Five Requirements to Receive an EB-5 Visa

Applying for an EB-5 investor visa is one way to become a permanent resident of the United States. In this article we list the five main requirements for receiving an EB-5 visa.

Applying for an EB-5 investor visa is one way to become a permanent resident of the United States. However, this option isn’t open to everyone. In order to qualify for an EB-5 visa, you must be able to invest a large amount of capital into a job-creating, U.S.-based business. You will also need to take an active role in that business for at least two years. In this article we list the five main requirements for receiving an EB-5 visa.

Note that once you obtain an EB-5 visa, USCIS will also grant visas to your spouse and any children under the age of 21. Children over 21 will have to apply for visas on their own.

Country of Origin Requirements

Unlike an E-2 visa, there is no country of origin requirement for an EB-5 visa. This means that individuals from any country can apply for an EB-5 visa, assuming that they fulfill the other criteria (listed below).

That being said, the United States Citizenship and Immigration Services (USCIS) does put a limit on the number of EB-5 visas granted to each country per year. This means that individuals from countries with many EB-5 applicants, such as China, may have to wait several years before their application can be processed. If you are unsure how long your application will take, you can always check on the USCIS website’s processing time page for an estimate.

The Investment Requirement

The main requirement for an EB-5 visa is that you must invest a significant amount of money in a US for-profit enterprise. The exact amount depends on the enterprise’s location. Most locations require an investment of $1,000,000, but enterprises in designated targeted employment areas (TEAs) only require a $500,000 investment.

Rather than starting their own business or investing in an existing interprise, the vast majority of EB-5 applicants invest with an EB-5 Regional Center. This is an investment corporation that connects EB-5 applicants to investment opportunities. Compared to direct investment in an enterprise, investing with a Regional Center usually offers a safer, less expensive option.

In addition, investing with a Regional Center tends to make both the employment and the active involvement requirements easier to fulfill. We’ll talk more about those requirements in their own sections.

Verifying the Source of Your Funds

You’ll also need to verify that the funds you invested have come from a legitimate source. In the case of an EB-5 visa, that can mean a loan, salary, gift, or any similar source. What’s important is that the funds must belong to you alone. Shared investments are not considered valid for the purpose of applying for an EB-5 visa.

While you may take out loans for the purpose of this investment, note that you cannot use your commercial enterprise as collateral. Likewise, mortgages on assets connected to the enterprise cannot count toward the investment requirement. Finally, you must be solely responsible for any funds you borrow.

The Employment Requirement

USCIS requires that you create at least ten permanent full-time positions within two years of receiving your provisional visa. Note that this doesn’t include the employment positions of the investor’s spouse or children.

In addition, the employees filling these positions must be eligible to work in the U.S. indefinitely. Temporary green card holders are also not eligible.

Of course, you don’t have to hire those employees immediately. Instead, USCIS requires a business plan showing that you plan on hiring ten full-time employees within two years. Should you fail to do so, USCIS may revoke your visa at the end of the period.

Regional Centers and Indirect Job Creation

Normally, only jobs you create directly through your investment count for EB-5 purposes. However, investors in an EB-5 Regional Center can benefit from indirect job creation. These are jobs created as a result of the Regional Center’s economic development in a community. Benefiting from these “collateral jobs” is one of the biggest advantages to investing with a Regional Center.

Job Maintenance

The job creation requirements are significantly lessened for investors in a troubled business. For the purposes of EB-5 visa eligibility, a troubled business is one experiencing a period of decline in net worth lasting two or more years. The business’s net worth must have fallen at least 20% during this period.

Should you invest in such a business, you only need to maintain employment at pre-investment levels. However, your business still needs to employ at least ten full-time employees. Therefore, an investor in a troubled business with nine full-time employees only needs to create a single job from his or her investment.

The Active Management Requirement

In order to qualify for an EB-5 visa, you must also be actively involved in the management of your investment. The meaning of this requirement is somewhat vague, and USCIS interprets it differently in different cases. In most cases, however, “active management” means that you must be at least a limited partner in the business.

This requirement presents something of an obstacle for many EB-5 applicants, as it significantly restricts their time and mobility. In addition, many EB-5 applicants would prefer not to run a business personally. Fortunately, investing with a Regional Center makes this requirement easier to fill.

Most Regional Centers designate their investors as limited partners. While this type of limited partnership comes with considerable responsibility, the Regional Center will limit your involvement in day to day business affairs.

The New Commercial Enterprise Requirement

Most EB-5 applicants prefer to start an entirely new business; however, some applicants choose to invest in an existing business. In most cases, this distinction is unimportant. However, if you are investing in a business created before November 29, 1990, you’ll probably need to reorganize the business extensively. You’ll have to show a 40% increase in either the company’s net worth or total employment if you invest in an older business.

Conclusion

If you can afford to invest $500,000 to $1,000,000 in a U.S. based company, you can very likely qualify for permanent residency in the United States with an EB-5 visa. However, there are quite a few decisions to make and requirements to meet along the way. It’s important to consult an experienced immigration lawyer when making these decisions. Otherwise, you could end up wasting time and money.

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