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EB-5 Immigrant Investor Program – FAQ

EB-5 Immigrant Investor Program – FAQ

Frequently Asked Questions

Q: What is the U.S. EB-5 Investor Immigration Program?

A: The 1990 Immigration Act (the “Act”) created an employment creation immigrant investor visa program to be administered by U.S. Citizenship and Immigration Services (“USCIS”). The EB-5 Visa permits foreign nationals to receive conditional resident status in the United States in exchange for making a capital investment in the U.S. that will benefit the economy. Each investment needs to create or save ten full-time jobs for U.S. workers.  The minimum amount of investment is $1,000,000, but that minimum amount is reduced to $500,000.00 if the investment is made in a high unemployment area or qualifying rural region.

According to regulations under the Eb-5 Immigrant Visa program (the “Program”), investors meeting one of the following three conditions qualify to obtain an EB-5 immigrant visa

1.    Investment of $1,000,000 in any region of the United States in a business employing at least ten employees;

2.    Investment of $500,000 in a business located within a region of the United States designated by the U.S. Government as an area of low employment and employing at least ten employees

3.    Invest of $500,000 in a business located within a “Regional Center” as specially designated by the U.S. Government.

Of all U.S. Immigration categories, the EB-5 program is the fastest and least restrictive in terms of requirements and conditions. Among the three categories of EB-5 investment, the third category regarding Regional Centers is the fastest, most convenient and least risky.

Q: What is the EB-5 “Regional Center” Program?

A: In 1993, the U.s. Government established a special “Region Center Immigration Program” to attract and concentrate foreign investment in specially planned and approved areas in order to stimulate economic development in those areas. Under this program, the minimum amount required for investors who invest within the U.S.-Government approved “Regional Centers” is reduced for $1,000,000 to $500,000. In addition, the original requirement that the investment “must directly create 10 jobs” has been loosened so that the investment may “indirectly or indirectly create 10 jobs.”

Q: Is there an annual limit on the number of EB-5 immigrant visas issued?

A: Yes, there is. At present, the U.S. Government may grant a maximum of 10,000 EB-5 investor immigrant visas per year: Of this figure, a minimum 3000 individual slots are especially reserved for persons investing in “Regional Center” projects. While the Program is gaining popularity, there has not been a single year since the beginning of the Program where all 10,000 visas have been issued.

Q: Are any countries excluded from eligibility?

A: There are no residents from any country that is excluded from filing for an EB-5 immigrant visa. However, USCIS has to follow all the laws and regulations in adjudicating the applications. Therefore, sanctions on foreign countries and other regulations do make it more difficult for foreign nationals from certain countries to apply.

Q: What are the requirements to apply for EB-5 immigrant visas?

A: Requirements placed on investors participating in the US EB-5 Investor Immigration program are quite lenient. There are no special requirements placed upon investors, such as having a business background, age, level of education or language abilities. In most cases, applicants who demonstrate their investment funds were obtained legally will receive an EB-5 immigrant visa.

Q: What can disqualify an investor from participating?

A: There are very few disqualifying or exclusionary events under the program. A criminal record involving war crimes or crimes of moral turpitude are disqualifying in most cases. There are also a few major medical problems that can also potentially exclude an applicant.

Q: Besides the $500,000 investment itself, what are the costs to file an EB-5 application?

A: In addition to $500,000 used as investment funds, EB-5 applicants generally pay an Administrative Fee to cover fees related to the project’s Region Center designation. The amount of this fee can vary between Regional Centers and projects. There will also be additional legal fees that are not included in the investment amount.

Q: How is the EB-5 Visa different from other Visas such as the E-1/2 or L-1 Visa?

A: The EB-5 immigrant visa is a way for applicants to acquire lawful permanent residence with the potential for U.S. citizenship. In contrast, other visas such as the E-1/2 and L-1 allow for non-immigrant status only. Therefore, an individual does not receive a green card. When the qualifying trade or investment ends under other visa programs, the individual must return to their home country. Under the EB-5 visa, the applicant receives a path towards permanent residency and citizenship if they choose.

Q: Can an individual apply if the individual is currently out-of-status (i.e., lived in the U.S., but does not have a current visa)?

A: Out-of-status nationals are no longer permitted to apply for permanent residency from within the United States. They must first return to their country of origin and apply through the United States Embassy there. Examples of “out-of-status” individuals are students and tourists who no longer have valid visas because they remained in the United States after their visas expired. In some cases, the “out-of-status” invest may need to apply for a waiver of inadmissibility. Once the petition is approved and individual’s adjustment of status application is filed, the applicant becomes legal and even qualifies for work authorization or advanced parole (permission to travel outside of the country during the conditional green card period).

Q: How long does it take EB-5 immigrant visa applicants to obtain their “green cards”?

A: Within the last year, the processing times for EB-5 immigrant visa applications have risen. USCIS would like to set a targeted processing time of 5 months. However, this is not a guaranteed time. The growing popularity of the program has increased the processing time for the applications, with no definite time period available.

Q: Can a conditional “green card” be changed into a conventional “green card” without any conditions?

A: Yes. According to U.S. regulations, each investor immigrant is granted a conditional “green card” valid for two years. Three months before the conditional “green card” expires, an additional application is filed with the U.S. Government seeking to remove all conditions on the “green card.” As long as the investor’s investment is still in existence at this time, and the investor can prove that this investment created ten jobs, the U.S. Government will approve the application and the investor will become a permanent resident.

Q: What items or documents are needed to apply for an EB-5 immigrant visa?

A: There is a long list of documentation that is needed in order for an application to be submitted. All applicants need to prepare basic biographical information and identification documents such as birth certificates, marriage certificates, and copies of passports. In addition, financial documentation will be needed in order to show the origin of the investment funds along with the path of the transfer of funds to the escrow account. The immigrant investor and accompanying family members will also eventually need to undergo a physical examination. The services of an immigration attorney are invaluable in the application process.

Q: Do investors and their immediate family members have to reside in the area where investments are made?

A: No. EB-5 investors and their immediate family members may live anywhere in the United States and conduct their lives as they wish.

Q: How long do investors and immediate family members have to wait before they can become naturalized United States citizens and obtain U.S. passports?

A: Five years, starting from the date of initial entry with the EB-5 investor immigrant visa. Time spent with a conditional “green card” is credited towards the five-year lawful permanent residency requirement for U.S. citizenship, as long as the holders of condition “green cards” meet U.S. citizenship residency requirements. In other words, after holding a conditional “green card” for two years and thereafter a conventional “green card” for another three years, or a total of five years, the investor and his or her immediate family are qualified to apply to become naturalized U.S. citizens. As soon as the naturalization process is completed, the investor and his or her immediate family members may obtain U.S. passports.

Q: Are there any residency restrictions during the period they hold conditional “green cards”?

A: After an applicant receives his or her visa, they must enter the U.S. within 180 days of the visa being issued. The investor is then responsible for establishing residency in the U.S. Evidence of the intent to reside within the United States includes opening bank accounts, obtaining a driver’s license, obtaining a social security number, paying state and federal taxes, and renting or buying a home. The investor may work overseas if required, based upon the nature of his or her business or profession. However, in order to ensure there are no issues with the residency, the investor and his or her family should enter the United States no less than once every 180 days. The longer the investor and family are present in the United States; the less likely the government is to claim that the investor abandoned their permanent residence status.

Q: Do investors have to take part in detailed management of their investments to qualify for the EB-5 investor immigration program?

A: No. The U.S. investor immigration program does not require immigrant investors to manage their investments on a daily basis, but rather to “actively engage” in a business enterprise. This means they can be limited partners and pursue other professional or personal ventures. This is helpful because the main applicant may be too busy to monitor the business on a day-to-day basis.

Q: What advantages and benefits do investors and their immediate family members enjoy from participating in the EB-5 program?

A: There are many advantages of the EB-5 program, starting with immediate residency rights. The children of Eb-5 investors get immediate access to U.S. educational system as permanent residents. Furthermore, after obtaining permanent residency status, an applicant has the ability to sponsor other family members after filing the appropriate applications. Unlike other avenues of immigration, the EB-5 program has no requirements as to age, business training and experience, or language skills. There is great flexibility in residency requirements.

Q: Will an applicant’s investment funds be returned in the event an EB-5 application is rejected by the U.S. Government?

A: The answer depends on the specific agreement signed with the regional center. It is therefore very important for the investor and their attorney to carefully read the agreements, as some regional centers may invest the funds into the project even if the application is denied by USCIS.

Q: But what if an applicant receives the approval letter, yet his or her subsequent application for an EB-5 immigrant visa is still ultimately rejected by the U.S. Government? Will investment funds still be returned?

A: No. Once the investment funds leave the escrow account, they are committed to the project. The applicant then has to wait until the investment period ends and will receive the investment funds back as per the terms of the agreements originally agreed to.

Q: Are investors guaranteed that their investment funds with be returned in full after obtaining permanent residency in the U.S.?

A: Under U.S. law, some financial risk must be inherent to an EB-5 investment project and third-party investment guarantees are not allowed. As a result, no one is permitted to guarantee the investment return. It is very important that the investor and their attorney carefully read the agreements signed with the EB5 project, as each regional center has different timelines for returning the investment, while some may not return the investment at all.

 Q: What are the tax implications of U.S. residency and the investment?

A: Any interest that is earned or profits on the investment that result in actual distribution of cash that are in addition to the investment may result in U.S. tax liability. In the event that taxes must be paid, they are generally minimal. Additionally, please note that upon obtaining U.S. residency, the investor’s global income will be subject to U.S. taxation. It is extremely important for the applicant to abide by the laws of the U.S., which include not only immigration laws, but also tax laws.

What are the requirements?

1. Must I speak English?

No. However, do try to learn English as it will help in an immigration interview.

2. Must I be in good health?

Yes. You must have no communicable diseases and proper vaccinations.

3. Must I have previous business experience or education?

The investor is not required to have any prior business experience. Likewise, the investor is not required to demonstrate any minimum level of education. The only requirement for the investor is that he/she has the required net worth and capital. (Accreditations)

4. What is meant by the requirement that the investor’s assets be “lawfully gained”?

Under USCIS regulations, the investor must demonstrate that his assets were gained in a lawful manner. This requires the investor to prove his investment funds were obtained through lawful business, salary, investments, property sales, inheritance, gift, loan or other lawful means.

5. Can money gifted by a parent or other relative be used for an EB-5 Investment?

Yes, provided that any applicable gift taxes are paid. It must be demonstrated that the gift is an actual arms length transaction and is not a mere ruse that the gifted funds will be given back after permanent resident status is granted.

6. Can I apply for an EB-5 if I have been rejected or terminated in the past by USCIS for an L-1, E-2, B, or other visas?

Rejection in the past does not disqualify the applicant, unless the reasons related to immigration fraud or other major problems. It is most important that all criminal, medical, or U.S. immigration history problems be disclosed to the limited partnership and legal counsel in advance of application.

7. Can I apply if I am currently without a valid visa?

Out-of-status nationals are no longer permitted to apply for permanent residency from within the United States. They must first return to their country of origin and apply through the United States Embassy there. Examples of “out-of-status” individuals are students, tourists, E-2 treaty investors who no longer have valid visas because they remained in the United States after their visas expired or were revoked. Use extreme caution.

8. Are any countries excluded from eligibility for the EB-5 Visa program?

Residents of only a few countries are excluded (e.g. Iran and Iraq). In most cases, however, if the applicant is able to leave the excluded country and has the necessary capital to qualify under the program, legal counsel will be able to help the applicant qualify for the visa approval.

9. Is dual citizenship allowed under this program?

Maybe. The U.S. allows dual citizenship, but your original country of origin may not allow it. You will need to investigate this.

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