EB-5 Program

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.  EB-5 petitioners will receive a US Green Card for themselves and immediate family members, if they make a minimum investment in a new business that creates 10 new full-time jobs, or in a troubled business, while preserving existing jobs.  The program also has an alternative structure, whereby an investment can be made through a “Regional Center.”  This structure has different requirements, and BHC does not utilize this structure.

As one can imagine, there is a fair amount of complexity to the program.  The following are some of the program elements:

Business Requirements

The business must be a New Commercial Enterprise, which is a commercial enterprise:

• Established after Nov. 29, 1990, or
• Established on or before Nov. 29, 1990, that is:
• Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or
• Expanded through the investment so that a 40-percent increase in the net worth or number of employees occurs

A Commercial Enterprise is any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to:

• A sole proprietorship
• Partnership (whether limited or general)
• Holding company
• Joint venture
• Corporation
• Business trust or other entity, which may be publicly or privately owned

This definition includes a commercial enterprise consisting of a holding company and its wholly owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business.

Note: This definition does not include noncommercial activity such as owning and operating a personal residence.

Job Creation Requirements

The key motivation for creating the EB-5 program was foreign investment that leads to job creation.  As a result, this element is a critical component of the program.  The requirements are:

• Create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years (or under certain circumstances, within a reasonable time after the two-year period) of the immigrant investor’s admission to the United States as a Conditional Permanent Resident.
• Create or preserve either direct or indirect jobs:
  • Direct jobs are actual identifiable jobs for qualified employees located within the commercial enterprise into which the EB-5 investor has directly invested his or her capital.
  • Indirect jobs are those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a Regional Center by an EB-5 investor.  A foreign investor may only use the indirect job calculation, if affiliated with a Regional Center.  Note:  BHC does not utilize the Regional Center structure.  It is only discussed here for completeness.

Note: Investors may only be credited with preserving jobs in a troubled business.

A troubled business is an enterprise that has been in existence for at least two years and has incurred a net loss during the 12- or 24-month period prior to the priority date on the immigrant investor’s Form I-526.  The loss for this period must be at least 20 percent of the troubled business’ net worth prior to the loss.  For purposes of determining whether the troubled business has been in existence for two years, successors in interest to the troubled business will be deemed to have been in existence for the same period of time as the business they succeeded.

A qualified employee is a U.S. citizen, permanent resident or other immigrant authorized to work in the United States.  The individual may be a conditional resident, an asylee, a refugee, or a person residing in the United States under suspension of deportation.  This definition does not include the immigrant investor; his or her spouse, sons, or daughters; or any foreign national in any nonimmigrant status (such as an H-1B visa holder) or who is not authorized to work in the United States.

Full-time employment means employment of a qualifying employee by the new commercial enterprise in a position that requires a minimum of 35 working hours per week. In the case of the Immigrant Investor Pilot Program, “full-time employment” also means employment of a qualifying employee in a position that has been created indirectly from investments associated with the Pilot Program.

A job-sharing arrangement whereby two or more qualifying employees share a full-time position will count as full-time employment provided the hourly requirement per week is met. This definition does not include combinations of part-time positions or full-time equivalents even if, when combined, the positions meet the hourly requirement per week. The position must be permanent, full-time and constant. The two qualified employees sharing the job must be permanent and share the associated benefits normally related to any permanent, full-time position, including payment of both workman’s compensation and unemployment premiums for the position by the employer.

Capital Investment Requirements

A minimum capital investment must be made under the EB-5 program.  Capital means cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness.  All capital shall be valued at fair-market value in United States dollars.  Assets acquired, directly or indirectly, by unlawful means (such as criminal activities) shall not be considered capital for the purposes.

Required minimum investments are:

• The minimum qualifying investment in the United States is $1 million, unless reduced by the following provision.
• Within a Targeted Employment Area (High Unemployment or Rural Area), the minimum qualifying investment is $500,000.  Note:  BHC does not limit itself to TEA’s and as a result, we do not accept this reduced minimum requirement.

A targeted employment area is an area that, at the time of investment, is a rural area or an area experiencing unemployment of at least 150 percent of the national average rate.

A rural area is any area outside a metropolitan statistical area (as designated by the Office of Management and Budget) or outside the boundary of any city or town having a population of 20,000 or more according to the decennial census.

The Process

While the requirements of the EB-5 program are fairly involved, the application process itself is fairly straightforward.

1. Identify an investment opportunity that meets your requirements.  As discussed throughout this site, an investment through BHC is designed to not only meet the minimum requirements of the EB-5 program, but it is also designed to generate above market returns.  We would be happy to discuss our investment opportunities with your financial advisors, and encourage you to conduct your own due diligence.  We are confident that once you compare opportunities, the advantages to investing through BHC will be clear.
2. Engage an immigration attorney to review your personal circumstances and prepare your application.  One of the program requirements, as discussed above, is that the investment capital must have been acquired through legal means.  Your application will require documentation tracing the history of the funds.  Your attorney will be able to advise you on this matter.  BHC believes that every investor should have their own attorney to represent their interests.  As a result, we do not require you to use one of our attorneys.  If you require assistance in finding representation, BHC maintains a list of reputable firms, and we would be happy to make a recommendation.
3. Once you and your advisors are ready to commit to an investment, you will sign the Investment Agreement and deposit your funds into an escrow account with a recognized international financial institution.  The funds will be held in this account until the USCIS has approved your application.
4. Your immigration attorney will prepare and file form I-526 Petition for Alien Entrepreneur with the USCIS.  This petition requests USCIS to certify the applicant and the investment as eligible for EB-5 status.
5. Upon approval of the Petition, (a) if you are in the United States, you may apply for Adjustment of Status to Conditional Resident status. (b) If you are abroad, you must wait for notification from the National Visa center to prepare documents for the Immigrant Visa interview at the U.S. Consulate or Embassy in your home country.  The purpose of the Adjustment of Status or Immigrant Visa interview is to ensure you are not subject to grounds of exclusion, e.g. a criminal past, infectious diseases, etc.
6. Once granted conditional resident status, wait 21 months to reconfirm that the full investment has been maintained and 10 jobs created (if required, based on type of investment).
7. Your attorney will then file an application to remove conditional resident status (Form I-829) between 21 to 24 months after Conditional Resident status is approved.
8. Once conditional resident status is removed, a full Green Card is granted for indefinite permanent resident status and work permission in the United States.  US Citizenship is possible 4 years and 9 months later, upon satisfaction of residence and other criteria.