The EB-5 Investment Visa provides flexible options to obtain a permanent resident visa. Foreign investors can invest into any type of for-profit lawful business entity. The structures of the business entity can be any of the following for-profit business categories:
New Business Enterprise
Any for-profit lawful business entity is considered a commercial enterprise. In order for an enterprise to be “new,” it must have been created after November 29, 1990. There are four types of sub avenues classified as new business enterprises.
Creating a new business: Based on a 1998 precedent, an EB-5 investor was required to be present at the creation of an enterprise. However, this was problematic for businesses created under a partnership model. A partnership is typically formed first among the main partners and then other limited partners are sought afterwards. Because of the 1998 precedent, such limited partners could not qualify for an EB-5. In 2002, Congress overruled this decision, only requiring a petitioner to show that he or she has invested the required amount.
Buying an existing business: An EB-5 investor can restructure an existing business. USCIS does not consider merely changing the legal structure of an enterprise sufficient. There is only one known case of a petitioner showing that an enterprise was materially changed enough to receive approval.
Expanding an existing business: An EB-5 investor can also create a “new” business by expanding an existing one. Through this avenue, an EB-5 investor must either expand the net worth of an existing business or the number of employees by 40%. If an investor chooses to increase the number of employees, he/she could be required to create more than 10 jobs; the larger the number of existing employees, the more of a burden this becomes.
Pooling: Multiple EB-5 investors can combine their money to invest in an enterprise. All investors must infuse the required amount into an enterprise and create at least 10 jobs. All jobs created by a pooling arrangement will be distributed evenly among investors. For example, if there are 3 investors and only 21 jobs are created, this does not mean that 2 of the investors created 10 jobs each and the third investor only created one job. It means that all three investors created 7 jobs a piece.
The definition of a troubled business is one that has existed for a minimum of 2 years. Furthermore, this business must have incurred a net loss for the 12 to 24 month period before you file Form I-526. This loss must be equal to at least 20 percent of the business’s total net worth.
General Requirements for Troubled Businesses
Regional Center Pilot Program
To encourage immigration through investment and to concentrate investment in specific regions, Congress directed USCIS to set aside 3,000 visas for people who invest in a designated “Regional Center Program.” A “Regional Center” is a designation granted by USCIS on the basis of a proposal for economic growth in the particular geographic area. Approximately 90-95% of EB-5 applications submitted to USCIS fall into this category. Originally, Congress set a date for the Regional Center Pilot Program to sunset in March 2009. However, that date was extended to September 2009 and finally, to September 30, 2012.
The following are some typical Regional Center Programs: a real estate limited partnership program that offers investment in industrial properties in a specified major city, a limited partnership program that makes low interest loans to businesses in a specified major city, ownership of an 80-acre almond farm in a specified location in California.
(Updated 10/5/2012 by AG)
For more information on the EB-5 Visa, please refer to the following links: