Foreign nationals who make an EB-5 investment in a qualifying EB-5 project must satisfy numerous requirements to be eligible for U.S. permanent residency, including providing evidence of the lawful sources of their investment capital and ensuring at least 10 new, full-time jobs for U.S. workers are created through their investment. One additional requirement that EB-5 investors must fulfill is proving on their I-526 petition that they will engage to some extent in the management of the new commercial enterprise (NCE).
To what degree must an EB-5 investor engage in the management of the NCE that they invest in? That depends on the EB5 investment pathway the investor has chosen. If an investor invests directly in an EB-5 project, they are typically required to take on a larger role, involving themselves in the daily managerial activities of the NCE. The benefit of this route is that it allows the investor to retain more control over their EB5 investment, making it the optimal pathway for EB-5 investors with significant managerial experience and who place high value on the financial returns on their EB-5 investment.
NCE Engagement in Regional Center Investment
Overwhelmingly, the EB-5 regional center investment route is the more popular way for foreign investors to participate in the EB-5 Immigrant Investor Program. The reasons investors prefer regional center investment are many—from easier job creation requirements to a higher likelihood of finding an EB-5 project in a targeted unemployment area (TEA), regional center investment offers numerous advantages.
One of the most popular incentives of the regional center route is the more passive managerial role investors may take on. Generally, if an investor works with a regional center to pursue an EB-5 visa, they need only join the NCE as a limited partner to satisfy the engagement requirement. As a limited partner, the EB-5 investor is involved in policy formulation and may vote on important business issues, but they do not have to sacrifice significant amounts of time to engagement at the NCE. In fact, an investor may choose to live in an entirely different state from their chosen EB-5 project—it’s possible to invest in an EB-5 project in Florida but live in Hawaii.
Each EB-5 project has its own project documents that lay out the responsibilities and rights granted to EB-5 investors. Investors, whether they’re making an EB-5 investment through a regional center or not, should work with an experienced EB-5 immigration lawyer to verify that the arrangement stipulated in the EB-5 project’s offering documents or agreements meet the EB-5 program requirements for investor engagement.
Whatever an EB-5 investor’s role is in the NCE, they must provide evidence of their involvement in the NCE on their I-526 petition. The I-526 petition is the first form an EB-5 investor files with United States Citizenship and Immigration Services (USCIS), marking their official embarkment toward an EB-5 visa. If USCIS deems the investor to satisfy all the EB-5 requirements, the I-526 petition will be approved, and the investor and their immediate family members may apply for U.S. conditional permanent resident status.