EB-5 Immigrant Investor Program
All EB-5 investors are required to invest in a new commercial enterprise, which encompasses any for-profit endeavor conducted lawfully, including:
Sole proprietorship; Partnership (both limited and general); Holding company and its wholly owned subsidiaries (provided each subsidiary engages in lawful for-profit activities); Joint venture; Corporation; Business trust; Limited liability company; or Other entities, whether publicly or privately owned. Notably, this definition excludes non-commercial activities such as personal residence ownership and operation.
The commercial enterprise must be
- Established after November 29, 1990; or
- Established on or before November 29, 1990, but meeting one of the following conditions:
- Purchased and restructured or reorganized in a way that results in a new commercial enterprise; or
- Expanded through the investment, resulting in at least a 40% increase in net worth or the number of employees.
Capital Investment
Requirements Capital encompasses cash and all tangible assets, whether real, personal, or mixed, owned and controlled by the immigrant investor. The valuation of all capital is based on its fair-market value in U.S. dollars.
Capital does not include:
- Assets obtained through unlawful means, such as criminal activities;
- Investments exchanged for notes, bonds, convertible debts, obligations, or other debt arrangements between the immigrant investor and the new commercial enterprise;
- Investments guaranteeing a predetermined rate of return;
- Investments subject to agreements between the immigrant investor and the new commercial enterprise granting the investor a contractual right to repayment, except in cases where the new commercial enterprise holds a buyback option exercisable solely at its discretion.
Note: Immigrant investors must demonstrate legal ownership of the invested capital. This can include a promissory note under certain circumstances.
The minimum investment amounts based on the filing date and investment location are as follows:
Filing Date: Before 3/15/2022
Minimum Investment Amount: $1,000,000
Targeted Employment Area (TEA) Investment Amount: $500,000
High-Employment Area Investment Amount: $1,000,000
Filing Date: On or After 3/15/2022
Minimum Investment Amount: $1,050,000
Targeted Employment Area (TEA) Investment Amount: $800,000 (includes infrastructure projects)
High-Employment Area Investment Amount: N/A
Regional center investors have the option to invest in infrastructure projects, which are capital investment initiatives outlined in a filed or approved business plan. These projects are overseen by governmental entities, such as federal, state, or local agencies, contracted as the job-creating entity with the regional center or new commercial enterprise. These projects involve maintaining, improving, or constructing public works and may include unused set-aside visas, which are held for an additional fiscal year in the same category. After the second fiscal year, any remaining unused visas in these categories are released to the unreserved EB-5 immigrant visa numbers during the third fiscal year.
Job Creation Requirements
An EB-5 investor is required to invest the specified capital amount in a new commercial enterprise that will generate full-time positions for at least 10 qualifying employees.
For a new commercial enterprise situated outside a regional center, the creation of full-time positions must be direct, meaning the enterprise (or its wholly owned subsidiaries) must directly employ the qualifying individuals.
For a new commercial enterprise within a regional center, the creation of full-time positions can be direct or indirect. Regional center investors may use up to 90% indirect jobs to meet the job creation requirement.
Direct jobs establish an employer-employee relationship between the new commercial enterprise and its employees. Indirect jobs are created outside the enterprise but are a result of its operations.
In the case of a troubled business, the EB-5 investor can rely on job maintenance, demonstrating that the existing employee count will remain at or above the pre-investment level for at least two years.
A troubled business is one that has operated for at least two years and has suffered a net loss during the 12- or 24-month period preceding the immigrant investor's Form I-526 priority date, with the loss amounting to at least 20% of the business's net worth prior to the loss. Successors in interest to the troubled business are considered for the same duration assessment.
A qualifying employee is defined as a U.S. citizen, lawful permanent resident, or other immigrant authorized to work in the United States. This excludes immigrant investors, their immediate family members, and non-citizens in non-immigrant statuses or unauthorized to work in the U.S.
Full-time employment denotes employment of a qualifying employee in a position requiring a minimum of 35 working hours per week. In the regional center program, full-time employment includes positions created indirectly and also requiring 35 working hours per week.
Job-sharing arrangements are acceptable, where two or more qualifying employees share a full-time position meeting the weekly hour requirement. However, combining part-time positions, even if meeting the weekly hour requirement, does not qualify. Intermittent, temporary, seasonal, or transient jobs are also excluded, except those expected to last at least two years.
This is for information purpose only. If you feel you qualify under this section, please contact us and we will be more than happy to discuss your case.