EB-5 direct investment
For the experienced entrepreneur, a direct investment in a new commercial enterprise can be a profitable way to become a permanent resident of the United States. EB-5 direct investors are required to invest a minimum of $ 1,800,000.00 in a new commercial enterprise. However, if the EB-5 investment is in an employment area or rural area (TEA), it will qualify for a reduced threshold of $ 900,000.00. Permanent residence through the EB-5 program is divided into two stages , petition i-526 and the request for the elimination of conditions I-829. The EB-5 investor must meet certain criteria at each stage of the petition.
Upon submission of the first petition I-526, the investor must meet four key requirements;
- Invest in a new commercial company.
- Demonstrate the legitimate source of the EB-5 investment amount.
- Show that the investment is “at risk”.
- Verify that the funds are in the process of being invested.
Once the four criteria above are met, the EB-5 investor and his spouse and children under 21 can receive conditional permanent residence in the United States for a period of 2 years. 90 days before the conditional permanent residence is fulfilled, petition I-829 will be submitted to remove the conditions. At this stage, the EB-5 investor must meet two other key requirements; (1) show that your investment created 10 full-time jobs; and (2) verify that the required amount of capital has been fully invested. Once the EB-5 investor proves that he has met the criteria, he or she and any dependents of the accompanying family can receive permanent residence in the United States.
A new trading company
A “new business enterprise” is defined as any “for-profit” entity that includes partnerships, “holdings”, strategic alliances (better known as “joint venture”), sole proprietorships, corporations, business trusts or other property entities public or private An investment in a holding company may qualify, provided that its wholly owned subsidiaries are actively involved in legitimate for-profit businesses. Typically, EB-5 investors invest in a company started after November 29, 1990, as defined by USCIS, although the EB-5 investor may also invest in a business established before that date in cases of extension or of substantial restructuring.
Note: Owning a personal residence is considered a non-commercial activity and will not qualify for the EB-5 investor program.
The EB-5 investor must not only invest in a qualified commercial company, but is also obliged to maintain a management and decision-making position, as well as actively participate in the daily activities of the business. A person who wishes to participate in the EB-5 program and who is not required to manage the daily activities of the commercial enterprise should consider the investment under the pilot program of regional EB-5 centers. Otherwise, the regulations established by the USCIS expect the EB-5 investor to be a manager both in title and in practice.
$ 1,800,000.00 USD Investor Visa
To qualify for the EB-5 visa, an EB-5 investor may choose to invest $ 1,800,000.00 USD in a new business enterprise in the form of cash, equipment, inventory or other tangible property. In addition, EB-5 investors must create 10 new full-time jobs for US citizens or legitimate permanent residents (not including the investor and his immediate family). These works must be created directly as a result of the investment. The only exception to this requirement is if the company is considered a “problematic business”, experiencing a net loss for one or two years of more than 20% of its net worth and, therefore, in which case the EB-5 investor You can also count jobs that have been saved by your EB-5 capital investment.
$ 900,000.00 USD Investor Visa
EB-5 investors can invest under a reduced threshold of $ 900,000.00 as long as the EB-5 investment is in a “targeted employment area” (TEA) or in a rural area. The evaluation of whether the EB-5 investment is in a targeted employment area is based on statistical information related to the investment time, and is based on the location in which the company is primarily doing business. The area of targeted employment is defined as an area that experiences high unemployment (at least 150% of the national average). Likewise, a rural area is considered an area outside a metropolitan statistical area with a population of 20,000 people or less.
Documentation required for Petition I-526
Our firm assists EB-5 investors to comply with documentation requirements by providing content services for documents such as;
- Business plans
- Corporate structuring
- Operational agreements
- Incorporation Services
- Property Lease Agreements
And through our partners we can provide:
- Intellectual property
- Real estate services
- Design services
- Relocation services
For EB-5 investors who directly invest the reduced threshold capital amount of $ 500,000.00 in a “targeted employment area,” they are required to provide a detailed plan for job creation within their business plan. Rahbaran & Associates recognizes that our clients may not have the necessary experience to provide such a report and, therefore, offers additional services to these investors to provide such documentation.
“At Risk” Investment
All EB-5 investors must be able to demonstrate to the United States Citizenship and Immigration Service (USCIS) that their EB-5 investment is “at risk.” This means that there should be no guarantee of return of capital, such as a redemption agreement. An EB-5 investor cannot lend the required investment to the new business enterprise, and cannot receive a bond, note or other debt arrangements from the company in exchange for the capital contribution. Also, when the investor’s guarantee on a loan comes from the company, the loan does not constitute a capital investment by the petitioner.
The EB-5 investor can use a trust, agreeing to release the funds to the commercial company at the time of approval of the conditional permanent residence I-526. However, USCIS has warned that the trust should release funds directly into the company’s accounts for job creation purposes. Most of the investments in regional centers are designed to maximize the probability that the EB-5 investor receives permanent residence, so they are not intended to maximize the benefits generated by the investment.
Legal source of funds
An essential element of the EB-5 investor visa program is the ability of the EB-5 investor to demonstrate that EB-5 investment funds have been legally reached. Documentation is necessary to demonstrate the lawful obtaining of EB-5 investment funds, as well as to demonstrate the path of funds (money path) to the United States. For additional information on the “source of funds” requirement, please visit our “source of funds” website. Our firm’s expert legal advice comes from years of experience with EB-5 immigration cases, and our specialization with the EB-5 program allows us to offer clients a valuable insight through the EB-5 petition process.