Decisions and Requirements to Obtain Permanent Resident Status through the EB-5 Immigrant Investor Program

The EB-5 Visa Program is a way for foreign immigrants to gain permanent resident status in the U.S. by investing in qualifying commercial enterprises.

Although the program is popular, it’s also complicated and applicants may struggle to understand the process and meet all the requirements without support.

That’s why we’ve written this article, it explains:

✔️The EB-5 Visa Program requirements
✔️The visa application and approval process
✔️The benefits of becoming an EB-5 investor.

EB-5 Visa Program Requirements

The EB-5 Program is administered by United States Citizenship and Immigration Services (USCIS). It is sometimes referred to as the fifth-preference employment-based immigrant visa and was created in 1990 by Congress. USCIS has set out specific requirements for EB-5 investors to qualify for a visa.

They are:

✔️An investment must be made in a new commercial enterprise (NCE).
✔️The investment must be $1,050,000 (or $800,000 in targeted employment areas—more on this later in the article).
✔️The NCE must benefit the U.S. economy by creating 10 full-time jobs.
✔️The investor’s funds must be considered “at risk”.
✔️The investor must be sufficiently engaged in managing the enterprise.

This section looks at each of the above in detail.

Invest in an NCE

An NCE is any entity formed to conduct for-profit activity lawfully. Qualifying entities include publicly or privately owned:

🏢Partnerships
🏢Limited liability companies (LLCs)
🏢Sole proprietorships
🏢Holding companies
🏢Joint ventures (JVs)
🏢Corporations
🏢Business trusts

The NCE also must have been established after November 29, 1990.

EB-5 petitioners can only invest in businesses formed before this date if they have been restructured or expanded. As a result of the investment, a 40% increase in net worth or number of employees should occur.

This NCE usually invests in a separate entity that employs people in the U.S. This is known as the job-creating entity (JCE). This investment often involves providing a loan or buying equity in the JCE.

The investor or their NCE can invest in any kind of business, as long as it is either:

💸A new enterprise that will create 10 jobs
💸A failing business that will create or save 10 jobs

Invest $800,000 in a TEA

EB-5 participants must invest at least $1,050,000 in the NCE. The only exception is if they invest in a targeted employment area (TEA). This is either a rural area with a population lower than 20,000 or a non-rural area with unemployment at least 150% of the U.S. national average. TEA investments only need to be $800,000. However, they still need to generate at least 10 jobs.

Create 10 jobs

Your investment needs to create 10 full-time jobs for U.S. workers within two years of submitting your initial EB-5 petition. Critically, these jobs must be active when you submit your application for permanent residency status.

EB-5 investors can choose to invest through a regional center or make a direct investment—we’ll explain more about this later. One advantage of investing through a regional center is you can count the number of indirect jobs created by your NCE.

This is the number of jobs created through your NCE’s spending, for example by suppliers. These jobs are projected and not counted directly. Direct investors can only count jobs they create directly as part of their quota.

The job creation quota will also be affected depending on whether the EB-5 investor chooses to invest in a troubled business. This is defined as businesses that has experienced 20% or higher net loss in the past 12 or 24 months. If an EB-5 participant invests in this kind of company, they don’t need to create 10 new full-time jobs—instead, the NCE must maintain employment at the pre-investment level.

The EB-5 investor’s funds must be at-risk

Inherently, this means that there’s a chance that the EB-5 participant could lose their investment. The level of risk does not need to be high to qualify. EB-5 investors should conduct thorough due diligence on the projects or business activities they choose to invest in.

You need to ensure you’re satisfied with the level of risk your funds are at and that you are not being defrauded.

The best way to do this is to conduct thorough due diligence on any person or company you work with—even if it’s a regional center. We explain what you should consider when performing due diligence later in this article.

The investor must be sufficiently engaged in the enterprise

If you are making a direct investment, it is likely that you will manage the business directly, for example as the company president. However, if you invest via a regional center, you will usually perform a limited partner role. For example, this might involve:

🏢Helping to formulate company policies
🏢Voting on business matters

The regional center will handle the day-to-day business operations on your behalf.

Investing in an EB-5 Visa: The Process

The following is the process for obtaining a permanent green card through the EB-5 Immigrant Investor Program.

1. Choose to invest directly or through a regional center

EB-5 investors have the choice of making a direct investment into an NCE or doing it through a regional center. This is a crucial decision that all investors will have to make. A regional center is a U.S. public or private economic unit involved in promoting economic growth. They are designated as such by USCIS. The benefits of investing via a regional center include:

✔️Regional centers sponsor job-creating projects and pool investment capital from multiple EB-5 investors.
✔️A regional center will also handle most of the work involved in setting up and managing the commercial activities on behalf of the investor.
✔️Choosing to invest through a regional center means the investor can count direct and indirect jobs towards their 10-job quota.
✔️In general, investing through a regional center is better for investors who are mainly focused on gaining permanent residency status.

A direct investment, on the other hand, is where the investor makes the investment into the job-creating entity themselves. Direct investors can only count direct jobs toward their quota. Direct investment is better for those who are interested in managing a business or investment, as well as gaining permanent residency.

2. Select an EB-5 Project

Whether investing directly or through a regional center, EB-5 investors should conduct due diligence. This ensures that a prospective investment is a good match for them and meets their investment expectations.

You should consider

🔎Project’s viability: Is the business plan realistic? Will it create 10 jobs?
🔎The regional center’s track record: Has the regional center delivered successful projects in the past? Has it managed to get EB-5 petitions approved for others?
🔎The exit strategy: How will your investment be returned to you when the project is completed?
🔎Financial statements: Is the developer willing to share these with you? By reviewing a project’s financial statements, an investor is able to check for potential risks before making an investment decision.

3. Document your source of funds

EB-5 investors need to prove that their funds were legally obtained. This prevents money laundering and fraud, and ensures the integrity of the EB-5 Program.

There are three main ways to document your lawful source of funds:

📄Submit bank transfer and financial statements
📄Submit income verification from the past five years
📄Submit titles for any assets or property that you intend to sell to fund the investment

4. Make an investment

This is where you secure your financial involvement in your chosen project.

There are three main stages to this:

💸 Transfer $1,050,000 to your chosen project (or $800,000 if your project is in a TEA) through the regional center or straight to the NCE’s bank account for direct investments.
💸 Keep a bank statement or wire transfer receipt as proof of your investment.
💸 Await confirmation of the investment from the project.

5. Submit Form I-526 for the EB-5 Visa

Next, you need to submit Form I-526, Immigrant Petition by Alien Entrepreneur, for approval by USCIS. This will start the process of applying for permanent residency status. Form I-526 is where you provide evidence you have met the EB-5 program requirements.

⚠️Important note:

There are two types of I-526 form:

• The regular form I-526 is for direct investors.
• Form I-526E is for EB-5 participants investing via a regional center.

You can give your application the best chance of success by ensuring it is accurate and complete.

USCIS will:

🔎 Review your form to ensure the information you provide is accurate and valid.
🔎 Validate your source of funds.
🔎 Evaluate your proposed investment to ensure it is likely to generate 10 jobs.

6. Obtain conditional permanent resident status

Once Form I-526 is approved by USCIS, the foreign investor must apply for his or her EB-5 Visa (green card). There are two routes EB-5 investors can take:

Investors living outside the United States

Investors living outside the United States need to submit Form DS-260 to the U.S. National Visa Center. They will then be processed through the U.S. consulate or embassy in their home nation.

This involves:

• Attending an interview at the U.S. embassy or consulate.
• Undergoing a medical examination and security checks.

If your application is approved, you will be granted an immigrant visa. This enables you to travel to the United States and officially become a conditional resident upon entry.

Investors legally living in the United States

Investors legally residing in the United States under a different immigrant status must submit Form I-485 to change their status to conditional permanent resident. The EB-5 Program enables investors to obtain green cards for themselves, their spouses, and any children who at the time of filing Form I-526 are unmarried and under age 21.

The status afforded EB-5 investors at this stage is conditional and only lasts for two years.

Form I-485 can be submitted along with the I-526 petition.

7. Maintain the NCE and investment during the conditional period

A conditional Green Card lasts for two years. At the end of this period, conditions will be removed if the investor can demonstrate that the NCE they invested in, and the investment itself, were maintained and that 10 jobs have been created.

⚠️Important note: Limit travel abroad

Permanent resident status is contingent on actual residence within the United States. If the government suspects a permanent resident does not intend to reside in the United States, his or her status may be revoked.

Generally, permanent residents may spend time abroad as long as they are in the United States for at least six months per year.

Step 8: Submit Form I-829

At the end of the two-year conditional period, the EB-5 investor must submit Form I-829, Petition by Entrepreneur to Remove Conditions. This petition must be submitted within the last 90 days of the two-year period. The purpose of Form I-829 is to demonstrate to USCIS that all the requirements of the EB-5 Visa Program have been met.

The petition and its accompanying documentation must clearly show that the required amount of capital was invested in an NCE that created or sustained the necessary number of jobs to meet the employment requirement.

Once USCIS approves an investor’s I-829 petition, the investor and his or her family become lawful permanent residents.

Investing in an EB-5 Visa: The Outcome

As a permanent green card holder, you enjoy most of the rights and obligations of U.S. citizens, with a few exceptions. However, you cannot vote in federal elections, and you might be deported if you commit certain crimes or violate U.S. immigration laws.

Here are some of the benefits of being a green card holder:

Go anywhere in the U.S.

You can live, work, and study anywhere in the United States, without having to verify your legal immigration status.

Claim benefits

Green card holders who have lived in the U.S. for a certain period can qualify for federal benefits like Social Security and government-sponsored financial assistance for education.

Access more opportunities

More employment and other opportunities become available to green card holders. For example, you can work in government roles that require security clearance.

Get green cards for your family

You can also sponsor close family members for their own green cards, including spouses, children, parents, and siblings. Families of U.S. citizens will be given priority over those of permanent residents.

Maintaining your green card status

You must maintain your permanent resident status; failing to do so could result in the loss of your green card.

Here’s how:

✔️Stay in the U.S.
As a rule of thumb, green card holders must make the United States their primary residence. That means you should spend more than half of each year in the U.S.

✔️Obey the laws
Any serious violations of U.S. law can lead to deportation proceedings and the potential loss of your green card.

✔️File your taxes
You are required to report your income to the U.S. Internal Revenue Service (IRS) and pay any necessary taxes.

✔️Renew your green card
Permanent green cards are valid for 10 years. You must apply to renew your card within six months of it expiring.

Apply for U.S. Citizenship

Five years after receiving the initial conditional permanent resident status, the investor and his or her family may apply for U.S. citizenship.

Before you can apply for U.S. citizenship, you must meet certain eligibility criteria. These include:

• Having been a permanent resident for at least five years.
• Having lived in the U.S. for at least 30 months of the last five years.
• Being able to read, write, and speak English.
• Having a basic understanding of U.S. history and government.
• Showing good moral character.

Citizenship application process

Once you’ve determined your eligibility, you can start the application process. This generally involves the following steps:

• Complete the Application for Naturalization (Form N-400).
• Submit the form, along with all required documents and fees.
• Attend a biometrics appointment, if applicable.
• Complete an interview with a USCIS officer.
• Take the Oath of Allegiance to the United States.

Gain Permanent U.S. Residency with EB5AN

In this guide, we explained the requirements and process for gaining U.S. permanent residency status via the EB-5 Investor Program.

If this still seems overwhelming, don’t worry. EB5AN is here to help you easily navigate this process. We’re experts in the EB-5 Visa Program and have a network of regional centers across more than 20 states. We can provide you with support and guidance on your journey from investment to residency. Schedule your free consultation to get the process started.