The Immigration Corner: EB-5 Investor Green Card – General Overview
The fifth preference classification for employment-based immigration, more commonly referred to as the EB-5 green card, is an employment-based green card, whereby the immigrant invests a certain amount of money into a business, creates a certain amount of jobs and receives a green card to come to the U.S. to manage the business. The EB-5 Program was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors.
The EB-5 Program has two parts: 1) the permanent Direct EB-5 Program, officially known as the Immigrant Investor Program, and 2) the temporary Regional Center EB-5 Program, officially known as the Immigrant Investor Pilot Program, which requires reauthorization from Congress every so often. Although initially an unpopular green card option, over the last several years, the popularity of EB-5 program has grown exponentially, particularly for investments through the Regional Center EB-5 Program.
The EB-5 green card has four main requirements, whether it is a direct EB-5 or a regional center EB-5, in order to qualify. They are:
- Invest the required minimum amount
- Create a minimum of 10 full-time jobs
- Establish that the investor is or will be engaged in the management of the new commercial enterprise
- Invest in a new commercial enterprise
The EB-5 Program created two minimum investment amounts. The default investment amount is $1,000,000 USD. If the immigrant is investing what is deemed a Targeted Employment Area, the minimum investment amount is $500,000 USD. A Targeted Employment Area is defined as an area that, at the time of investment, is a rural area or an area which has experienced unemployment of at least 150% of the national average rate. A rural area is any area not within either a metropolitan statistical area (as designated by the Office of Management and Budget) or the outer boundary of any city or town having a population of 20,000 or more according to the most recent decennial census of the United States. A Targeted Employment Area is usually determined by consulting with a State or Federal government agency.
The most common form of investment is the investment of cash into the business. Regardless of the type of investment, any investment under the EB-5 program must come from legal sources and the immigrant must be able to document this.
Job creation is essential to the purpose behind the EB-5 Program. For EB-5s, a minimum of 10 full-time jobs must be created by the investment. These jobs must be created in the new commercial enterprise that was invested in. Other in-direct jobs are not counted. To illustrate this, here is an example: An investor invests in a new fast food restaurant. The types of jobs that could qualify and count towards the jobs requirement would include manager, assistant manager, cashier, cook, etc. The type of jobs that would not qualify would be the indirect jobs, such as the architect who worked on the building design, the construction workers who built the building, etc.
The only exception to the direct jobs requirement is when the investor invests through a regional center. For those cases, the indirect jobs can be counted in the EB-5 jobs calculation.
Management of the New Commercial Enterprise
Another requirement for the EB-5 classification is for the investor to engage in the management of the business by either having day-to-day managerial responsibility or through policy formation activities. Having day-to-day managerial responsibility is generally established by the investor’s position in the business. Similarly, policy formation activities are generally established by the role of the investor in the business.
New Commercial Enterprise
EB-5s require the investment into a new commercial enterprise. All this means is that the business entity invested into needs to have been created after November 29, 1990, which is usually the case. However, the investment into a business entity that was established before November 29, 1990 is allowed if either a) the business entity was restructured so a new commercial enterprise exists; or b) the investment expands the business with a 40% increase in net worth or the number of employees.
The EB-5 Program can be a viable option for those individuals looking to invest a substantial amount of money in a business in the U.S. and want to remain in the U.S. permanently. Particularly with the Regional Center EB-5 Program, the EB-5 Program provides an opportunity to “buy” a green card. Through the EB-5 Program, the investor can obtain green cards for his or her spouse and unmarried children under the age of 21. With such a substantial investment, it is important to have legal counsel that has a thorough understanding of the EB-5 Program and proven track record of success.
Attorney Paul Messina focuses his practice on all aspects of employment-based, investor-based and family-based immigration law. He has extensive experience in proceedings before United States Citizenship and Immigration Services (USCIS) and the Consular Section of the United States Department of State. He has handled a variety of immigration cases, including employment-based green cards, EB-5 investment-based green cards (direct and through regional centers), and many of the non-immigrant visa/status categories as well as family-based green cards.
Author’s note: The Immigration Corner presents current and relevant topics in immigration law. The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation. Regulations and laws may vary depending on your location. Consult with a licensed attorney in your area if you wish to obtain legal advice and/or counsel for a particular legal issue.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.