EB-5 Immigrant Investor visas are among the most interesting of all business-focused visas. Unlike the E-2 investor visa which requires a treaty of foreign commerce and friendship between the U.S. and foreign national's home country, the EB-5 enables people from any country (including China, India, Brazil, Russia and Venezuela) to immigrate to the U.S. provided they have the required funds to invest here in a business enterprise to create jobs in America and stimulate the American economy.
Permanent residence is permissible for investors who invest in a commercial enterprise that will benefit the U.S. economy and create at least 10 full-time job
The EB-5 program grants two-year conditional visas to individuals seeking permanent residence based on their involvement in a new commercial enterprise. These visas are also available for the investors' immediate family members. Investors can qualify for an EB-5 visa in three ways:
About 10,000 visas are set aside annually for the EB-5 program, with 3,000 of these reserved for the Immigrant Investor Pilot Program. (8 U.S.C. 1153 (b)(5)).Elements of EB-5 Visas:
Regional center program:
Under this program, foreign investors who invest $500,000 or more in economically challenged U.S. regions qualify for immediate immigration to the U.S. together with their families. They will be issued conditional green cards that are valid for two years and eligible to have the conditions removed at the of the two year period if all requirements are met. Review the list of Regional Centers.How to Evaluate a Regional Center?
When was the company granted USCIS Regional Center Designation?
In 2002 USCIS imposed stricter requirements on existing regional centers and new regional center applications. To maintain their designation and to continue operations, centers approved in the 1990s , were required to reapply to USCIS and demonstrate that they met the new requirements. Often referred to as a "re designation," some of the older regional centers successfully showed they met the new requirements and were approved after 2002.
How many investors have received I-526 petition approvals?
In the Designation Regional Center setting, I-526 petition approvals show that the specific investment used by the investor meets the requirements of the EB-5 visa. Regional Center Designation by itself does not satisfy these requirements. Regional centers with a history of many I-526 approvals have more experience working with USCIS and often a better understanding of what is required for the investors to receive them.
Does the regional center have any investors with an approved I-829 Removal of Conditions?
Each I-829 Removal of Conditions petition approval is a key indicator of the quality of the EB-5 investment, the viability of the business enterprise, the strength of its executives and managers, the soundness of the business and employment plan, and the capabilities of the regional center and its staff. Regional centers that have I-829 petition approvals have been in business longer and their investment programs have been proven to produce results that meet the requirements for unconditional permanent residency. Further, at the I-829 Removal of Conditions step, a regional center’s familiarity with Service Center expectations is extremely valuable.
Does the investor have to pay the regional center an upfront administrative fee or subscription fee?
Most regional centers charge investors a fee to participate in their investments. Often referred to as administrative, syndication, or subscription fees, these charges may or may not cover attorney fees or USCIS application fees for preparing and processing various visa applications. In some cases this fee is the only source of income for the regional center. When considering alternative investments, it is important to know the fees, what they cover, and what other costs the investor will have to pay. In many cases, once the fee is paid the regional center has no further financial interest in the final outcome of the EB-5 qualifying investment. Fees of this sort should not be confused with deposits required by some regional centers to pay for services rendered on behalf of the investor such as legal fees and USCIS filing fees.
Does the regional center sponsor have a track record of business success?
Regardless of the visa benefit, EB-5 investments are real businesses with large amounts of capital at risk. To earn profits, avoid losses, and meet the objectives of the business plan, these projects require experienced management and executive leadership by seasoned businesspeople. This essential ingredient is missing in some EB-5 investments managed by people who have no experience in the business of the enterprise and in some cases, have no experience successfully running businesses at all.
Do investments sponsored by the regional center fit the ‘at-risk’ description outlined in the EB-5 precedent case decision Matter of Izummi?
Matter of Izummi describes the requirements to qualify an EB-5 investment as truly ‘at risk.’ Matter of Izummi states:
“An investment assumes that a risk exists. The alien must go into the investment not knowing for sure if he will be able to sell his interest at all after he obtains his unconditional permanent resident status; and if he is successful in selling his interest, the sale price may be disappointingly low (or surprisingly high and more than what he paid). This way the alien risks both gain and loss. To allow otherwise transforms the arrangement into a loan.”
There has been a recent resurgence of investment models that are structured very similar to a loan. In these circumstances, the manner by which the funds go to the enterprise looks like a loan, pays interest like a loan, and is repaid like a loan. However, any type of redemption agreement or guaranteed return of capital is expressly prohibited for those seeking permanent residency through the EB-5 investor visa category. To offer such a guarantee would violate the “at risk” requirement and greatly jeopardize the applicant’s immigration process.
How does the regional center, or the investment entity, protect its investors from investment risk?
EB-5 investments have 2 risks. One deals with visa qualification. The other is the loss of the investment. Some regional centers may not have the experience or the resources necessary to manage these risks and meet their investors’ immigration and investment expectations. Experienced, well-conceived regional centers manage the EB-5 visa process and oversee the investor’s interest in the business enterprise.
What is the projected exit event?
The exit event describes the time and circumstances of the return of the investment. Not all regional centers have a clearly defined exit event that, upon close analysis, exhibits a high probability of actually occurring. A full understanding of if or how the investment will be returned and when this will occur is essential to making a well informed decision to invest in a regional center or program.
Where is the EB-5 project located?
The location of the project should accommodate the specific needs of the business enterprise. Factors such as facility requirements, availability of an appropriately skilled workforce, access to suppliers, and convenience for consumers, should all be considered.
Is the regional center sponsor physically located within the regional center’s area of operation?
Projects located near the offices of a regional center provide convenient access for prospective investors to complete their due diligence of the investment. Proximity to their projects also allows a regional center frequent and routine oversight and management of the investment on behalf of the investor. This also enables the principals of the center, and the managers of the business enterprise, to respond quickly to questions or concerns of investors.
Is it possible to tour the project location with a regional center representative?
more than 85 regional centers scattered throughout the U.S., it can be very
difficult to assess them and the projects they promote. A site visit to the project provides an
efficient way to evaluate the regional center and the quality of their
investments by having a face-to-face meeting with the principals of the center
and key executives of the projects.