investment and following USCIS regulations. Which ensures that your investment actually qualifies you legal residence through EB-5. The regional center will interact with a team of industry professionals in EB-5.

• Economists
• Immigration attorneys, U.S. Securities attorneys, Business plan writers
• Accountants

All EB-5 investors must invest in a new commercial enterprise, which is a commercial enterprise:

• Established after Nov. 29, 1990, or
• Established on or before Nov. 29, 1990, that is: 1. Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or 2. Expanded through the investment so that a 40-percent increase in the net worth or number of employees occurs

Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to:

• A sole proprietorship
• Partnership (whether limited or general)
• Holding company
• Joint venture
• Corporation
• Business trust or other entity, which may be publicly or privately owned

Main EB-5 Visa requirement: All investment money must be “at risk”. Which means the investor could lose a part of whole of his investment, if the investment fails.

What is required to begin the process:

• An investment of $500,000 (if the area is a TEA) or $1,000,000. The money must be at risk.
• The money, must be shown, is from a lawful source. This requires statements and affidavits from bank officials, among others, showing the money is legitimate.
• The investment must be expected to create 10 jobs for U.S. workers. The time period for such creation is two years.
• The investor, must be in some form of “management position” or “policy making” position, within the business. In this particular business, policy making is emphasized, rather than day-to-day operations.

Who can apply for the EB-5? Who is qualified?

• Investor must pass a background check. No criminal background
• Investor must not have previously violated immigration laws.
• Investor ability to make the investment of either $500,000 or $1,000,000
• The money comes from legitimate sources.

Where can the money come from?

• Family and friends
• Sale of real or investment property
• Profits from a business
• A loan
• On-going salary

What information is required for the EB-5 visa?

• Foreign business registration records
• Tax Returns

Note: The investment money is to be paid before the immigration application (I-526) is filed. Escrow accounts are used to properly track your investment dollars. Once the terms of the contract are met, the money is taken out of escrow and invested with the regional center. The “offering documents” will address specifically when the money will be used. It may be used before the immigration application is approved. Fees required, there is an administrative fee of approximately $50,000 for the regional center (regardless if the initial investment is $500,000 or $1,000,000). As there is a mountain of paperwork and time required to complete this process, the immigration attorney charges a separate fee, which ranges from $28,000 to $32,000 depending on the individual client and the complexity of the work involved. There are also other EB-5 visa fees included; the I-526 fee, which is $1,500, I-485, $985, and an I-829 fee, $3,750.

Note: There is no guarantee that the EB-5 visa petition will be approved. There is no guarantee that the investment money will generate a return, or that the investor will receive a part or any of it back in the future. The money is at risk, the investment has inherent risk, and it is possible to lose all investment dollars. It is possible that the investment will work out well, but the application is denied. Also possible, is that the EB-5 visa petition is approved, but the investment fails. The investor must expect the possibilities of different outcomes.

Safe return of the investment is of top importance. The usual time frame for return of capital is between five and seven years.

The First step for the EB-5 visa; is filing the I-924 application with USCIS to receive an approval of the EB-5 visa regional center. This takes about one year, to one and a half years to get approved. Once approved, investors may begin to file their I-526 petitions with USCIS. Marketing may begin before the I-924 is approved, however, no applications by the individual investors may be filed until the I-924 is approved.

Thank you for your interest. The EB-5 is a complex visa, and summarizing all the details is difficult. I have presented an overview for your benefit. Of course, you can call me anytime with specific questions. I can be reached at 305-491-3866 or immigration@bellsouth.net

Job Creation Requirements

• Create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years (or under certain circumstances, within a reasonable time after the two-year period) of the immigrant investor’s admission to the United States as a Conditional Permanent Resident.
• Create or preserve either direct or indirect jobs:
  • Direct jobs are actual identifiable jobs for qualified employees located within the commercial enterprise into which the EB-5 investor has directly invested his or her capital.
  • Indirect jobs are those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor. A foreign investor may only use the indirect job calculation if affiliated with a regional center.

Note: Investors may only be credited with preserving jobs in a troubled business.

A troubled business is an enterprise that has been in existence for at least two years and has incurred a net loss during the 12- or 24-month period prior to the priority date on the immigrant investor’s Form I-526. The loss for this period must be at least 20 percent of the troubled business’ net worth prior to the loss. For purposes of determining whether the troubled business has been in existence for two years.

A qualified employee is a U.S. citizen, permanent resident or other immigrant authorized to work in the United States. The individual may be a conditional resident, an asylee, a refugee, or a person residing in the United States under suspension of deportation.

Full-time employment means employment of a qualifying employee by the new commercial enterprise in a position that requires a minimum of 35 working hours per week. In the case of the Immigrant Investor Pilot Program, “full-time employment” also means employment of a qualifying employee in a position that has been created indirectly from investments associated with the Pilot Program.