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1-140 Immigration Petition (Employment-based Green Card) Information
FIFTH PREFERENCE (EB-5) [Investor Program]:
The U.S. Immigrant Investor Program (commonly referred to as the EB-5 program) allows
qualified foreign investors and their immediate families the opportunity to earn U.S. permanent
residency. Permanent residency status can eventually be converted into U.S. citizenship after 5
years of residing in the U.S. as a permanent resident.
The EB-5 Program requires that applicants invest or be actively in the process of investing either
U.S. $1 Million or U.S. $500,000 in select designated areas and create full-time employment for
ten (10) U.S. workers. A U.S. Citizenship and Immigration Service (CIS) Pilot Program
provides for the establishment of CIS designated "Regional Centers". Investor applicants in
Regional Centers can demonstrate that an investment will create jobs not only directly, but also
indirectly. Most Regional Center applicants need only invest a total of $500,000 USD to qualify
for permanent residence. Thus, under this favourable new Regional Center Pilot program, an
EB-5 applicant can secure a Green Card based solely on an investment of $500,000 USD.
The establishment of this Pilot Program has led to the formation of several investment funds in
the United States through which EB-5 applicants are permitted to invest their money and secure
permanent residence status. These "funds" are all approved by the U.S. Department of
Homeland Security.
EB-5 PROGRAM SUMMARY
- The EB-5 Program allows investors a great deal of flexibility and freedom. The investment does not require investors to manage their investment on a daily basis. They must simply "actively engage" in a business enterprise meaning they can simply be Limited Partners;
- EB-5 investors are therefore able to pursue other professional or personal ventures after they arrive in the United States. They are not required to live in the state in which they invest. In most cases they must simply attend a meeting of the Limited Partners once a year;
- EB-5 investors and their family members are accorded "conditional" permanent residence status in the U.S.. If, after a period of two years, the investor can demonstrate that the total investment has been maintained and the requisite direct or indirect jobs created, then the conditional status of the original visa is removed. The investor and his or her family then receive unconditional permanent resident status;
- Upon receipt of the conditional (or unconditional) permanent resident status (Green Card), the investor and his family are entitled to the same benefits as other lawful permanent residents, including:
- The opportunity to live and work anywhere in the U.S.;
- The ability to travel outside of the U.S. and return without a visa;
- Education benefits such as admission to state universities at lower resident tuition rates;
- If the investor later elects to apply for U.S. citizenship, time spent as a conditional permanent resident will be counted towards the five year lawful permanent residency requirement for U.S. citizenship;
- The EB-5 program is the most flexible investment visa program in the world. The U.S. has no requirements as to age, business training or experience, language skills or requirements to start a business in the U.S..;
- EB-5 investors need not be continuously physically present in the U.S.. They are permitted to travel and maintain their business and professional relations in their country of origin;
- <10,000 U.S. EB-5 visas are allotted each year for aliens and family members. The EB-5 visa category is one of the few Green Card categories not presently backlogged;
BASIC ELIGIBILITY REQUIREMENTS
- Applicants must have a net worth of at least $500,000 USD. Ideally a net worth of $1 Million USD is required in order to avoid CIS scrutiny;
- The applicant's net worth must be "legally obtained". Earnings from a business, real estate, gifts, inheritance, stocks, value of family home may all be counted. Verification of assets, source of funds and financial valuations must be provided as part of the application;
- No prior business experience is required. No minimum level of education is required. No particular language skills are required. The only eligibility requirement for the investor is that he or she has the required net worth and capital;
- Applicant and family members must also clear a basic medical exam, police background check, and should have clean U.S. immigration histories with no overstay or status violation problems in their past;
APPLICATION PROCESS
- The prospective EB-5 applicant provides extensive financial and background personal information to counsel for screening. Counsel engages in a comprehensive eligibility screening process to ensure that the client is eligible for EB-5 status and to ensure that the applicant and accompanying dependent family members are admissible to the U.S. in terms of medical, criminal and immigration history issues;
- "Accompanying dependents" are defined as spouse (opposite sex – legally married) and unmarried children under the age of 21 (this can include adopted children);
- Investor Applicant reviews a list of the various approved Regional Centers with counsel. It is important to understand that counsel cannot recommend or endorse one Regional Center over the other;
- Regional Center is approached via their own investment application process. Once the Regional Center accepts the applicant, they will require payment of an investment deposit – normally $35,000 USD. These monies are held in "escrow" on behalf of the investor until such time as the EB-5 petition is approved or denied. If denied, monies are refunded;
- The attorney completes and files Form I-526 Immigrant Petition by Alien Entrepreneur. The petition is filed at the CIS Regional Service Center having jurisdiction over the location of the investment. Petition adjudication approximates 3 to 5 months;
- Once the I-526 petition is approved, the U.S. Department of State will issue an Immigrant Visa Application Packet which the attorney completes and files on behalf of the applicant and his or her family;
- U.S. Consulate / Embassy in home country then receive notification of Immigrant Visa interview. Medical examination required at this point. Attorney prepares the applicant thoroughly for the interview process;
- Visa is approved and issued normally at the interview. Immigrant Visas are valid normally for 180 days. Applicant and family must enter the United States within their visa validity period. Upon arrival, applicant and family become conditional U.S. Permanent Resident Aliens;
- Following arrival, attorney and Regional Center continue to work with and counsel the client to ensure they comply with EB-5 requirements, complete their investment and apply to remove their conditions 21-24 months after entry.
RISKS AND TECHNICAL POINTS:
- The investor is required to place an initial $30,000 - $35,000 into an Escrow Account when they are accepted by the Regional Center and commence their application process. These monies constitute subscription agreement fees for the Regional Center used to cover legal and administrative expenses associated with accepting the investor into the Limited Partnership;
- The remaining $500,000 USD subscription balance is required to be placed in the Escrow Account before the I-526 Immigrant Petition is filed. The investor's entire funds are held in the protected Escrow Account until the visa application is approved;
- Funds are NOT released to the Regional Center for use in the selected enterprise unless and until the Immigrant Petition is approved AND the immigrant visa has been issued;
- If, for any reason, the investor decides to pull out of the case or the visa is not approved, the investor's monies are returned. The various Regional Center's subscription agreements normally provide for return of funds within 14 days of denial or withdrawal;
- The investor's funds must remain invested with the Regional Center for a minimum period of 2 years. Since the purpose of the EB-5 program is the creation of permanent jobs in the United States, the CIS does not want the investor to immediately withdraw funds after receiving a Green Card. Most Regional Centers require that funds be committed for a 5 year period;
- Most Regional Centers commit to paying the investor 2.5 to 3.0% interest per annum on their invested funds;
- Any interest earned or profits accrued on an investment that result in actual distribution of cash may result in U.S. tax liability. The Regional Centers make every effort to reduce tax exposure through other deductions for expenses and losses that the business may incur. In the event that taxes must be paid, they are normally minimal. That said, it is critical to retain experienced accounting counsel throughout the EB-5 process;
- The EB-5 program was authorized by Congress on the basis that the investor's funds are put "at risk" in the U.S. economy. It is critical to understand and accept the risk of business failure in the EB-5 context. Inherent risk is part of the process. Should a Regional Center business fail during the first 5 years following receipt of the investor's investment, the monies invested could be lost;
- To-date, no Regional Center EB-5 businesses have failed. DHS engages in scrutiny of both the Regional Center management backgrounds, as well as the business plan itself in order to minimize the risk of failure;
- Most Regional Centers are owned by large Fund Companies. In the event that one Regional Center business fails, most Funds commit to the investor that they will transfer them into another investment at no cost to the investor, subject to CIS approval. There are also provisions in the Regulations permitting removal of conditions notwithstanding business failure or lack of job creation where the investor can demonstrate good faith.
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