EB5 Immigrant Investor | Song & Meng LLP

EB-5 Immigrant Investor

Congress established the EB-5 Program in 1990 to bring new investment capital into the U.S. and to create new jobs for U.S. workers. The EB-5 Program is based on three main elements: (1) the immigrant’s investment of capital, (2) in a new commercial enterprise, (3) that creates jobs.

1. Capital Investment Requirements

Capital means 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 section 203(b)(5) of the Act.

2. New Commercial Enterprise Requirements

All EB-5 investors must invest in a new commercial enterprise. A new commercial enterprise is defined as a commercial enterprise:

Established after Nov. 29, 1990, or
Established on or before Nov. 29, 1990, that is:
- Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or
- Expanded through the investment so that a 40-percent increase in the net worth or number of employees occurs

Commercial enterprise means 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.

3. Job Creation Requirements

Investment must create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years (or under certain circumstances, within a reasonable time after the two-year period) of the immigrant investor’s admission to the United States as a Conditional Permanent Resident.

Alternatively, investment must create or preserve either direct or indirect jobs:

Direct jobs are actual identifiable jobs for qualified employees located within the commercial enterprise into which the EB-5 investor has directly invested his or her capital.
Indirect jobs are those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor. A foreign investor may only use the indirect job calculation if affiliated with a regional center.

Note: Investors may only be credited with preserving jobs in a troubled business.

General Tips for Evidence in EB5 Cases

Inconsistencies in documents: There may be legitimate reasons for inconsistencies. For example, the dimensions listed on pre-construction contracts for house purchases may vary from the actual dimensions shown on other documents. When submitting documents, providing explanations and evidence to reconcile inconsistencies will greatly reduce the chances of a Request for Evidence (RFE).
Unavailability of documents: Whenever possible, explain and provide evidence of the reason why a particular document is not available. For example, if claiming that proof of prior employment is unavailable because a company no longer exists, submit evidence that the company has been dissolved.
Probative value of evidence: “Probative value” refers to whether a document proves or supports a claim/eligibility requirement. So, for example, income tax returns from the government would have greater probative value and credibility than a letter from a family member or a friend as proof of income to show lawful source of funds.
Incomplete translations: USCIS requires complete English translations of all foreign language documents submitted as evidence. Ensuring that foreign language documents are translated in their entirety before submitting them will reduce the chances of an RFE or Request for Clarification.

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