EB-5 Introduction

This article is derived from USCIS’s publication which provides good basic understanding and procedure of investment immigration program (EB-5).

The Immigrant Investor Program, commonly known as "EB-5", was created by Congress in 1990 under § 203(b)(5) of the Immigration and Nationality Act (INA) to stimulate the U.S. economy through job creation and capital investment by alien investors. Alien investors have the opportunity to obtain lawful permanent residence in the United States for themselves, their spouses, and their minor unmarried children by making a certain level of capital investments and associated job creation or preservation.

There are two distinct EB-5 pathways for an alien investor to gain lawful permanent residence, the Basic Program and the Regional Center Pilot Program. Both programs require that the alien investor make a capital investment of either $500,000 or $1,000,000, depending on whether the investment is in a Targeted Employment Area (TEA) or not, in a new commercial enterprise located within the United States. The new commercial enterprise must create or preserve 10 full-time jobs for qualifying U.S. workers within two years of the alien investor’s admission to the United States as a Conditional Permanent Resident (CPR). When making an investment in a new commercial enterprise affiliated with a USCIS-designated regional center under the Regional Center Pilot Program, an alien investor may satisfy the job creation requirements of the program through the creation of either direct or indirect jobs. Notably, an alien investing in a new commercial enterprise under the Basic Program may only satisfy the job creation requirements through the creation of direct jobs.

Indirect jobs are the jobs held by persons who work outside the newly established commercial enterprise. For example, indirect jobs include employees of the producers of materials, equipment, and services that are used by the commercial enterprise. There is also a sub-set of indirect jobs that are calculated using economic models that are known as induced jobs. Induced jobs are those jobs created when direct and indirect employees go out and spend their increased incomes on consumer goods and services.

Under the Regional Center Pilot Program, an individual or entity must file a Regional Center Proposal with the California Service Center of the USCIS to request its approval of the proposal and designation of the entity that filed the proposal as a regional center. A "Regional Center" is defined as any economic unit, public or private, engaged in the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment. The Regional Center Proposal must provide a framework within which individual alien investors affiliated with the regional center can satisfy the EB-5 eligibility requirement and create qualifying EB-5 jobs.

The Regional Center Proposal may also include copies of the commercial enterprise’s organizational documents, capital investment offering memoranda, and transfer of capital mechanisms for the transfer of the alien investor’s capital into the job creating enterprise so that USCIS may determine if they are in compliance with established EB-5 eligibility requirements. Providing these documents may facilitate the adjudication of the related 1-526 petitions by identifying any issues that could pose problems when USCIS is adjudicating the actual petitions. For example, if a new commercial enterprise’s limited partnership (LP) agreement contains a redemption clause guaranteeing the return of the alien investor’s capital investment, then the alien investor’s capital investment will not be a qualifying "at-risk" investment for EB-5 purposes. Likewise, if the LP agreement requires the payment of fees from the alien investor’s capital investment of $1,000,000 (or $500,000 if in a TEA) to such extent that the investment will be eroded below the qualifying level, preventing the full infusion of sufficient capital into the job creating enterprise, then the alien investor’s capital investment will not meet the required EB-5 level of investment. The approval of a Regional Center Proposal containing defects such as these is not in the best interest of the prospective regional center or the USCIS EB-5 program as the end result will most likely be the denial of the individual alien investor’s Form 1-526 petition.

Each alien investor must file an individual Form 1-526 petition to establish his or her eligibility for classification as an EB-5 alien investor under either the Basic Program or the Regional Center Pilot Program. If the Form 1-526 petition is approved, then the alien should file a Form I-485, Application to Register Permanent Residence or Adjust Status, to adjust status in the United States, or apply for an immigrant visa abroad, in order to obtain CPR status. The alien investor must file a Form 1-829 petition within the 90-day period immediately preceding the two-year anniversary of his or her admission to the United States or adjustment of status as a CPR. The Form I-829 petition must demonstrate that all of the terms and conditions of the EB-5 program have been met by the alien investor in order for the conditions on his or her permanent residence to be removed.