WHAT IS THE USA EB-5 VISA?
The EB-5 Visa is a residency-by-investment program which requires a financial commitment of at least USD 800,000.
This program grants a conditional Green Card (Permanent Residence in USA) for 2 years, after which a petition can be filled to remove those conditions.
EB-5 Visa Advantages
- Obtaining a Green Card (Permanent Residence in USA) for the investor and family members
- Dependents included:
- Children under 21
- Right to live, work, and study in the U.S.
- No minimum education or language requirements
- Pathway to obtaining U.S. citizenship after 5 years of residence in USA
Investment Options for EB-5
1. Direct Investment:
- Set up a New Commercial Enterprise (NCE)
- Make the necessary investment into the NCE
- The NCE must directly create 10 permanent full-time jobs for qualified U.S. workers
2. Investment via a Regional Centre:
- No requirement for the applicant to set up an NCE
- The applicant meets the statutory job creation requirements based on economic projections counting direct and indirect jobs
EB-5 Visa Requirements
- Invest in a New Commercial Enterprise located in a Targeted Employment Area (TEA) or outside a TEA:
- Investment in TEA: the minimum qualifying investment is USD 800,000
- Investment outside TEA: the standard minimum qualifying investment is USD 1,050,000
- Must provide proof of the source of funds used for investment
- Investment must be at risk and meet a statutory job creation of at least 10 jobs
EB-5 Visa Process
- Submit the completed application forms and required documents
- USCIS will grant to successful applicants and dependents a 2-year conditional Green Card
- Before the 2nd anniversary of the conditional Green Card, the candidate must file a petition for removal of the condition set on the conditional Green Card
- The application processing time varies according to the investor’s country of chargeability
- Countries experiencing high EB-5 Visa demand are subject to a backlog delaying the application’s processing time
The United States Citizenship and Immigration Services (“USCIS”) is the Government agency that oversees immigration applications to the United States.
USCIS administers the EB-5 Immigrant Investor Program and is the competent authority for the adjudication of I-526 petitions.
The I-526 petition is the name of the form used to file the application of an investor who wishes to immigrate to USA via the EB-5 Immigrant Investor Program.
The I-526 form contains all the details of the EB-5 investment and the project in which the investor is investing his/ her funds in.
The I-526 approval means that USCIS has reviewed and approved the investor’s EB-5 application.
The I-829 petition is the name of the form used to file the application of an approved EB-5 investor who holds a Conditional Green Card.
Before the 2nd anniversary of the Conditional Green Card’s issuance date, the investor has to file the I-829 petition to remove the conditions on his permanent resident status.
To remove the conditions, the investor will have to prove that his/ her EB-5 investment has allowed the creation of 10 full-time jobs in the EB-5 project.
The I-829 approval means that USCIS has reviewed and approved the investor’s removal of conditions application.
A Regional Center (“RC”) is an economic unit, public or private, that promotes economic growth, regional productivity, job creation, and increased domestic capital investment.
Regional Centers are designated by USCIS.
USCIS is entitled to terminate a Regional Center in case the RC is no longer promoting economic growth in USA.
As of September 10, 2018, there were 886 designated Regional Centers in USA.
Targeted Employment Area (“TEA”) is defined as a rural area or an area experiencing an unemployment rate of at least 150% above the national employment average.
The Department of Homeland and Security (“DHS”) is the authority in charge of the designation of geographic zones as TEA.
Having an EB-5 project located in a TEA allows for a reduced minimum EB-5 investment amount.
In a TEA, the EB-5 minimum investment is USD 800,000 instead USD 1,050,000 which is the EB-5 standard amount.
EB-5 Direct investment:
A direct investment (in other words, not via a Regional Center) requires the investor to control and manage the EB-5 project.
As part of the requirements to manage the project, the investor will be in charge of the creation of 10 full-time direct jobs for qualified US workers.
In such case, it is an active investment.
If the client invests via a Regional Center, he/ she does not have to get involved in the management, since the Regional Center will be managing the project. In such case, it is a passive investment.
Selecting an EB-5 project requires a strict Due Diligence Phase in order to carefully assess the following:
- Total amount of investment vs total amount of EB-5 investment;
- Expenses and costs in connection with the project’s construction;
- Financial forecasts and project’s economic analysis;
- Number of EB-5 investors required for the EB-5 raise vs job creation calculation and cushion;
- Investment holding period and exit strategy (repayment of the EB-5 investment and interests);
- USCIS I-924 approval (designation of the Regional Center) and existing I-526 approvals;
- Country of origin of the EB-5 investors (i.e. backlog and retrogression for investors from Mainland China, Vietnam, and other countries over quota);
- Project’s on-site visit and meetings with project’s representatives.
The Source Of Funds (“SOF”) of the EB-5 investment is the key part of the I-526 petition. Evidencing the investor’s SOF will require a full review and understanding of the investor’s assets.
It will require analyzing notably:
- Income from salaries, bonuses;
- Income from real estate rentals;
- Client shareholding, profits of his/ her business (companies, household) and dividends distributed;
- Assets transfer, such as real estate transactions, equity, stocks;
- Loans and mortgages;
- Gifts from relatives;
- Insurance and allowances.
From an immigration standpoint, the investor is protected as long as the Job Creation requirement is satisfied.
If the project has created 10 full-time jobs for U.S. workers, the investor will be in position to remove the conditions set on his Green Card and obtain the right to live, work, study in USA for life.
From a business standpoint, if the project goes bankrupt, the investor will not be in position to get back the EB-5 investment.
That is the reason why HLG does not agree to file the I-526 petitions of clients who choose their own EB-5 project.
HLG will assist clients for the processing of their I-526 petitions only if the clients invest in a project on which HLG has conducted the Due Diligence Phase mentioned at Question 6 above.
Successful I-526 petitioners will have all the same rights as a Permanent Resident (Unconditional Green Card holder) while holding the Conditional Green Card.
However, the Conditional Green Card is only valid for 2 years. The I-829 petition will allow the investor to obtain an Unconditional Green Card and the right to live, work, study in the USA for life.
While both Green Card holders and U.S. citizens have the right to live, study, work in USA indefinitely, some of the differences between the 2 statuses are listed below:
- The Green Card does not provide free mobility outside USA;
- To become citizen, a Green Card holder will have to live in USA for 5 years prior to be entitled to file for citizenship via naturalization;
- Green Card holders are not allowed to vote and run for U.S. elections;
- U.S. citizens can live outside USA for an unlimited period of time while Green Card holders must file for Re-Entry Permits;
- US citizens can sponsor immediate relatives or family members such as parents, married children, and siblings;
- Permanent residents can lose their immigration status if they commit crimes.
Green Card holders may apply for Re-Entry Permits to be entitled to stay outside the United States for more than 6 months per year.
Any person aged 21 years or over can be the Principal Applicant (“PA”).
For married couple, the choice of the PA will be made based on the spouse who plans to stay longer and spend most of his/ her time in the U.S.
In case one of the spouses needs to travel back and forth between USA and his/ her country of origin, HLG will advise him/ her to be Dependent Spouse.
In such case, the documents evidencing the adoption and custody over the child must be submitted as supporting documents of the I-526 Petition.
Only U.S. citizens are entitled to file Sponsorship applications for their parents.
The present document is intended for guidance and general information only and does not constitute or purport to provide you with legal advice. Such information is subject to changes without notice. Each case is unique and depends on the facts and circumstances of the individual and due consideration should be taken if applying the general information to your personal situation. For an evaluation of your personal circumstances one of our legal team would be happy to assist.