EB-5 Definitions EB-5 Terminology

Because it is situated at the nexus of economics and immigration, the EB-5 visarequires an understanding of both business and immigration law. These areas of the U.S. legal system, like all areas of the law, include their own terminology with very specific definitions. We’ve compiled a list of the most important terms and definitions you’ll come across in your business, investment, immigration, and EB-5 visa research.


In its statute-based descriptions of and regulations governing the EB-5 visa, U.S. Citizenship and Immigration Services (USCIS) includes precisely defined terminology. Below are the main terms, accompanied by their 8 C.F.R. § 204.6(e) definitions.


Refers to 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 of § 203(b)(5) of the Immigration and Nationality Act (INA).

Plainly stated, EB-5 applicants should invest the entire qualifying amount themselves, without using any promissory notes. However, they are permitted to borrow money from banks by putting up their own personal assets, such as real estate properties, expensive jewelry, etc., as collateral. They are not permitted to borrow the money using the very business into which they make the investment.

Commercial enterprise

Refers to 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. This definition shall not include a noncommercial activity such as owning and operating a personal residence.

Statutory amendment has reaffirmed (as if it was not already clear from the above regulatory language) that a limited partnership formed pursuant to Uniform Limited Partnership Act of the state should qualify as a "commercial enterprise," and Matter of Izummi, one of the precedent AAO [USCIS Administrative Appeals Office] cases, has made it clear that the commercial enterprise can engage in lending activity in the context of a regional center—meaning [that] in a regional center, a limited partnership can be formed, pursuant to the Uniform Limited Partnership Act, to act as a commercial enterprise and carry on the commercial activities required in making investment loans to a third-party entity that is actually responsible for the creation of new jobs.


Refers to an individual who provides services or labor for the new commercial enterprise and who receives wages or other remuneration directly from the new commercial enterprise. In the case of the Immigrant Investor Pilot Program, "employee" also means an individual who provides services or labor in a job which has been created indirectly through investment in the commercial enterprise, or induced by it. This definition shall not include independent contractors.

Basically, this definition excludes free-lancers or independent contractors who work for themselves.

Full-time employment

Refers to 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 through revenues generated from increased exports resulting from the Pilot Program that requires a minimum of 35 working hours per week. A job-sharing arrangement whereby two or more qualifying employees share a full-time position shall count as full-time employment provided the hourly requirement per week is met. This definition shall not include combinations of part-time positions, even if, when combined, such positions meet the hourly requirement per week.

Subsequent statutory amendment has clarified that "full-time" denotes "employment in a position that requires at least 35 hours of service per week at any time, regardless of who fills the position." This is a noticeably vague conception that seems to effectively prioritize the quantity of work performed over the performer of the work.

High employment area

Refers to part of a metropolitan statistical area (MSA) that, at the time of investment is:

  1. Not a targeted employment area (TEA); and

  2. An area with an unemployment rate significantly below the national average unemployment rate.


Refers to the activity of contributing capital. A contribution of capital in exchange for a note, bond, convertible debt, obligation, or any other debt arrangement between the alien entrepreneur and the new commercial enterprise does not constitute a contribution of capital for the purposes of this part.

In other words, an investor individually cannot lend money to the new commercial enterprise. Accordingly, the alien must invest the requisite amount into the entity formed to act as a new commercial enterprise.


Refers to a business’s having been established after November 29, 1990.

Qualifying employee

Refers to a U.S. citizen, a lawfully admitted permanent resident, or any other immigrant lawfully authorized to be employed in the United States, including, but not limited to, a conditional resident, a temporary resident, an asylee, a refugee, or an alien remaining in the U.S. under suspension of deportation.

This definition does not include the alien entrepreneur, the alien entrepreneur's spouse or children, or any nonimmigrant alien. Accordingly, the alien’s relatives cannot count for the purposes of satisfying the minimum 10 jobs created.

Regional Center

Refers to any economic unit, public or private, which is involved with the promotion of economic growth, including increased export sales, improved regional productivity, job creation, and increased domestic capital investment.

Subsequent statutory amendment deleted the “increased export sales activities” provision, and clarified that any investments into the region that lead to job creation suffice.

Rural area

Refers to any area not within either a metropolitan statistical area (as designated by the Office of Management and Budget) or the outer boundary of any city or town having a population of 20,000 or more.

Targeted employment area

Refers to an area which, at the time of investment, is a rural area or an area which has experienced unemployment of at least 150 per cent of the national average rate.

Troubled business

Refers to a business that has been in existence for at least two years, has incurred a net loss for accounting purposes (determined on the basis of generally accepted accounting principles) during the 12- or 24-month period prior to the priority date on the alien entrepreneur's Form I-526, and the loss for such period is at least equal to 20 percent of the troubled business's net worth prior to such loss. For purposes of determining whether or not 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.


Because the statutory definitions above do not necessarily encompass all (or even most) of the frequently used terminology in business, immigration, and EB-5 petitions, we’ve compiled a list of additional concepts and defined them below:

Accredited investor

Investors permitted to invest in certain types of higher-risk investments as determined by the Securities and Exchange Commission (SEC). Accredited investors must meet one of three conditions: they have a net worth exceeding $1 million; they have a net income exceeding $200,000 for the previous two fiscal years, and are expected to continue receiving this amount during the following year; or along with their spouse, they have a joint income exceeding $300,000 for the previous two fiscal years, and expected to receive this amount during the following year.

A non-accredited investorrefers to an individual who does not meet any of the three SEC criteria above.

Actual (or Real) Project

Term used by USCIS to describe projects related to applications for regional center designation, which includes Form I-924 and Form I-526. In sum, these materials include all documents and forms except information on the source of funds and the investor’s personal documentation. The advantage in filing an actual project as opposed to a hypothetical project is that it eases the requirements of future I-526 applications, as USCIS gives preference to future I-526 applicants when the regional center designation is an actual project.

Adjustment of Status

The process used by intending immigrants already in the U.S. on a valid visa to become conditional legal permanent residents based on pending or approved immigrant petitions. EB-5 investors who reside in the U.S. and have approved Form I-526 may apply for adjustment of status with Form I-485. Additionally, their immediate family members, i.e. spouses and unmarried children under the age of 21, may themselves apply concurrently based on the principal alien’s approved I-526.
(For more information, refer to processing time below.)

Business plan

The written description of a business’s future strategy. A written business plan is a requisite component of Form I-526(Immigrant Petition by Alien Entrepreneur) andForm I-924 (Application for Regional Center Designation Under the Immigrant Investor Program).

Conditional permanent resident

In the context of EB-5 visas, foreign investors first receive conditional permanent residency (as opposed to unconditional permanent resident status). Status is conditional on the creation or maintenance of 10 full-time jobs for qualifying U.S. workers as a product of the alien’s investment within two years of receiving an approved I-526. If this condition is met, investors can and should apply to remove conditions on their status 90 days before the second anniversary of their permanent resident status with Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status. If this condition is not met, conditional permanent residency will expire, and the investor will therefore no longer be in valid, lawful status in the U.S.

Consular processing

The process used by intending immigrants and nonimmigrants to receive visas while overseas. Typically, consular processing involves an interview at a U.S. consulate or embassy, submission of biometric data, a medical examination, and paperwork. For EB-5 intending immigrants who reside abroad, consular processing is required before entrepreneurs receive their EB-5 visa. Without an EB-5 visa, intending investor immigrants cannot enter the U.S. as conditional permanent residents.
(For more information, refer to processing time below.)

Cut-off date

Term for visa bulletin dates that determine, in conjunction with the priority date, the availability of visas for a given category. In effect, the cut-off date amounts to a “currently serving” number for an immigrant in the proverbial line waiting for visas. To have an available visa in a given category, the cut-off date must fall on or before the priority date. As of March 2017, the only immigrant group for which there is a cut-off date in the EB-5 category is mainland-born Chinese nationals; their cut-off date is May 22, 2014.

Derivative beneficiary

Refers to relatives of the principal beneficiary who are also eligible for the same immigrant benefits, but who were not themselves petitioners in the original immigrant application. We can illustrate this concept through an example:

Dr. Bisma Butt is the principal beneficiary of an EB-5 (Form I-526) petition. Dr. Butt’s spouse and children are permitted to accompany her to the United States, either through consular processing (if they’re abroad) or through adjustment of status (if they’re already in the U.S.) once Dr. Butt’s Form I-526 is approved. Dr. Butt’s relatives would be approved as derivative beneficiaries of her EB-5 application.

Direct investment

Refers to an investment into a business by an individual or corporation by purchasing or expanding the business. In the context of EB-5, direct investment is one of two investment options available to applicants; the other is investment in a regional center. The processes entailed in direct investment and regional center investment are identical, with the exception of the job creation requirement. Further, an EB-5 petitioner making a direct investment must engage in the daily management of the enterprise, whereas investors in regional centers are permitted to take on comparably more passive roles.

Due diligence

Refers to the process of inspection that a venture capital or other private equity firm carries out before closing on a deal.


Refers to the area of studies, or field of scholarship, focusing on the production, consumption, and transfer of material goods and wealth.


Professional name given to an expert concerned with the relationship between society’s resources and production. In the EB-5 context, an economist is required in order to establish a regional center, as he or she provides the enterprise seeking regional center designation with an analysis of its job creation projections, fund flows, and other similar metrics.

Equity model

Refers to the method used to determine the value of shares issued by a company. In the EB-5 context, an entrepreneur who has invested in a business is an equity holder of said business.


A bond, deed, or other document kept in the custody of a third party, taking effect only when a specified condition has been fulfilled. In the EB-5 context, the investment capital is usually held in an escrow account pending the intending immigrant’s I-526 application approval. Once the application is approved, the funds are released from escrow to the targeted business enterprise.

The person or entity responsible for facilitating the transfer of property from one party to another is known as an escrow agent. In the EB-5 context, the escrow agent handles the escrow agreement and is responsible for releasing the investment funds upon the approval of the intending immigrant’s I-526 application; alternatively, the escrow agent returns the funds to the investor if the I-526 is denied.

The document that delineates the terms of the escrow between the investor and the targeted business enterprise is known as an escrow agreement.The escrow agreement names the escrow agent, on what conditions the funds will be released or returned, fees associated with the functions, jurisdiction in case of legal action, etc.

Fund flow chart

Depiction of net cash in and outflow of financial assets; typically measured by month or quarter. A fund flow chart or similar diagram is required in Form I-924 regional center applications to illustrate the forecasted flow of funds from the regional center to the local economy.

Hypothetical project

Term used by USCIS to describe Form I-924 regional center applications that do not include any specific project documents with the application. USCIS instead examines project documentation during the Form I-526 immigrant investor application stage, making the I-526 applications more complex and time-consuming. That said, the plus side is that applications for regional center designation as hypothetical projects require less initial documentation and can more easily receive initial approval.


Form I-526, Immigrant Petition by Alien Entrepreneur, is used by foreign entrepreneurs who wish to immigrate to the U.S. by making direct investments in a commercial enterprise or by investing in regional centers. Once Form I-526 is approved, investors can apply for conditional permanent resident status using Form I-485 or may undergo consular processing to receive a visa (if residing abroad).


Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, is filed by EB-5 conditional permanent residents to remove the conditions on their status; it must be filed 90 days prior to the second anniversary of their permanent resident status. The removal of conditions (and continuance of permanent resident status) is contingent upon the job creation requirement of the EB-5 visa application.


Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program, is used by prospective regional center entrepreneurs to designate a business entity as a USCIS-approved regional center so that said entity can thereby receive investments from EB-5 petitioners. Regional center applicants must include or demonstrate four criteria: describe the defined geographical area and explain how the regional center will promote economic activity within the region; evidence how the regional center will create jobs, either directly or indirectly, through economic models and other forecasts; use statements to show the amount and source of capital funds invested in the regional center; and deploy detailed projections showing, overall, how the regional center will positively affect its local economy and employment levels, as well as the nation’s at large.


Once the underlying I-924 is approved, the now-designated regional center must file Form I-924A annually to demonstrate their continued eligibility for this designation. Submission of an I-924 requires a filing fee of $3,035, and in the application, the regional center must provide information showing its sustained promotion of economic growth, improved regional productivity in the defined geographic area, job creation, and increased domestic capital investments in its location. [8 C.F.R. §204.6(m)(6)]. Additionally, the regional center should document all approved Form I-526 and Form I-829 applications; the aggregate capital invested; the number of jobs created; information on all investors; and the regional center’s administrative structure and methodologies. If the regional center fails to adequately demonstrate these I-924A requirements, or if USCIS concludes that the regional center “no longer serves the purpose of promoting economic growth,” then USCIS has the authority to terminate the regional center.

Immigrant visa

In contrast to a nonimmigrant visa, an immigrant visa allows a foreign-born alien to enter or remain in the U.S. as a legal permanent resident. EB-5 investors who reside abroad will receive an immigrant visa when they undergo consular processing (based on approved Form I-526). The visa allows the immigrant to enter the U.S. Once in the country, a conditional permanent resident green card will be mailed to the investor’s place of residence in the U.S.

Immigration quota

Refers to the cap on the number of visas that can be issued. Various factors are at play in quotas, including the intending immigrant’s country of origin, the type of visa for which the alien applied, and for family-based petitions, the type of relationship between the immigrant and corresponding U.S. citizen or legal permanent resident. The EB-5 category allocates 10,000 visas annually. This cap has not been met for any nationals, with the exception of aliens born in mainland China, and when a cap has been reached, then cut-off dates apply. As of June 2017, the only immigrant group for which there is a cut-off date in the EB-5 category was still mainland-born Chinese nationals; their cut-off date was then June 8, 2014.

Investment capital

Refers to the total cash investment made into a business.


The most important requirement for the EB-5 visa. Depending on the location of investment, jobs can that satisfy this requirement can be direct or indirect.

A direct job is an identifiable employment position for qualifying employees created by and housed within the commercial enterprise.
Anindirect job is an employment position created as a result of the commercial enterprise’s ongoing lawful business activity.
An induced job is created within the greater community where the commercial enterprise is located, which comes about as a result of, for instance, income spent by EB-5 project employees.
(For more information, see qualifying employee below.)

Liquid assets

Refers to assets either in the form of cash or in forms easily convertible into cash.

LLC (Limited Liability Company)

A business structure combining the characteristics of a corporation and a partnership to create an unincorporated association. The “limited liability” qualifier refers to the fact that a person’s financial liability is limited to a fixed sum, which is usually the amount of the individual’s investment in the company. In contrast, sole proprietors and general partners have unlimited liability with respect to the debts of their businesses.

Loan model

A popular operating model for EB-5 investors where funds are placed into an established limited partnership instead of directly into a project. The limited partnership serves to issue units to entrepreneurs for their investments, and then loans out the investment capital to the project.

LP (Limited Partnership)
Refers to a business structure with a partnership agreement in which only one partner is needed to be the general partner, with others serving as limited partners; there can be more than one general partner. General partners have management control, may use partnership property, share in the company’s profits, and are liable for the debts of the partnership. Limited partners are liable for debts only up to the amount they personally invested.

Market analyst

A professional who studies conditions affecting markets, such as the stock market.

Models, Economic

Refers to the analytical tools used by EB-5 investors to demonstrate their investment’s economic impact on the region where their enterprise operates. Common economic models include:

IMPLAN (Impact Analysis for Planning), a modelused to account for all dollar flows between economic sectors in a given region in order to estimate the total economic implications of certain economic activity. IMPLAN employs localized models to forecast specific economic consequences of business transactions in an enterprise’s geographic region.

REDYN (Regional Dynamics Economics Analysis), a model used to analyze the economic impact of investments and other economic activity. REDYN employs data and metrics from financial, budgetary, and other economic influences at varying levels (i.e. local, regional, and national) in order to create long-term economic forecasts. Said data are from public and private sources, updated annually.

REMI (Regional Economic Models, Inc.), an economic forecasting and policy analysis tool used for economic projections of investments. REMI relies on input-out; general equilibrium, econometric, and economic geography approaches in order to determine varying economic forecasts.

RIMS II (Regional Input-Output Modeling System), an economic model used to estimate an increase in economic activity in a given geographical area based on industries located in the area. RIMS II employs input-output multipliers to forecast industry-supplied increases in economic activity.

NAICS (North American Industry Classification System)
Refers to the database used by public and private sector entities to classify, typically numerically, businesses according to the type of economic activity in which they engage. Applications for regional center designation require a list of all applicable NAICS classifications.

Offering document

The legal document containing a PPM, escrow agreement, partnership agreement, subscription agreement, and prospectus, among other relevant documentation, that is provided to potential investors as an informational memorandum. The offering document also protects the enterprise seeking investments from liabilities.

Partnership agreement

Term referring to the contract between two or more parties, including one or more general partners and one or more limited partners, that settles on issues related to pooling their capital, labor, and skills. In a partnership agreement, the profits and losses of the associated business are shared equally among the partners.

PPM (Private Placement Memo)

Refers to a disclosure document that describes financial security to potential buyers, provides investors with material information about investments, and includes a description of the company's business and finances. A PPM’s purpose in the EB-5 context is to comply with securities laws and protect investors by making transparent and available to them important information on the targeted investment company. In practice, a PPM also protects the business seeking investments by distributing information on the risks associated with potential investment.

Private equity advisor

Usually, an outside firm hired by an institutional investor to handle the selection, negotiation, and monitoring of private equity funds.

Principal beneficiary

Refers to the primary, or leading, immigrant for which a petition was filed. For example, an EB-5 investor would be the principal beneficiary for a Form I-526 application, and the investor’s spouse and/or unmarried children under the age of 21, if any, would be derivative beneficiaries.

Priority date

For employment-based and some family-based immigration petitions, refers to the date USCIS notes its receipt of an application. The priority date determines when a visa is or will be available for an intending immigrant; as such, it essentially marks an intending immigrant’s place in line. Currently, priority dates for the EB-5 category are current for all nationals except for aliens born in mainland China.

Private placement

Refers to the sale of securities to a select few investors in order to raise capital. In the EB-5 context, refers to the sale of securities, such as private stocks or bonds, in exchange for their investment in the business enterprise.

Processing time

Denotes the time USCIS takes to process, receive, and adjudicate a visa application. Processing times vary by application type.


Refers to a legal document required to be filed with the SEC that explains in detail public investment opportunities offered by the enterprise; and contains all pertinent and necessary information for investors such that they are able to make an informed decision on the question of investment.

Relative return

The return an asset achieves over time.

Regional center amendment

Refers to when a regional center must file an amended Form I-924, which is the case when a regional center seeks a change in any of the following areas: geographic location; organizational or administrative structure; affiliated commercial enterprise investment opportunities (which would change the economic analysis and business plan used to estimate job creation in the previously approved investment opportunities and industrial clusters); affiliated commercial enterprise’s capital investment instruments or offering memoranda. Alternatively, a regional center amendment can be filed in order to obtain a preliminary determination of EB-5 compliance using documentation provided with an exemplar Form I-526, prior to the individual alien entrepreneur’s filing Form I-526.

(For more information, refer to I-924A above.)

Regional center annual report

Refers to the requirement that regional centers demonstrate their continued eligibility for this designation by filing Form I-924A each fiscal year. Failure to file the annual report could result in the termination of regional center designation for the enterprise. The annual report should contain the following: the aggregate amount of EB-5 alien capital invested; the aggregate number of direct or indirect jobs created by the EB-5 investment(s); the aggregate number of jobs maintained by the EB-5 investment(s); the industry or industries that are the focus of EB-5 capital investment; information on all job-creating enterprises located within the regional center’s geographic area that have received alien investor capital; the total number of approved, denied, and revoked Form I-526 applications filed by alien investors within the regional center; and the total number of approved, denied, and revoked Form I-829 petitions filed by alien investors within the regional center.

(For more information, refer to I-924A above.)

Request for Additional Evidence (RFE)

Refers to a USCIS response upon receipt and review of a petition that informs the petitioner and his or her attorney that the evidence provided is insufficient to warrant a favorable decision. RFEs denote specifically what the application lacks, and ultimately allows the applicant to provide the additional documentation needed by USCIS to render a decision. For EB-5 Form I-526 applications, the most common RFE seeks to verify that the investment funds were lawfully obtained.

SEC (Securities and Exchange Commission)

Agency of the U.S. government with purview over enforcing federal securities laws and regulating the securities industry, stock and options exchanges, and other related activities and organizations.


Refers to a tradable asset, such as a stock, bond, membership, unit, or cash. In the EB-5 context, a security is exchanged for investment in the commercial enterprise. The security is the instrument through which an investor seeks a non-guaranteed return on his or her investment.

Shareholder agreement

Refers to the contract among shareholders in a given corporation or incorporation that agrees to regulate the exercise of their rights as shareholders, both among other shareholders individually and between shareholders and the company.

Subscription agreement

In the EB-5 context, refers to the agreement between direct investors as an act of limited partnership to exchange investment capital with a specified number of the company’s shares.

Target company

Term typically used in the context of a merger, refers to the company that will be acquired or absorbed by another business enterprise (usually relating to direct investment).

Timeframe (with regard to job creation)

Refers to the job creation requirement EB-5 investors must satisfy, which is that their investment created, maintained, or induced 10 full-time jobs within two years of their Form I-526 approval. Since the timeframe for satisfying this condition begins six months after I-526 approval, EB-5 investors effectively have a 30-month period to create or maintain 10 full-time jobs (but should still satisfy it within 24 months).

For more detailed information about the EB-5 visa, refer to the following links:

Updated 06/09/2017