Individuals seeking immigration into the U.S. on the basis of a financial investment currently find themselves in a climate unmatched in modern history. Many foreign currencies are now enjoying a very favorable exchange rate against the U.S. Dollar. For this reason, Immigration based on a financial investment in the U.S. continues to be a viable and popular method of coming to the U.S. for many investors and their immediate family members.

Entering the U.S. on the basis of an investment (as opposed to a family or employment-based petition) can either take the form of a nonimmigrant (temporary) visa or an immigrant visa, which results in the Permanent Resident “Green Card”. The Permanent Residency route for an investor is known as the EB-5 Investor Category.

This category was created by Congress to allow foreign investors and their immediate family members to obtain permanent residency in the U.S. in exchange for investing in an employment-creation commercial enterprise.

In order to qualify for EB-5 Immigration, the foreign investor must: 1) create a new business, 2) expand an existing business, or 3) purchase an existing business and reorganize it so that a new commercial enterprise results. Because it is an “employment-creation” method of obtaining residency, the investment business must also be able employ at least 10 full-time U.S. workers. The workers must have authorization to legally work in the U.S.

The EB-5 investor is initially granted conditional resident status for a two-year period in order to manage the enterprise either through day-to-day managerial control or through policy formation (i.e. as a member of the board of directors). As a conditional resident, the investor has the full rights of a permanent resident including the ability to work and travel in and out of the U.S.

At the end of the two year period of conditional residency, the investor must show that the investment business employs at least 10 full-time U.S. workers, is an ongoing business entity, and that the required capital amount has been invested. If these conditions have been met, the Immigration Service will convert the conditional status of the investor and his or her family into Permanent Resident Status.

To achieve the granting of Permanent Resident Status, the procedural guidelines to be followed are stringent and must be carefully observed. The investment funds must be placed at risk without conditions and continue to be at risk at the time the EB-5 investor applies to remove their conditional status. The investment amount is typically $1 million for establishing a new business or purchasing an existing business.

However, under certain circumstances, an investment amount of $500,000 will suffice. Investments in targeted employment areas (TEAs) only require an investment amount of $500,000. These are defined as rural areas (population less than 20,000) or areas of suffering from high unemployment areas (at least 150% of the national average).

Congress also created a subcategory of investment where the investment capital can be $500,000 if invested in a USCIS pre-approved Regional Center. Most are located in TEAs, thus permitting the lower $500,000 investment threshold.

The Regional Center investment for many investors is a preferred alternative. The investor will not have to demonstrate or prove the creation of new jobs to the USCIS. This requirement is intrinsic to the Regional Center’s pre-approval by the USCIS. Also, the investor can play a more limited role, typically as a limited liability partner, leaving the day-to-day management of the company to fall on others. This frees the investor to pursue other activities at the same time.

The approved Regional Centers are engaged in a variety of businesses such as land development, dairy farming, commercial banking and real-estate development. The Regional Centers are for-profit or quasi-government entities and as with any investment, carry their own degree of risk.

The EB-5 category is now “current” for all nationalities. This means that while some immigrants must wait years for their family or employment-based immigration to proceed, EB-5 Investors do not face a backlog. When considering an EB-5 Investment, the investor should note that the qualifying investment business can take various forms. Some successful examples of EB-5 businesses include restaurants, motels, import-export companies, car dealerships and small manufacturing companies.

Each particular investment option and investing family’s situation must be carefully evaluated in order to determine qualification for the EB-5 category. Investors should discuss and explore this visa category with an experienced immigration firm.

Author's Note: The analysis and suggestions offered in this column do not create a lawyer-client relationship and are not a substitute for the individual legal research and personalized representation that is essential to every case.

Thank you and more power!

Sheila Casal

Reeves & Associates, a PLC

Unit 507 Tower One Ayala Triangle

6767 Ayala Ave., Makati City, Philippines 1226

Phone: (632) 759-6777

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scasal@rreeves.com

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