By Attorneys Robert L. Reeves and Jeff L. Khurgel
Financial investment is an increasingly popular method of immigrating to the U.S. for many investors and their immediate family members. Due to favorable currency exchange rates and backlogs in family and employment-based immigration categories, many immigrants are immigrating to the U.S. through investments during this favorable period in time. USCIS data for the most recent fiscal year (2009) indicates that 86% of investor initial petitions were approved. Preliminary 2010 estimates indicate an 89% approval rate.
The United States Congress created the investor visa category, known as the EB-5 program in 1990. The category allows foreign nationals to obtain conditional permanent resident status if the immigrant invests either five hundred thousand or one million U.S. Dollars in a for-profit employment-creation commercial enterprise. This is also known as the “EB-5” or “employment-creation” green card because the purpose of this category of immigration is to create 10 new full-time jobs in the U.S. per investor. The green card obtained by the immigrant investor is valid for two years and requires a second application to remove the condition through showing certain requirements have been met.
There are four general requirements to qualify for the EB-5 visa. The first is the investor must place the requisite investment amount at risk in a commercial enterprise. The second requirement is that the commercial enterprise must employ no fewer than 10 new full-time U.S. workers within two years of obtaining conditional permanent residency. The third requirement is that the investor must document the source of the investment amount to show that it has not been obtained through unlawful means. And the fourth and final requirement is that the investor will be engaged in the management of the enterprise, either through day-to-day managerial control or through policy formation (e.g. member of the board of directors).
Under certain circumstances, an investment amount of $500,000 will meet EB-5 criteria. Investments in targeted employment areas (TEAs) only require an investment amount of $500,000. These are defined as rural areas (population less than 20,000) or areas of suffering from high unemployment areas (at least 150% of the national average). USCIS Regional Centers are located within the targeted employment areas. The Regional Center investment is an alternative for “hands off” investors. The investor will not have to demonstrate or prove the creation of new jobs to USCIS. This requirement is intrinsic to the Regional Center’s pre-approval by USCIS.
Recent USCIS data indicates there are currently 114 approved Regional Centers operating in 34 states, inclusive of the District of Columbia and Guam. Many investors appreciate that investing in a Regional Center permits the investor to have a limited role, typically as a limited liability partner, leaving the day-to-day management of the company to fall on others. This frees the investor to pursue other activities at the same time. The Regional Centers are engaged in a variety of businesses such as land development, dairy farming, commercial banking and real-estate development. The Regional Centers are for-profit or quasi-government entities and as with any investment, carry their own degree of risk. Approximately 90% of the EB-5 petitions filed with USCIS each year are filed by aspiring immigrants who are investing in Regional Center-affiliated commercial enterprises.
The EB-5 category is now “current” for all nationalities. This means that while some immigrants must wait years for their family or employment-based immigration to proceed, EB-5 Investors do not face a backlog. When considering an EB-5 Investment, the investor should note that the qualifying investment business can take various forms. Some successful examples of EB-5 businesses include restaurants, motels, import-export companies, car dealerships and small manufacturing companies. Each particular investment option should be carefully evaluated by an experienced financial advisor.
Successfully qualifying for the conditional green card is a two-step process. The first step requires an initial visa petition to be filed with the USCIS explaining the investment and why the investor qualifies. Once the petition is approved, the second step occurs. For those investors overseas, the approval is sent to the U.S. Consulate in the investor’s home country via the National Visa Center (NVC) where the investor and his family will be interviewed for their immigrant visas. The NVC coordinates with the Consulate in setting up an interview date. Once the Consulate issues the visa, the investor may travel to the U.S. as a Conditional Immigrant. The investor’s entrance into the U.S. as a conditional immigrant starts the two-year clock.
Investors already in the U.S. in a lawful status when the USCIS approves the petition can opt to complete processing in the U.S. by filing an adjustment of status application to a conditional permanent resident. While the adjustment application is pending with the USCIS, the USCIS can issue a work authorization document and an Advance Parole travel document valid for one year. The Advance Parole document allows for easy travel granting multiple entries to the U.S. while the adjustment of status application is pending without the need to apply for a new visa. Once the adjustment of status is granted, the two-year clock begins to run.
Investors must apply to remove their conditions with the USCIS within a window of time beginning 1 year and 9 months after receiving conditional residence and no later than the second anniversary. Conditional residents who can document the requisite funds were place at risk and 10 new jobs were created for US workers should have their conditions removed and receive permanent resident status.
For immigrants financially capable, the EB-5 option may provide the quickest and most painless route to permanent residence. Such a significant step should not be undertaken without the guidance of an experienced law firm.