DC EB-5 Visa Lawyer

The EB-5 Visa was created by Congress in 1990 as a path to legal residency for foreign individuals who wished to enter the U.S. to engage and invest a considerable amount of capital into a commercial enterprise which would benefit the U.S. economy and create American jobs. Below we review some of the information and application procedures for EB-5 visas, but if you have any questions, please contact an EB-5 visa lawyer in DC.

Visas for Investors and Job Creators

Generally, the threshold amount an individual must invest is $1 million, although that amount is reduced to $500,000 if the investment is made in a specific geographical location deemed a “targeted employment area.” The enterprise must also generate employment for at least 10 U.S.-based workers.

Due to the rigorous application process and documentary requirements, the EB-5 visa is relatively rare. Despite the government’s allowance of 10,000 visas per year, there were never more than 1,600 EB-5s issued in any one year by USCIS prior to FY 2011. However, the EB-5 is increasing in popularity as other employment-based methods of U.S. immigration experience extreme backlogs, and the number of approvals more than doubled in FY 2012, when the USCIS approved a record 3,677 applications.

Two-Track System

There are two potential “tracks” on which an investor may choose to apply for an EB-5 visa. First is the traditional program, which has four basic requirements: 1) the individual must invest at least $1 million (or $500,000 in certain targeted geographical areas), 2) the investment must generally benefit the U.S. economy, and 3) the investment into the enterprise must create 10 full-time jobs.

The second track, called the “pilot program,” is short for the “Investor Visa Pilot Program,” created in 1993 to encourage investment in “designated regional centers,” which is defined by USCIS as “any economic unit, public or private, which is involved with the promotion of economic growth, including increased export sales, improved regional productivity, job creation, or increased domestic capital investment.”  If a city or region wants to define itself as a “regional center,” it must file for that designation with the USCIS California Service Center.  The pilot program was initially only a temporary program to initiate foreign investment in targeted regions, but it has been extended a number of times and the current sunset date is September 30, 2015.

The main difference between the pilot program and the traditional program is that the pilot program does not require that the immigrant investor’s enterprise itself employ 10 U.S. workers. Instead, it is enough if 10 or more jobs will be created directly or indirectly as a result of the investment.

Requirements of the EB-5

There are no restrictions as to who may apply for an EB-5 visa, though the applicant will be subject to the same grounds of admissibility as any other immigrant (i.e. they could be barred from entering the U.S. if they have certain serious criminal convictions or prior immigration violations.)  Also, immigrants can pool their capital together into a single investment, but each individual investor must contribute the required amount, and must be able to attribute their investment to the creation of 10 jobs. The government will also undergo a process to verify that the funds used for the investment were acquired by lawful means.

The investment must create a “new commercial enterprise”

It is not enough to merely buy stock or otherwise invest in any already-existing company.  The investment must be made in a “new commercial enterprise.” There are two basic requirements that every EB-5 enterprise must meet:

1) The enterprise must have been formed after November 29, 1990 (the date the EB-5 was established), and

2) the enterprise must be commercial in nature. The definition of “commercial” is quite broad, and generally only excludes noncommercial activity such as owning or operating a personal residence or nonprofit enterprise.

If an investor does not wish to create his/her own new enterprise, he may expand an existing business. However, in order to qualify as a new enterprise, the investment must expand the business’ net worth by at least 40%, or increase the total number of employees by 40%. Depending on how many employees the business previously had, this could mean the investor would be responsible for creating significantly more than 10 jobs in order to qualify.

The investor must be “engaging” in the commercial enterprise

The investor may not just invest the money and then abandon his role within the enterprise – he must continue to be involved in a managerial capacity within the organization, at a minimum in a policy-making position.

The investment must benefit the U.S. economy

There is virtually no guidance provided by the statute to define what it means to “benefit” the economy.  This means that it is the job of the USCIS adjudicator to make this determination.  On the one hand, it should be easy to argue that any commercial enterprise that creates upwards of 10 new jobs in the U.S. is beneficial to the economy as a whole. However, it is important for the applicant’s DC EB-5 visa lawyer to elucidate to the government why the enterprise will be beneficial, notwithstanding the new jobs and investment capital.

One could imagine, for example, that a consulting company headquartered in the U.S. whose main goal was to coach U.S. businesses on how to relocate overseas could be deemed non-beneficial to the U.S. economy. Generally, however, this requirement is easily met.

The investment must result in job creation

As previously discussed, the investment enterprise must create at least 10 new jobs.  The jobs created must be permanent positions, and must be full time (at least 35 hours per week).  Investors cannot count themselves, their spouses, or their children as employees, and all employees must be lawfully authorized to work within the U.S. Independent contractors, hired on a temporary basis, also do not count.

The 10 jobs need not be created immediately upon the investment being made. Instead, USCIS regulations allow for the jobs to be created “within a reasonable time” subsequent to the investment. As there is no bright line rule for what constitutes “reasonable,” the investor should operate under the assumption that it means “as soon as possible.”

In some cases, the investment may save 10 jobs, instead of creating them.  There are special provisions in place for immigrants to wish to invest in troubled businesses, whereby the investor must prove that, but for the investment, 10 jobs at an existing business would have been lost.

The USCIS defines a troubled business as one that has been in existence for at least two years and has incurred a net loss of at least 20 percent of the business’ net worth during the 12 or 24-month period before the petition.

Application Process

The evidentiary standards for the EB-5 are extremely rigorous, and generally, require legal counsel in order to prepare the application properly.  The application form itself is filed on USCIS Form I-526. If and when the application, along with all documentation, is deemed acceptable by USCIS, the I-526 will be granted and the investor will be granted “conditional permanent residence” in the U.S.  Conditional permanent residence will end after two years.  90 days before this conditional residency expires, the applicant must file a petition to remove the conditions of residence, via USCIS Form I-829.  Failure to submit the I-829 will result in termination of the investor’s status.

The I-829 removal of conditions component of the EB-5 may be simple, or it may require an additional adjudication of the case. One common sticking point is whether or not the proper number of jobs has been created.  This is because the initial I-526 can be approved when the 10 jobs have yet to be created, due to the statute’s allowance of a “reasonable time” to make the hires.  However, if the jobs were only added, for example, a month before the removal of conditions of application is filed, the applicant may run into problems proving “reasonableness.”

Benefits of an Attorney

If you have questions about or would like further information regarding the EB-5 program, please contact a DC EB-5 visa lawyer for a consultation.  They would be happy to answer any questions you may have at the onset and would be thrilled to guide you through the process from inception to your admission as a Lawful Permanent Resident.

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