The EB-5 Investment Visa - A Quick Summary

Summary of the EB-5 Visa Program:

• A special visa to allow foreign nationals to obtain U.S. permanent residence (“green card”) if they invest capital in a new or troubled enterprise and create at least 10 full time jobs for U.S. workers.

Benefits of the EB-5 Program: 

• Generally faster than other categories as the visa numbers are currently available for all countries including China and India (although China may have a cut-off date in 2015).
• Does not have specific qualifications or experience requirements.
• Family members including spouses and children under 21 can also obtain U.S. green cards.
• Can invest directly or indirectly through third party companies. 

How many EB-5 visas may be issued every year?       

• Up to 10,000 EB-5 visas may be issued annually.  3,000 are set aside for targeted employment area (with high unemployment) 

How much capital is required to invest in the EB-5 visa program?

• US$1,000,000 of investment is required in the regular program – Investors choose the business to invest their capital. 
• US$500,000 of capital is required if investor invests in Regional Centers 

Do I need to invest the total sum of capital immediately?

• No, capital can be invested in installments depending on the type of business, as long as there is a concrete plan to invest the required amount of money in the U.S. enterprise. 

Which investment option should I choose – $1,000,000 or the $500,000?

• The investment of one million dollars allows the investor to choose any business to invest in.  It is more suitable for investors who already have certain type of business in mind and who intend to be actively involved in the business enterprise.  The Regional Centers ($500,000) may be more suitable for the passive investors who do not want to be actively running the business. 

What documents are required to prove that I have the capital to invest?

• The U.S. government would like to know that you have the stated capital to invest, and also that the capital comes from legal sources.  Typically, financial documents from the last five years are required including, for examples, personal or company income tax returns, foreign business licenses and registration, salary records, bank account records,  real estate documents, stock and security ownership documents, etc. 

What other documents are needed to prove the case?

• Depending on the applicant and the business being invested, other documents may be required including: bank statements showing amounts deposited in the U.S. business accounts for the enterprise, evidence of assets purchased for the U.S. enterprise, evidence of property transferred from abroad to the U.S., mortgage agreement, promissory note, security agreement, evidence that U.S. workers have been hired, etc.   

Would it be a problem if I have had a pending court case against me before?

• It depends.  Provide certified copies of any judgments or evidence of all pending governmental civil or criminal actions, governmental administrative proceedings, and any private civil actions (pending or otherwise) involving monetary judgments against the immigrant investor from any court in or outside the United States within the past fifteen years. 

Are there risks involved in my investment?     

• EB-5 is an investment visa and carries all the “normal” risks associated with investing in a business.  Investors must perform their due diligence before making an investment decision.  In fact, the EB-5 regulations require that the investment must be placed “at risk” in order to qualify for the EB-5 visa.  

Before my EB-5 visa application is approved, is there a way to protect my investment?

• Yes, it may be possible to place the funds in an escrow account during the adjudication process. Once the I-526 petition is approved, the funds will be transferred to the Eb-5 enterprise upon approval of the immigration visa petition.  

What are the basic procedures of applying for EB-5 green card?         

There are two major steps:

• File I-526 with evidence to apply for 2 years of conditional lawful permanent resident status
• File I-829 with evidence to remove conditions 90 days before the 2nd anniversary (evidence must match the initial business plan) 

What U.S. government office will be handling my EB-5 applications? 

• Generally, the United States Citizenship and Immigration Services (USCIS), a branch of the Department of Homeland Security, will be adjudicating the EB-5 petitions. 

What does it mean by “conditional lawful permanent resident status” or green card?

• Even if the USCIS agrees that the evidence is sufficient to support a I-526 EB-5 petition, the  petitioner (foreigner) will only be approved for a temporary green card for 2 years. This is called the conditional green card.  A second petition I-829 must be filed within two years to remove the conditions to make the green card permanent. 

How can I remove my conditional status?

• Ninety (90) days prior to the two-year anniversary of the date on which the immigrant investor obtained conditional lawful permanent resident status, the immigrant investor must file a Form I-829 to remove the conditions.  Additional evidence must be filed to prove that the required capital has been invested or being actively invested as initially planned, and 10 full-time jobs have been or are expected to be created within a reasonable time.  

What are Regional Centers?

• A Regional Center is a business entity approved by the USCIS to be involved with the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.  However, just because it has been approved by USCIS, it does not mean that it is a “safe” or “good” investment. Currently there are about 290 to 300 Regional Centers approved. 

How do I know which Regional Center to invest in?    

• It is ultimately an immigrant investor’s decision to choose which Regional Center to invest in.   Professionals such as attorneys, accountants, business and financial professionals may provide professional guidance and advice to help you make the decision. 

Should I use an agent, consultant or other middlemen to help me invest in the EB-5 visa program?

• Many intermediaries (agents, immigration consultants, investment companies, etc.) receive financial incentives from the regional centers or other related parties.  Therefore, their advice may not be objective.  In fact, some of them have been found to use exaggerated or even untruthful information to attract foreign investment.  Consequently, it is very important for foreign investors to hire independent business, financial and legal professionals to do due diligence and to investigate the offer of investment program thoroughly. 

EB-5 Ponzi Scheme Indicted by SEC

A Texan couple and their companies were charged by the U.S. Securities and Exchange Commission (SEC) for allegedly running a Ponzi scheme to defraud at least 10 foreign investors more than US$5,000,000 under the guise of the EB-5 investment visa program.

The EB-5 investment visa program (EB-5 Program) allows foreigners to apply for U.S. permanent resident status (commonly known as the "Green Card") by investing $500,000 or $1,000,000 dollars in a U.S. enterprise and creating or preserving at least 10 full-time job openings.   There are no specific qualification requirements of the EB-5 investors, and currently there is an abundance of EB-5 visa numbers.  Because of these advantages, many wealthy foreign investors are interested in the EB-5 Program.  At the same time, the EB-5 Program has also been abused by unscrupulous individuals and companies as a marketing tool to defraud innocent foreigners large sums of money.

By law, business entities called Regional Centers are established for the economic development of specific geographic areas and industries under the EB-5 Program. The Texan couple, Mr. and Mrs. Ramirez, formed a Regional Center called "USA Now LLC" to solicit foreign funds to invest in the EB-5 Program.  However, even before the Regional Center's application was approved by the U.S. government, the couple was already taking money from foreign investors. The Ramirezes initially targeted investors in Mexico, but later on also solicited money from investors in Nigeria and Egypt.

The Texan couple also allegedly made false promises to investors that the funds would be kept in escrow account, and would only be released for legitimate business purposes after the U.S. Citizenship and Immigration Services (USCIS) had approved their immigrant visa applications.  In reality, the couple would allegedly take the money out from the escrow account for their own illegal use.  Some alleged misappropriations of investor funds include the purchase of a Mercedes Benz and other automobiles for company employees, and financing of a Cajun-themed restaurant in Texas.  Further, the SEC also alleges that the Ramirezes would use the payments of subsequent investors to make Ponzi-payments to earlier investors.  For example, an initial EB-5 investor discovered that USA Now was not yet approved as a Regional Center and demanded a refund of investment. Because the Ramirezes already spent the funds of the first investor, they therefore used the investment funds from subsequent investors to pay back the first investor.

The Texan couple also allegedly promoted to foreign investors that the funds would be invested in an energy business, although they never included such an investment plan in the Regional Center application filed with the USCIS.  They also allegedly promised prospective investors a 5% return of investment without explaining how they were going to make good that promise.

This is not the first time that the SEC has investigated an EB-5 Regional Centers.  Because large sums of funds are involved in EB-5 Program, scammers often prey on foreign investors who are usually not sophisticated enough to understand all the legal intricacies of the U.S. legal system.  Hence, it is important for foreign investors to do their due diligence before choosing a Regional Center as an investment tool.  If in doubt, they should seek advice from independent professionals such as lawyers and business advisers.

December 2012 Visa Bulletin: Family categories advance, Employment 5th China may no longer be current

In December, most family sponsored visa categories advance nicely. For examples, Family 1^st move forward by one month for China, India and the “Other Countries”, and by three months for the Philippines to October 8, 1997.  Family 2A for China, India, Philippines and “Other Countries”; and Family 2B for China, India “Other Countries” all advance five weeks. 

On the Employment side, all EB-2 categories are current except India, which remains unchanged, and China, which moves forward by seven weeks. What is significant is that the State Department predicts that EB-5 China may no longer be current during the second half of the fiscal year.  Demand for investment visas from Chinese nationals has been very high in recent years.  Please see the tables below for details:

Family	Other Countries	CHINA	INDIA	MEXICO	PHILIPPINES
F1	01DEC05	01DEC05	01DEC05	01JUL93	08OCT97
F2A	22AUG10	22AUG10	22AUG10	01AUG10	22AUG10
F2B	15NOV04	15NOV04	15NOV04	01NOV92	22MAR02
F3	08JUN02	08JUN02	08JUN02	01MAR93	01AUG92
F4	01APR01	01APR01	01APR01	22JUL96	22MAR89

1st: Unmarried Sons and Daughters of Citizens (about 23,000 per year).

2A: The 2 "A" preference is for Spouses and Children (under 21 & unmarried) of LPR's.

2B: The 2 "B" Preference is for Unmarried Sons and Daughters (21 or older) of LPR's.

3rd: Married Sons and Daughters of Citizens.(about 23,000 per year)

4th: Brothers and Sisters of Adult Citizens.(about 65,000 per year)

Employment	Other Countries	CHINA	INDIA	MEXICO	PHILIPPINES
1st	C	C	C	C	C
2nd	C	22OCT07	01SEP04	C	C
3rd	22DEC06	01JUL06	01NOV02	22DEC06	15AUG06
Other Workers	22DEC06	01JUL03	01NOV02	22DEC06	15AUG06
4th	C	C	C	C	C
5th	C	C	C	C	C

1st: Priority Workers (Extraordinary ability aliens, multinational companies executives/managers, outstanding prof./researchers)

2nd: Members of the Professions Holding Advanced Degrees or Persons of Exceptional Ability.

3rd: Skilled Workers, Professionals, and Other Workers (Unskilled.)

4th: "Special Immigrants" (Religious & others)

5th: Employment Creation (Investors)

USCIS announces new EB-5 Program Office

By Paul Szeto, Esq.

The U.S. Citizenship and Immigration Services (USCIS) announced recently that it will create a new office to oversee the administration of the EB-5 Immigrant Investor

program.  The EB-5 Immigrant Investor program, also known as the investment visa program or job-creation program, requires that a foreign national to invest a million U.S. dollars ($500,000 for investment in targeted employment areas) of capital for the creation of at least ten full time jobs for U.S. workers.  In return, the investor and his/her family will be granted permanent resident status (green cards) to work and live in the U.S. permanently.

According to the USCIS, the EB-5 program has facilitated the creation of tens of thousands of new jobs and the injection of billions of dollars into the U.S. economy since its inception in 1990.  Interest in the program has also grown substantially from both foreign investors and domestic business projects seeking capital investment.  For examples, for 2012 to date, USCIS has approved more than 3,100 Form I-526 petitions, more than triple the number approved in all of Fiscal Year 2009.  Also, since 2009, the USCIS has also quadrupled the size of the EB-5 adjudications team and hired eight expert economists dedicated to the EB-5 program to ensure that EB-5 cases are handled expeditiously and with appropriate expertise.  In the next month, the agency will hire two full-time attorneys with substantial transactional experience to the USCIS EB-5 program team.  Finally, for regional center applications (specific investment centers) that have been recommended for denial, USCIS will also create a special Review Board consisting of two Supervisory Immigration Services Officers and one economist to review them to allow applicants opportunities to discuss their cases in-person before any final denial is issued.  

Because of the rapid growth of the EB-5 Immigrant Investor program, USCIS is creating a dedicated program office to make sure that sufficient resources are devoted to administer the program.  The goal is to manage the complex issues of the program under a single leadership, and the USCIS is recruiting a new Chief of Immigrant Investor Programs to lead this new office.  According to the USCIS, the new program chief should have “significant experience in the business world and will assume responsibility for ensuring that the program is administered efficiently, with integrity, with predictability, and with an understanding of today’s business realities”

This announcement makes sense as the EB-5 program is more than just an immigrant visa program; it involves many complex business and financial issues that a regular immigration adjudication officer may not have the training or experience to resolve.  A dedicated office and chief will also promote accountability and efficiency.  The creation of the new EB-5 program office is good news to both foreign investors and the U.S. businesses, facilitating capital investment and creation of American jobs - something that we desperately need right now. 

(Paul Szeto, an immigration lawyer and former INS attorney, regularly writes on immigration issues. His contact info: 732-632-9888, info@szetolaw.com)

New law allows Israeli nationals to apply for E-2 Treaty Investor Visa

On June 8, 2012, President Obama signed into law (H. R. 3992) to allow eligible Israeli nationals to receive E–2 nonimmigrant visas.  E-2 visa is for "Treaty Investors" of a treaty country to make substantial investment in the U.S.  This new law will allow Israeli nationals to apply for E-2 visas at overseas U.S. Consulate Officers or to apply for for E-2 status with the USCIS if they are physically present in the U.S.

USCIS proposes rule to process EB-5 immigrant petitions filed between 1995 and 1998

On Sept. 27, 2011, the USCIS announced that it has published a new rule for the processing of certain applications approved between 1995 and 1998 by foreign investors under the fifth preference employment-based immigrant visa classification (EB-5).  The authority of the rule comes from the 21st Century Department of Justice Appropriations Authorization Act.

The new rule applies to approximately 580 principal immigrant investors who had their Immigrant Petition by Alien Entrepreneur (I-526) approved between Jan. 1, 1995, and Aug. 31, 1998.  Their dependents are also covered.

In addition to an approved I-526 petition, these applicants must have also met the following condition prior to Nov. 2, 2002:  Either filed a Form I-485 to attempt to adjust their status, or a Form I-829 to seek to remove their conditional permanent residence status obtained as an alien entrepreneur.

The proposed rule, if adopted, would provide an additional two-year period of time for these immigrant investors to meet the EB-5 investment and job-creation requirements.  Other Eb-5 applicants would not be affected by this new rule.   The public has 60 days to submit comments on this proposal.  The new rule is accessible at www.regulations.gov.