EB-5 Immigrant Investor Legal Guide
Summary of the basic rules and concepts of the EB-5 Immigrant Investor program. This is only a short summary of very basic principles and not to be used as legal advice as each case in unique.
Basic Principles1. The investment must be 1 Million Dollars or $500,000 and made within a designated rural or targeted employment area. Areas are defined by the state or federal government as rural or targeted employment (poor with a lot of unemployment)
2. The Investor must be able to clearly show that all funds invested or those which are in the process of being invested were gained legally. This includes showing how the funds were gained, where they came from and the path the funds will take will take to arrive at the final investment.
3. The Investor must be able to show the source of the funds (where they came from) meaning earned income, gift or loans. If the funds are a gift the Investor must show the original source of the funds and that they were legally obtained.
4. The Investor must show the path of the funds out of the foreign country and into the company in which he is investing or escrow account.
5. The Investor will need to hire a separate attorney to deal with the legal issues of evaluating a business plan and an economic plan for the business.
6. The business must employ 10 U.S. Full-time employees making at least minimum wage ($7.40 per hour in Michigan and it differs for each state) within the first year.
7. Investors should obtain tax advice both in the U.S. and in their foreign countries from qualified tax experts.
8. A form I-526 is filed with the business plan, economic plan and proof of the investment funds held in escrow along with proof the source of the investment funds and legality of the investment.
9. If the I-526 is approved (about 8-10 months), the Investor would then process the Immigrant Visa at the U.S. Embassy and would then be required to move to the U.S. on a Conditional Residence Status which would be valid for two year.
10. In one year and 9 months after the initial Conditional Permanent Resident card is filed, the Investor would then need to file the I-829 petition to remove the conditions on the card.
11. During this part of the process, the Investor would need to show that the investment has been sustained. This means the Investor has not taken any funds out of the investment. Although the Investor may earn a reasonable salary from the business as long as the business is earning money and is not taking out the investment monies.
12. At this time you must also show the business is employing 10 full time, legal, U.S. workers at minimum wage or higher. If the business was an existing business that you purchased, they you must show substantial improvements made in the business and that you have hired of 10 additional workers at full time status making minimum wage or higher.
13. If the I-829 is approved you will receive your Permanent Legal Residence. If it is denied you no longer are authorized to reside in the U.S. and would need to leave.
14. The Investor should discuss with me the need to make the U.S. their primary home after the Immigrant Visa is obtained and the Conditional Permanent Residence status is issued to avoid abandoning the status. We can discuss this later. Basically you have to be willing to move and make the U.S. your primary home after step one, I-526 approval.
Individual InvestorIndividual EB5 Investment
1. Persons who actually want to start and manage a business
2. Businesses that can sustain and employ at least 10 full time workers.
3. Where investment is the driving force and reason for the case.
4. Where the investor wants to control the investment.
5. Where the investor wants to maximize profit.
6. Individuals that have a comprehensive business plan.
7. Individuals that have an economic plan which demonstrates how the 10 full time U.S. workers will be supported by the business.
8. Individuals that have the ability to buy an existing business if the business was formed after 11/29/1990
9. Individuals with the ability to invest in an existing business you need to restructure or reorganize the business, create expansion by 40% and hire 10 additional full-time U.S. employees.
Regional Service Center InvestorRegional Center Investments
These are pools of investor set up in approved Regional Centers and are best for:
1. A person who does not want to run or start a business
2. A person who cannot run or start a business that will employ 10 Full Time U.S. workers.
3. If the main purpose of the investment is immigrating.
1. There are about 300 approved Regional Centers. Many Regional Centers and multiple projects available for investment. I cannot tell you which ones are safe to invest. There is a possibility you will lose your investment and not end up with the legal permanent residence if the Regional Center goes bankrupt or does not have a project which successfully employs 10 full-time U.S. legal workers at minimum wage per investor. You should hire separate council to evaluate the Regional Center, Project Business Plan and Project Economic Plan.
2. Of the 300 approved Regional Centers about 12 have had approvals all the way through the permanent legal permanent residence process. This number is likely to increase this year. Of those 12 there is an 85% approval rate.
3. There is no financial security or guaranteed rate of return. You must evaluate each project and make your best determination for investment with the help of a qualified business attorney.
4. Regional Center project investments may have loan or equity models.