New commercial enterprise investments are required for EB-5 investors in order to receive an EB-5 visa. Requirements for new commercial enterprise are:
- Established after November 29, 1990, or
- Established on or before November 29, 1990, that is
- Purchase the business and restructure or reorganize strategically that new commercial enterprise results, or
- Expanded through the investment resulting in a 40% increase in net work or number of employee occurs
Apart from new commercial enterprise, there also is commercial enterprise. Commercial enterprise is associated to all for-profit activities formed during ongoing operation of business.
- A sole proprietorship
- Partnership (whether limited or general)
- Holding company
- Joint venture
- Business trust or other entity, which may be publicly or privately owned
EB-5 Regional Centers
Applicants of EB-5 visa have two main investment options. Investors may either invest directly or through an EB-5 Regional Center. Direct investors are required to acquire their own investment project, as well as taking a direct managerial role in overseeing that project. Those who seek a more hands-on control of their investment and the project should seek a direct investment. Those who are more interested in the immigration goals of EB-5 opposed to obtaining a maximum return on their investment can make their investment in an EB-5 Regional Center. Designation from USCIS to administer EB-5 investment projects are received by Regional Centers. Regional Centers are held responsible to USCIS EB-5 visa program regulations.
Job Creation Requirements
The USCIS states that an EB-5 investment must provide a minimum of ten full-time positions for qualifying U.S. workers. The establishment of jobs must occur within two years of the investors entrance into the U.S. and conditional permanent residency.
Job creation categories include direct jobs located in the commercial enterprise which the investor has control financially or has capital investment as well as indirect or collateral jobs resulting from the actual capital investment in an existing commercial enterprise affiliated. Investors who are affiliated with an EB-5 Program Regional Center must document the creation of indirect jobs officially in the latter case.
According to USCIS:
- Direct jobs are actual identifiable jobs for employees who are qualified an located within the commercial enterprise the EB-5 investor has directly invested their capital
- Indirect jobs are classified as jobs which have been created collaterally, or created as a result of a capital investment in a commercial enterprise affiliated with a Regional Center by an investor. Foreign investors are subject to only use the indirect job calculation if affiliated with a Regional Center
Certain qualifying terms apply to classify a business after conception of an investment project. According to the USCIS:
“A troubled business is an enterprise that has been in existence for at least two years and has incurred a net loss during the 12- or 24-month period prior to the priority date on the immigrant investor’s Form I-526. The loss for this period must be at least 20 percent of the troubled business’ net worth prior to the loss. For purposes of determining whether 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.”
“A qualified employee is a U.S. citizen, permanent resident or other immigrant authorized to work in the United States. The individual may be a conditional resident, an asylee, a refugee, or a person residing in the United States under suspension of deportation. This definition does not include the immigrant investor; his or her spouse, sons, or daughters; or any foreign national in any nonimmigrant status (such as an H-1B visa holder) or who is not authorized to work in the United States.”
“Full-time employment means 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 from investments associated with the Pilot Program.”
A job-sharing arrangement will count as a full time employment when two or more employees who qualify for a position share a full-time position meeting a weekly hourly requirement. This excludes combining part-time positions and full-time equivalents when weekly hours are not satisfied. The position requires permanency, full time employment and consistency. Qualified employees who share a job must be permanent and share benefits associated with the job, including payment of both workman’s compensation and unemployment premiums tied with the position by the employer.
Capital Investment Requirements
Requirements for Capital investment are met by secured assets in different forms including cash, inventory, intangible property and equipment. Capital is considered by calculating for same or similar assets according to U.S. fair-market value. Debt leverage is also included which is commonly used in acquisition of businesses outside the EB-5 visa program. Capital includes:
- All tangible property
- Cash equivalents owned by foreign investor
- Indebtedness owned by foreign investor
An alien entrepreneur is personally and primarily liable and the specified enterprise’s assets which the enterprise is based is not based to secure indebtedness. Capital can not be borrowed.
A required investment amount of $500,000 or $1 million depending on the intended project. Target employment area (TEA) investment is $500,000, all others are $1 million. Investments must meet the requirement of leading to the creation of at least ten full-time U.S. jobs for a minimum of two years.
USCIS defines the terms for qualifying targeted employment and rural area as:
“A targeted employment area is an area that, at the time of investment, is a rural area or an area experiencing unemployment of at least 150 percent of the national average rate.”
“A rural area is any area outside a metropolitan statistical area (as designated by the Office of Management and Budget) or outside the boundary of any city or town having a population of 20,000 or more according to the decennial census.”
How We Can Help You Obtain an EB-5 Visa
A significant amount of detail oriented work is required for an EB-5 visa. We strongly recommend consulting with an experienced immigration attorney before pursuing any action. Contact us with any questions about the EB-5 visa program by using the contact form, or on the contact page.