Introduction
Can a foreign investor purchase permanent residency in the United States? Well, not exactly, but the EB-5 US investment visa program is about as close as you can get to purchasing permanent residence. The EB-5 investors visa USA program offers permanent residence to foreign investors much faster than just about any other pathway, but it does require a substantial qualifying investment in a new or existing commercial enterprise (nonprofits don’t count).
How Does the EB-5 Visa Program Work?
The EB-5 investor visa USA is the only US investor visa that allows you to apply for permanent residence through investment in a new or existing US commercial enterprise. It requires immigrant investors to put up a substantial minimum investment, and it must result in a certain number of jobs created or preserved for the U.S. economy.
Please note that a quota system is in effect — no more than 10,000 EB-5 investor visa USA applications will be accepted in any given year, and foreign investors born in any particular country cannot be issued more than a collective total of 700 investment visas.
Conditional Permanent Residence
Once your initial application has been approved by the US Citizenship and Immigraton Services (USCIS), you will be eligible to apply for conditional permanent residence in the US. This conditional permanent residence is valid for only two years, but you can petition the USCIS to remove the condition after two years by proving certain facts, including the continuing validity of your investment. Once the condition is removed, you will be allowed to remain in the US permanently as a lawful permanent resident.
Your family can also receive lawful permanent residency through the same process.
How Much Does an EB-5 Visa Cost?
To qualify for an EB-5 visa, investors must invest a minimum of $1.8 million into a “High Employment Area” (HEA) commercial enterprise or a minimum of US $900,000 into a designated “Targeted Employment Area” (TEA) commercial enterprise. This new minimum was increased from the earlier minimums — $1 million for an HEA and $500,000 for a TEA. The new, higher minimums apply to applications filed on or after November 21, 2019.
An investor must also pay processing fees and legal fees, but these should be negligible compared to the total amount of the investment.
Who Can Apply for the EB-5 Visa?
EB-5 visas are available to investors as well as their spouses and unmarried children who are under 21 years of age. As an EB investor you must:
- Make the necessary investment into a commercial enterprise (which often means simply depositing the funds into escrow before your application is submitted); and
- Issue a realistic plan to create or preserve 10 permanent full-time jobs in the United States.
Please note that you cannot be inadmissible to the United States for independent reasons (unlawful presence in the US, certain criminal offenses, etc.).
How Long Does It Take for a Foreign Investor to Get a Green Card Through EB-5?
The speed of processing of the EB 5 visa is one of its most attractive features. The initial application is usually approved within 60 days of filing, and a conditional permanent residence visa is usually issued within six months of the initial filing date.
Keep in mind that if you were born in mainland Vietnam, India or mainland China (excluding Taiwan and Hong Kong), you might have to wait longer than other nationalities to receive an EB-5 investment visa, due to high demand from these countries and the limit of 700 EB-5 investment visas from any given country. If your spouse is immigrating with you but was not born in one of the foregoing countries, this delay will apply to neither you, your spouse or your children.
Obtaining Unconditional Permanent Residency
When you are first issued permanent residency, you will receive “conditional permanent residency”, which lasts for only two years. That might not seem to make sense — how can residency be “permanent” if it only lasts for two years? Well, it’s just a figure of speech. What’s really going on is that the US Citizenship and Immigration Services (USCIS) needs time to ascertain that your investment is legitimate and that it will produce the required number of jobs.
Before your two-year conditional permanent residency expires, you must apply to have the condition removed. If the condition is removed, you will finally have a “green card” — lawful permanent residency in the United States. To have your condition removed, you must prove to the USCIS that:
- The funds you used for your investment in a US commercial enterprise came from a legitimate source (legitimate real estate investment activities, for example).
- Your entire investment is at-risk. This means that you could lose it all if your business doesn’t work out.
- Your investment in a US commercial enterprise created at least 10 full-time jobs, either directly or indirectly.
The acceptance rate for petitions to remove the conditions on lawful permanent residency has increased from 62 percent in 2005 to well over 90 percent today. These figures include only applicants who were already granted conditional permanent residency — they do not include cases where a prospective immigrant’s petition for conditional permanent residency was denied.
Application Process
Following is a general sequential overview of the entire EB-5 application process:
Step 1: Identify an appropriate investment
Not every investment will qualify you for an EB-5 visa — EB-5 investments must meet certain criteria. There are three ways that you might go about investing your capital — (i) establishing a new commercial enterprise (ii) purchasing an existing business or (iii) investing in an EB-5 regional center project. You may qualify for the $900,000 minimum investment or the $1.8 million minimum investment, depending on the area in which the project is located.
- Establishing a new commercial enterprise will mean making a direct investment by forming your own new commercial enterprise, hiring employees and obtaining any licenses or permits required by any government with jurisdiction over your business.
- Purchasing an existing business will mean purchasing the shares of an existing commercial enterprise and assuming its liabilities. If the business qualifies as a distressed business that would otherwise go bankrupt or lay off its employees, you may be eligible to meet the job creation requirement by preserving jobs at the acquired company that, but for your purchase, would have been lost.
- Investing in a regional center project means investing in one of the USCIS’s 783 approved regional center programs. By taking this route, you will be acting as a passive investor (you will not be involved in the day-to-day operation of the business or its major decisions). Investment risk for a regional center is low, but so is return on investment.
As a regional center investor, you will meet the EB-5 job creation requirement by creating indirect jobs, based on the extent to which your investment helped revitalize the economy of a particular geographic area. Contrast this with the direct jobs you would create if you established a new enterprise and hired workers.The regional center option is ideal for investors who wish to take advantage of the EB-5 program but have no experience managing a business.
“High Employment Areas” (HEAs) vs. “Targeted Employment Areas” (TEAs)
A Targeted Employment Area (TEA), for which a $900,000 minimum is required, is an area of high unemployment (150 percent of the national average or more) or a rural area, that has been designated as a TEA by the USCIS under the EB-5 program.
Formerly, states were given the authority to designate TEAs, but now that authority rests solely with the USCIS. This revision makes it harder to designate urban areas as TEAs. According to the USCIS, this was done to keep states from manipulating the EB-5 program by designating economically healthy areas as TEAs.
A High Employment Area (HEA) for which a $1.8 million investment is required, means a part of a metropolitan statistical area that is not a TEA, that enjoys an unemployment rate that is significantly below the national average.
Step 2: Invest the capital
Cash isn’t the only type of capital you can invest into an existing or new commercial enterprise. Acceptable investments also include equipment, inventory, tangible personal property and cash equivalents. Capital is to be denominated in US dollars and assessed at fair market value. It is acceptable to place your investment into escrow during the visa application process, and even promissory notes are acceptable under limited circumstances.
Special Case–Debt Guarantees: Debt guarantees in favor of the existing or new commercial enterprise that forms your investment project that are supported by assets you own can qualify as capital investment. In order for a debt guarantee to qualify, you must be personally and primarily liable for the debt, and the investment project’s own assets must not be used to secure any part of the debt.
You must establish that you are the legal owner of the capital that you contribute, and you must prove that none of this capital was obtained through unlawful means.
Step 3: File Form I-526
Once you have identified the investment and contributed the capital (at least to the extent of placing it into escrow), it will be time to file Form I-526, Immigration Petition by Alien Investor, with the USCIS. Some of the supporting documents you will need include:
- Evidence that the investment will meet job creation requirements (10 new full-time jobs in a new commercial enterprise, for example);
- A comprehensive business plan that complies with Matter of Ho requirements; and
- Evidence of the source of the capital (to prove that the source was legal);
The waiting time for an approval from the USCIS is typically four to six months.
Step 4: Answer Requests for Additional Evidence (RFEs)
The USCIS might send you a Request for Evidence (RFE) after you send your petition but before it has either approved or rejected it, seeking more information with which to make a decision on your petition. If you receive one, or even if you receive more than one, don’t be alarmed — RFEs are a normal part of the application process, especially in the case of EB-5 investment visa applications. It is important, however, that you respond promptly and thoroughly.
Step 5: Apply for Conditional Permanent Residence
Once your Form I-526 has been approved, you will be eligible to apply for conditional permanent residence — basically, a two-year green card that can be converted into a permanent green card after two years.
If you are in the US when your Form I-526 is approved, you will apply for conditional permanent residence by filing Form I-485, Application to Register Permanent Residence or Adjust Status with the USCIS.
If you are located abroad, you will need to apply for an EB-5 investment visa at the US embassy or consulate nearest you. Your visa will be stamped onto your passport, allowing you to enter the United States.
Step 6: File Form I-829 Seeking Unconditional Permanent Residence
You can file Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status, no earlier than 90 days prior to the end of your two-year conditional green card status. File it as early as you can — if you delay beyond the expiry of your conditional permanent resident status, your ability to ever adjust to unconditional permanent resident could be jeopardized.
Even if you file the first day you are eligible, the USCIS probably will not have finished adjudicating your petition by the time your two-year conditional residency expires. That’s OK, however, because your stay in the US will be automatically extended for however long it takes the USCIS to adjudicate your petition one way or the other.
Required Documentation
Your application package should include the following documents:
- Completed and signed Form I-829.
- Photocopy of all conditional permanent resident cards for you and your family members (front and back).
- Federal tax returns and other documentation proving that a new commercial enterprise was established (if your investment in the EB-5 program constituted a new commercial enterprise).
- Proof that the investment was actually made, in the form of audited financial statements, bank statements and other similar evidence.
- Proof that the commercial enterprise continued throughout the entire two-year conditional permanent resident period — invoices, bank statements, contracts, business licenses, tax returns and quarterly tax statements, for example.
- Evidence that your investment complied with the job-creation requirement — payroll records and tax documents, for example.
- Evidence that your company actually complied with the business plan that you submitted when you applied for the EB-5 program.
- If you or any member of your family has a criminal record, you must submit arrest records, sentencing records, probation or parole records, and any other documents relating to the criminal record.
- Other documents as necessary and appropriate.
- Include the appropriate fees: The filing fee for Form I-829 is $3,750, and you must also pay a separate $85 biometrics fee for yourself and for each immigrating family member who is between 14 and 79 years of age.
The application package should be sent to a designated USCIS Service Center in Texas. The current processing time averages between 22 and 45 months after the application date.
Step 7: Attend the Biometrics Appointment and the Visa Interview
In addition to submitting your application package, you and your immigrating family members must attend a USCIS biometrics appointment where your fingerprints, signatures and photographs are taken. This can be done at a USCIS office if you are in the United States, or at a US embassy or consulate if you are located outside of the United States. You might also be required to attend an in-person interview after your I-829 petition has been processed.
Step 8: Obtain Your Green Card
If your petition is successful, you and your family will all receive 10-year green cards, most likely mailed to your home address. You can renew your green card an indefinite number of times (for your entire lifetime). Your family members will be able to renew their permanent resident cards indefinitely even if you predecease them.
The Future of the EB-5 Investment Visa
The EB-5 investment visa USA program was created in 1992 to generate jobs for US workers and to bring money into the US economy. It has never been made permanent — it is reauthorized by Congress every few years. As such, there is no absolute guarantee that it will turn out to be a permanent feature of the US uimmigration landscape.
A number of problems have been identified with the EB-5 investor visa program, including:
- Critics charge that some investors have been able to fool the USCIS into believing that they obtained their investment funds legally, when in fact these funds were obtained through unlawful means and then “laundered” to make them appear acceptable to the USCIS.
- A number of schemes have arisen that appear to be designed to defraud investors.
- The minimum investment was too low because the amount had not been modified to account for inflation in nearly 20 years (this was rectified in 2019 with a major upward adjustment of the minimum investment amount, as detailed above).
Due to the 2019 reforms — in particular the increase in the minimum investment amount and the regulatory reforms making it more difficult to invest in areas with healthy economies — investor interest in the EB-5 investment visa USA program appears to be waning.
Many observers expect the number of EB-5 program visas to shrink while the dollar value of each investment project increases. These two trends may cancel each other out, leading to a stable investment amount with a smaller number of investors.
The same observers expect fewer investors from China and an increase in investment from Latin America. Ultimately, however, future trends are difficult to predict. It is unlikely, however, that the EB-5 program will disappear.
