1. What is the Employment-Based Fifth Preference ("EB-5") Immigrant Investor Visa Program?

The Immigration Act of 1990 created a new immigrant visa category for alien entrepreneurs known as the EB-5 Immigrant Investor Visa program. This program, inspired by a successful Canadian investor visa program, offers opportunities for aliens seeking U.S. lawful permanent resident status based upon a qualifying investment. In general terms, the EB-5 program requires that an alien "invest or be actively in the process of investing," either $1 million or $500,000 USD (if in a rural or high-unemployment area), which is "at risk' in a "new or existing business enterprise" that directly results in the creation or preservation of ten full-time jobs within a two-year period.

How many immigrant visas are allotted for this classification?

This EB-5 program allots 10,000 visas per year for aliens whose qualifying investments directly result in the creation or preservation of at least ten full-time jobs for U.S. workers. Three thousand (3,000) immigrant visas are set aside for aliens who invest in targeted areas, defined as areas of high unemployment or qualifying rural areas. In 1995, less than 600 immigrant investor visas were issued by the government.

What investment enterprises qualify under the regulations?

Under the regulations, there are three types of qualifying investments for investor visa purposes: the new commercial enterprise, the expansion of an existing business, or the rehabilitation of a troubled business. These are further defined as follows:

(A) The "new commercial enterprise" is either the creation of an original business, or the subsequent or simultaneous restructuring of an existing business such that a new commercial enterprise results;

(B) The "expansion of an existing business" may qualify through the investment of the requisite dollar amount such that a 40% increase in either the net worth or the number of employees results. The expansion must cause at least a 140% increase in either the pre-expansion net worth or numbers of employees; or,

(C) The "troubled business" investment requires the requisite dollar amount in a business which has been in existence for at least two years, and for a period of 12 to 24 moths prior to the filing of the petition, has demonstrated at least a loss of profit equal to 20% of the business' net worth.

What do the regulations mean by the term "invest?"

Under the regulations, an alien is required to "invest" or be "actively in the process of investing" the required capital. The mere intent of investing does not meet this requirement. However, the U.S. Immigration and Naturalization Service ("BCIS") does allow investors to demonstrate the "commitment of the required amount" at the time of filing the immigration petition to satisfy the regulations.

What is meant by a qualifying investment "capital?"

The regulations define capital as cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien entrepreneur. A debt will qualify as capital only when the alien entrepreneur is primarily and personally liable for the indebtedness. The regulations permit indebtedness secured by the alien's own assets to count as "capital." This rule allows investment flexibility and broadens the number of investors eligible for the EB-5 program.

Must the investor have previous business experience or education?

Under the regulations, the investor is not required to have any prior business experience. Likewise, the investor is not required to demonstrate any minimum level of education. The only requirement for the investor is that he has the required net worth and capital.

What is meant by the requirement that the investor's assets be "lawfully gained?"

Under the regulations, the investor must demonstrate that his assets were gained in a lawful manner. This requires the investor prove his net worth was obtained through a lawful business, salary, investments, property sales, inheritance, gift, loan, or other lawful means.

How does an investor apply for the EB-5 visa?

An investor must apply to the USCIS for EB-5 visa qualification through the submission of a number of required elements including: immigration forms, personal financial information, business plans, legal brief on qualifications under the proposed application, geographic statistics, and other supporting evidence. Statistics recently released by the USCIS reveal that only approximately 50% of all EB-5 applications have been approved by the USCIS in the past several years.

May several aliens combine or "pool" their investment capital to thereby qualify for the immigrant visa through one large qualifying investment enterprise?

The regulations specifically allow for pooling of funds by several investors to establish a single commercial enterprise sufficient to qualify all participating investors. The only requirement is that each investor individually must qualify for the minimum capital at risk and the jobs creation.

Who besides the investor may receive the green card?

Under the regulations, the USCIS allows family members to receive the green card at the same time as the investor. Family is defined as the spouse and all unmarried children under the age of 21 years.

What is the difference between "conditional" and "unconditional" green cards?

Under the regulations, an investor who is approved for the EB-5 immigrant visa receives a "conditional" green card. The only difference between this green card and the unconditional green card is that the conditional green card must be reissued after two years. However, this card is exactly the same in every other manner, and offers the same rights and privileges as the unconditional card. This same process is based upon procedures established by the USCIS in other immigration contexts. For example, every marriage-based sponsorship case allows that the alien spouse initially receive a conditional green card for two years before the issuance of the conditional card. The EB-5 investor program works the same way.

How does the investor obtain the "unconditional" green card?

After two years, the investor must demonstrate to the USCIS that he/she has complied with the terms and conditions raised in the original EB-5 application. Specifically, the investor must demonstrate that he has continued to make all required payments of the note and that the requisite jobs have been created/preserved by the investment enterprise. This process was established to filter out any visa fraud. Referring again to the marriage-based sponsorship example, the USCIS requires that before the permanent green card may be issued the alien-spouse must demonstrate after two years that the marriage is still valid. The investor program is the same. Upon demonstrating the investment is valid, the investor and family will be issued unconditional green cards.

What are the residency requirements once the green card is issued?

The USCIS states that in order to maintain status as a lawful permanent resident, an alien must establish residency in the United States and maintain an "intent" to permanently remain a resident of the country. Thus, the investor should enter the U.S. and establish a residency which may include opening bank accounts, obtaining a driver's license, paying state and federal taxes, renting or buying a home, or other actions. Additionally, the investor should expect to be physically present in the United States, at a minimum, for at least one to two weeks over each year. The longer the investor and family are present in the U.S. the less likely the government is to claim that the investor "constructively abandoned" the United States as a permanent resident - thereby endangering his green card status. Unlike Canada, there are no specific physical presence requirements for U.S. permanent residents. In some cases, investors may seek the issuance of a "Reentry Permit" which allows USCIS to grant permission to remain outside the U.S. for since two years without having to reenter the U.S. to maintain permanent resident status.