Employment-based Preference Category EB-5 Immigrant Investor Visas
What is an EB-5 Visa?
EB-5 is an immigrant investor visa category created in 1990 for foreign nationals who invest in a new commercial enterprise that will benefit the U.S. economy and create at least 10 full-time jobs. The name comes from the fact that this visa is the 5th category of employment based (EB) visas. Ten thousand visas are set aside annually for investors and their immediate family members under the EB-5 visa program. An EB-5 applicant will receive a visa for himself or herself, his or her spouse, and all of their children under the age of 21.
In the first three quarters of fiscal 2011, over 70% of all EB-5 investors have come from mainland China.
The U.S. Citizenship and Immigration Services ("USCIS") will make a determination and issue a conditional visa within six months of filing by an EB-5 investor, as long as the investor and the project they invest in are qualified. If the investment project fulfills the job creation criteria after a period of two years, the investor can obtain permanent resident status. The investor can apply for U.S. citizenship in five years. This makes the EB-5 program a very attractive means of obtaining a U.S. visa for foreign investors.
Basic Criteria Required for an EB-5 Visa
In order to qualify for an EB-5 Visa, an investor must invest at least $1,000,000, or $500,000 for a project in a "targeted employment area" (as discussed below), in an enterprise that will create at least 10 new full-time jobs for U.S. citizens and legal residents. The entire amount invested by the EB-5 investor must be invested in the business within two years, and all fees must be paid from other funds of the investor.
Almost all EB-5 investors will want to invest at the $500,000 level, which means that an investor will have to have a project in a "targeted employment area."
If the project is an existing business, the 10 new jobs have to be in addition to the existing jobs in the business. The investor usually purchases a limited partnership interest in a limited partnership made up of multiple investors seeking EB-5 visas. Limited partnerships are usually used, because EB-5 regulations require the EB-5 investor to control the business, unless the investor is a limited partner in the business. Each limited partnership generally invests in a single project, either as an equity investor in or a lender to a special purpose entity established for the project.
The jobs requirement must be met by the direct employment of at least 10 full-time employees for each EB-5 investor, unless the project is part of an approved Regional Center, in which case both direct and indirect job creation within the designated geographic area of the Regional Center will be counted. Approximately 90% to 95% of all EB-5 visa investments are made through Regional Centers.
What is a Regional Center?
A Regional Center is an entity created by either a public or private group to sponsor projects for EB-5 investors. There are currently about 150 approved Regional Centers, but many more applications are pending with the USCIS and are expected to be approved if their business plans are considered feasible and meet the job creation criteria. According to the trade association IIUSA, Regional Centers have invested over $2.0 billion of foreign capital, creating over 50,000 jobs in the U.S.
Approximately 90% to 95% of all EB-5 visa investments are made through Regional Centers.
Any business owner can create their own Regional Center for one or more projects within a designated geographic area, but it currently takes at least nine months for the USCIS to approve each application. However, the USCIS has issued a proposal to provide "premium processing" for Regional Centers for projects which are ready.
When premium processing is made available, it will take only a few weeks to obtain approval for a Regional Center - provided that it has a solid and sufficiently detailed business plan that shows what projects will be undertaken, what the costs will be and what direct and indirect jobs will be created as a result of the Regional Center's projects.
EB-5 investors can come from any country outside the U.S., and can even include people who are in the U.S. legally under a temporary visa. In the first three quarters of fiscal 2011, over 70% of all EB-5 investors have come from mainland China. There is a well developed network of brokers and licensed emigration agents in China who work with U.S. business owners to raise financing for EB-5 projects, usually through seminars attended by individual Chinese investors in cities throughout China.
What is a Targeted Employment Area?
A targeted employment area is any city, county, census tract or other geographical area accepted by the USCIS that has an unemployment rate over 150% of the national average rate, or a "rural area." A rural area is an area outside a metropolitan statistical area or outer boundary of any city or town having a population of 20,000 or more. Since most EB-5 investors are looking for investments at the $500,000 level, this means that for purposes of finding investors, a project will generally need to be located in one of these targeted employment areas.
Requirements of the EB-5 visa for Entrepreneurs and Investors
• Net worth of $1 million, or high annual income
• Minimum investment of $500,000
• Associated costs almost $50,000, including:
• Legal fees vary according to the work involved.
• The EB5 visa filing fee, payable to the USCIS, is $1,500.00 per applicant family.
• The visa fee to the NVC (National Visa Center) is $404.00 per family member.
• Medical examinations vary from country to country, but can be about $320 for each
• Birth certificates
• Marriage certificate
• Police Record check
• No previous US immigration violations
•Detailed documentation for source of funds