The EB-5 immigrant category is a multi-stage pathway to US Lawful Permanent Resident status. It rewards foreign investors who invest lawfully-sourced funds, creating at least 10 full time jobs in the U.S.
The Process
The Investor invests their funds into a New Commercial Enterprise (NCE) either under their own control (Standalone EB-5), or in a pooled endeavor with other EB-5 candidates (Regional Center EB-5).
The Investor files an I-526 for a Standalone, or an I-526E for a Regional Center.
- Note that the Regional Center option also requires the NCE and Regional Center to file their own documents with the USCIS first.
If the Investor is inside the US and there is no waiting list for green cards for their country, they may also file an I-485 to Adjust Status (AOS) at the same time as the I-526(E), formally asking the USCIS to issue them a green card.
- If there is a waiting list for the Investor’s nation of birth, then the I-485 cannot be filed until after the I-526(E) has been approved.
- A properly filed I-485 allows the applicant to remain inside the US without accumulating any unlawful presence, and also allows the applicant to request work authorization and advance parole travel documents to re-enter the US.
If the Investor is outside of the US, they must wait until their I-526(E) is approved, then they may apply for an Immigrant Visa using online form DS-260 and then attend an interview at a US consular post.
Once the I-485 green card or the DS-260 immigrant visa are approved, the Investor is granted Conditional Lawful Permanent Resident status for two years (CLPR, “conditional green card”, “two-year green card”).
In the final three months of the CLPR status, the Investor must file I-829 to Remove Conditions. This petition usually seeks to prove to USCIS that the Investor’s funds actually created 10 full time jobs. This process may take several years to adjudicate. A properly-filed I-829 generally extends the CLPR status for 4 or 5 more years.
Once the I-829 is approved, the Investor receives an unconditional LPR green card and the EB-5 process is complete.
Who may invest? The investor’s credentials:
Unlike many other EB- (employment-based) categories, the EB-5 has no particular requirements of the investor, such as language ability, personal achievements, or academic degrees.
The EB-5 investor does not even need to be a business person by nature or background – many EB-5 investors are F-1 foreign students in the U.S. or recent H-1B workers, who receive the lawful funds from family members.
The lawful source of funds – how much must be invested, and what sources are allowed:
The investor must make a minimum investment of US$1,050,000. However, if the Investor plans to create jobs in a Targeted Employment Area, they enjoy a reduced amount of US$800,000.
The funds must be lawfully sourced, and must belong solely to the investor. The Investor should expect to work closely with their lawyer to assemble evidence to prove that the Investor’s funds came from a lawful source. This part of the petition is usually the most document-heavy factor.
The funds must be truly invested, to participate in a risk of loss and a chance for profit. Guarantees or warranties between the NCE and the Investor are not allowed. The USCIS views these arrangements as a loan rather than an investment, which disqualifies it from EB-5 investment rules.
Where to invest? Targeted Employment Areas:
The standard investment amount is US$1,050,000. However, EB-5 projects may qualify for a reduced investment amount of US$800,000, if they create their jobs in certain “targeted employment areas” (TEAs). The most popular TEA categories are:
Rural areas: the EB-5 jobs must be created outside of metropolitan areas, or in areas with a low population.
- The USCIS has prioritized the adjudication of Rural EB-5 petitions. Accordingly, the I-526(E) petitions for Rural cases are usually adjudicated more quickly than for non-Rural EB-5.
High unemployment areas: the EB-5 jobs must be created in an area with 150% of the national unemployment rate.
Standalone EB-5:
The Standalone EB-5 traditionally serves a foreign entrepreneur with a business plan and a lawful source of funds. The investor is responsible for creating the business plan, conducting the job creation studies, and otherwise providing all economic documentation about the project. The investor must also demonstrate that all EB-5 jobs are properly created, and must fulfill all US employment and labor laws.
Benefits:
Investor can exercise very close control over the NCE and its operations.
A Standalone EB-5 begins with an I-526 petition by the Investor, with no prior filing necessary from the project.
Drawbacks:
Investor is responsible for all documentation involving the business activity, job creation, and compliance with employment laws. For Investors who have other priorities (e.g. F-1 overseas students who must focus on their academic studies) this may be overwhelming.
USCIS typically requires more time to adjudicate Standalone EB-5 petitions, because each Standalone project is usually tailor-made for one EB-5 Investor.
Standalone does not allow multiple EB-5 petitions from multiple EB-5 petitioners; it only allows one EB-5 filed by one foreign Investor. Other investors may hold interests in the business, but none of them may file EB-5 petitions.
Regional Center EB-5:
The Regional Center program targets Investors who wish to pool their funds with other EB-5 investors, and who prefer to entrust their capital investment with an NCE management team. Each Regional Center is a US business entity which is registered with the USCIS, and may have several NCEs under its organizational umbrella. Each NCE also must file with USCIS before it may accept EB-5 Investors.
Benefits:
The Regional Center and NCE management team provides documentation of business activity, job creation, and compliance with employment laws. The Investor does not need to provide this information about the project, thus removing a great deal of documentation responsibility from the Investor.
The USCIS generally adjudicates Regional Center I-526E petitions more quickly, because the USCIS can review the project’s documentation once, and then apply this project approval to each Investor who later files an I-526E petition.
Regional Center projects can rely on econometrics to calculate job creation more abstractly. Unlike Standalone projects, they do not need to count “boots on the ground” job creation.
Drawbacks:
The Investor must be comfortable entrusting the NCE team to manage their funds.
The Investor must rely on the NCE team to provide much of the documentation in support of the Investor’s I-526E petition, and later to support the Investor’s I-829 petition.
In summary: the EB-5 program has proven to be a popular choice for immigrants who wish to contribute to the US economy by creating 10 job opportunities. Standalone EB-5 serves investors who want to control their commercial enterprise directly; Regional Center EB-5 serves investors who wish to invest into a pooled commercial enterprise that is managed by a project team.
Contact us today at intake@bhulaw.com or via Wechat at “BenjaminCJHu” to discuss EB-5 options to get started on your US immigration journey.