EB-5 Investor Visas
For many foreign investors, the United States presents a wealth of new business opportunities in a thriving economic market. However, even wealthy investors seeking to move to the U.S. for business purposes must jump through a variety of hoops before they can do so. The Employment-Based Fifth Preference Category Visa — otherwise known as EB-5 — offers investors the opportunity to establish residency in exchange for their investment in the U.S. economy.
Unfortunately, there is a cap of about 10,000 such employment-based visas issued in the United States each year. In addition, there are also country-specific caps, which for some investors may cause the application to take quite a while.
What is an EB-5 visa category?
The EB-5 category of employment-based visas is available to foreign immigrant investors seeking to make a significant investment in certain commercial enterprises on U.S. soil. Congress created the EB-5 Immigrant Investor Program in 1990 as a way to stimulate the economy and create more jobs. The program was first piloted in 1992 and has been reauthorized regularly since then. While an attractive option for many wealthy foreign investors, the program also comes with complex regulatory and procedural requirements.
The EB-5 category of visa gives foreign investors a path to U.S. residency by investing in a New Commercial Enterprise (NCE). This is defined as:
- Investing in a commercial enterprise established after Nov. 29, 1990;
- Investing in an enterprise established on or before Nov. 29, 1990, that was:
- Restructured or reorganized so that a new commercial enterprise results; OR
- Has been expanded so that a “substantial” change in the net worth or number of employees has occurred. (“Substantial change” means a 40% increase in either the net worth or the number of employees.)
A commercial enterprise can be many kinds of legally established businesses, such as a sole proprietorship or partnership, a holding company, a corporation, or a business trust. The business entity must be involved in lawful for-profit activity.
Investors may qualify for a visa using the EB-5 category by investing through regional centers designated by U.S. Citizenship and Immigration Services (USCIS). They must invest based on specific proposals for stimulating economic growth.
The capital investment can include cash, equipment, inventory, and debt secured by the investors’ own assets. Investors must also be able to prove that they are the legal owners of the capital they’re seeking to invest.
As for how much they must invest, the amounts vary depending on whether they are investing in a targeted employment area (TEA) or a high-employment area (HEA). The minimum required investment is currently $900,000 for TEAs and $1.8 million for HEAs. Those minimums are updated every five years, and increases are tied to the Consumer Price Index for All Urban Consumers (CPI-U).
Let’s break down some terms that you may be unfamiliar with. First, “targeted employment area” refers to a rural area or an area with an unusually high unemployment rate (at least 150% the national average, to be specific). Here, a “rural area” is any area other than a metropolitan statistical area (MSA) or an area that sits on the outer boundaries of any city or town with a population of at least 20,000 people. A “high unemployment area” can be an MSA, a specific county within an MSA, a county, or a city or town. It may also consist of a census tract or multiple, contiguous census tracts that meet the 150% unemployment threshold.
Given the complexity of the qualifying regulations, it’s no wonder that many foreign investors seeking a visa under the EB-5 category turn to seasoned attorneys like the team at Farmer Law for legal help. Busy investors seeking to bring their business savvy to the United States can focus on their business interests, knowing that the heavy lift of accurately interpreting complex visa regulations rests on an experienced team that provides full-service immigration solutions.
The EB-5 application process is perhaps as complex as the qualifying requirements. It can be thought of in three main steps:
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- Complete a Form I-526. Otherwise known as Immigrant Petition by Alien Investor, you can think of this form as a precursor to the actual visa application, letting USCIS know of your intent to immigrate to the United States for the purpose of investing in a commercial enterprise.
- Submit the required application. A DS-260, otherwise known as Application for Immigrant Visa and Alien Registration, gets filed with the U.S. Department of State once the Immigrant Petition has been approved. Alternatively, in some specific circumstances, an applicant who is already in the U.S. may file Form I-485, an Application to Register Permanent Residence or Adjust Status, with USCIS. Upon approval of the Form I-485 or upon admission into the country with a valid visa in the EB-5 category, USCIS will give the EB-5 investor and their derivative family members residency for two years.
- Apply for the removal of residency conditions. Form I-829, known as Petition by Investor to Remove Conditions on Permanent Residence Status, must be filed within the 90-day period immediately before their two years of residency is up.
Each form comes with a laundry list of necessary supporting documentation that must be submitted by the visa applicant. Many of those documentation requirements are related to applicants’ intended or in-progress U.S. investments.
Changing EB-5 Landscape
A rule published by the U.S. Department of Homeland Security went into effect in November 2019 and made several changes to the EB-5 Immigrant Investor Program. Specifically, the new rule:
- Provides priority date retention to some EB-5 investors of previously approved petitions when filing a new one
- Increased the standard minimum investment requirement to $1.8 million (up from $1 million) to account for inflation, and the TEA investment to $900,000 (up from $500,000)
- Made changes to some of the targeted employment area designations to direct investments to areas most in need, including by
Requiring review of high-unemployment TEAs rather than deferring to TEA designations made by state and local governments
Adding cities with populations of 20,000 or more outside of MSAs to the list of TEAs if they have an average unemployment rate of at least 150% the national average
- Clarified the procedures for removing conditions on permanent residency, specifying that derivative family members — such as a spouse and children whose immigration status is tied to the primary petitioner’s status — must file individually to remove the conditions on their permanent residency
However, some of these adjustments to the program may be rolled back, as a federal judge is currently considering a lawsuit brought by the Behring Regional Center, one of the economic growth centers that is part of the EB-5 program.
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While the regulations outlined in this article may seem burdensome, they’re only the tip of this very worthwhile iceberg. Other EB-5 regulations deal with things like the location of commercial enterprises, how positions to be counted for visa purposes are defined, how certain rules apply to troubled businesses, and what constitutes a troubled business. It’s easy to see why working with an EB-5 visa attorney is such an attractive option for so many foreign investors seeking an employment-based visa under the EB-5 program.
Contact Farmer Law today for help from an expert legal team who understands how to navigate the EB-5 investor visa process with ease.
“The Farmer Law PC team goes above when it comes to keeping us compliant and helping us learn more each day.”
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