Faq - AMERICAN EB-5 CENTERS

What is Section 203(b)(5) of the Immigration and Nationality Act?

Congress created this immigrant visa category in 1990 to encourage foreign investment in the United States. The program, commonly called the EB-5 Immigrant Investor Visa Program, allows foreign entrepreneurs to invest either $500,000 or $1,000,000 in a new United States business, that creates a minimum of ten full-time jobs.

Who is eligible?

Permanent resident status is available to the investor, spouse, and unmarried children under the age of 21 (as of the date of application). Eligible foreign nationals are those investing the required amount of capital into a new commercial enterprise. The prospective investor must document that the capital was legally gained.

Can I sponsor my child if they are over 21 years old?

Although a child over the age of 21 cannot apply for residency under the parent’s immigrant investment application, a parent may gift the required investment funds to the child, so that child may apply individually as an immigrant investor.

What is meant by the requirement that the investor’s assets be lawfully gained?

Under USCIS regulations, the investor must prove that his assets were gained through lawful business, salary, investments, property sales, inheritance, gift, loan, or other lawful means.

How do I seek status as an immigrant investor?

In order to seek status as an immigrant investor, you must file UCIS Form I-526, Immigrant Petition by Alien Entrepreneur. Form I-526 must be filed with supporting documentation, clearly demonstrating that the individual’s investment meets all requirements. Requirements include establishing a new commercial enterprise; investing the requisite amount of capital; documenting that the capital was legally obtained; creating the requisite number of jobs; and when applicable, creating employment within a targeted employment area.

What role does American EB5 Capital Group play in EB5 immigration?

American EB5 Capital Group offers eligible investment opportunities to those who choose the EB-5 immigration path.

What is the amount of required capital for participation in a Regional Center program?

As long as the Regional Center operates within a Targeted Employment Area, as defined by the USCIS, the legal capital requirement is $500,000.

What is meant by qualifying investment capital?

Regulations define capital as cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the foreign investor. A debt qualifies as capital only when the foreign investor is primarily and personally liable for the indebtedness. This rule allows bank loans and provides greater flexibility for the investor, who may have assets that are not immediately available for investment in an immigration program. In this case, the investor must demonstrate to the bank a total net worth of at least $500,000 that will meet the standard requirements of the bank for financing. This may include real estate, ownership of business assets, cash, stocks, bonds, and other assets located inside or outside the United States.

Must I have previous business experience or education?

The investor is not required to have any prior business experience or a minimum level of education. The only requirement for the investor is that he or she has the required net worth and capital and can document that the funds were legally obtained.

Do I have to personally manage the new enterprise to qualify for my visa?

No, investments through a Regional Center are passive and do not require an active management role.

Can I hire my own attorney, or must I use one recommended by the Regional Center?

American EB-5 Capital Group prefers that all investors in a particular enterprise use the same attorney so that paperwork is consistent. However, you are free to retain separate counsel to review all documents.

Do I need to speak English?

It is not a requirement; however, it is recommended that the investor fully understands the investment terms, and that the offering materials are reviewed carefully before the investor makes decisions.

Must I be in good health?

Yes, you must pass a health screening as part of the consular review process before a conditional EB-5 Visa is granted.

How many immigrant visas are allotted for EB-5 classification?

The EB-5 program designates 10,000 visas per year for aliens and family members whose qualifying investments result in the creation of at least ten full-time jobs for U.S. workers. Of the total, 3,000 visas are specifically allocated to immigrants who invest through USCIS-designated Regional Center.

Can I apply if I have been rejected or terminated in the past by USCIS for an L-1, E-2, B, or other visa?

Previous rejection does not disqualify an applicant; however, all criminal, medical, or U.S. immigration issues must be disclosed to the limited partnership and legal counsel prior to submission of an application.

What is the most common reason for rejection of an EB-5 visa application?

The most common reason for rejection of an EB-5 visa application is that the applicant failed to prove that the investment capital was legally gained.

What is the likely return on my $500,000 of capital?

The law states that $500,000 investment must be at risk, and that providing a guaranteed minimum return of investment funds is expressly prohibited. Any guarantee by any regional center invalidates the EB-5 visa petition.

What corporate structures are used in the EB-5 Program?

A Corporation is formed by filing a charter with a state government and is owned by shareholders. The corporation is taxed on its income. The shareholders are only taxed on dividends paid to them by the corporation. Shareholders do not pay tax on the corporation’s income and only risk the cost of their investment in the corporation. They are not responsible for the operation of the corporation.
A Partnership involves two or more people or entities collaborating for an enterprise, without a state charter. The partnership as a whole does not pay tax, but individual partners or entities are responsible for all income and loss. The partners pay tax on partnership earnings. Each partner, unlike a corporate shareholder, is responsible for the operation of the partnership. If the partnership were to be sued and judged liable, each partner is responsible for damages. A corporate shareholder has no such direct liability.
A Limited Liability Company is a corporation that passes income and loss to the shareholders but offers shareholders the same limited liability as a limited partner or corporate shareholder.
A Limited Partnership is formed by filing a charter with the state government and consists of a general partner and one or more limited partners. The general partner manages the business and assumes legal debts and obligations, while limited partners are liable only to the extent of their investment. The charter details the rights and powers of the limited and general partners, percentages of ownership, and distributions of profits. As in a general partnership, limited partnership income is taxed at the partner level, not at the entity level.
For the Regional Center investor, the law specifically allows that an investor will qualify as a “limited partner,” as defined in the Revised Uniform Limited Partnership Act, if the project meets all the regulation requirements by enrolling the investor in the investment as a limited partner. This role allows the investor to continue to engage in their own business without participating in the investment operations. Additionally, this allows the investor to live where he pleases, and gives him the option to enter and exit the United States without any obligation to manage the investment. Most importantly, the limited partner, like the corporate shareholder, is only liable to the enterprise to the extent of the agreed-upon investment.

What are the risks associated with an EB-5 Investment?

There are unique risk factors for each Limited Partnership, which are specifically addressed and described in detail in each Limited Partnership’s offering materials. Risk factors differ for each Partnership, but may include economic conditions, failure to meet job requirements, and denied immigration status under the USCIS Immigrant Investor Program.

Does investing in a Targeted Employment Area (TEA) mean taking more investment risk?

Understanding the unique characteristics of a particular sub-market is paramount to assessing the risk of any investment, particularly one within an area that, by definition, has experienced higher than average rates of unemployment.

May investors combine their investment capital through one Limited Partnership?

Regulations specifically allow several investors to pool funds to establish a Limited Partnership; however, each investor must individually meet the minimum at-risk capital and new job creation requirements.

How is the Limited Partnership interest protected?

The USCIS requires that some financial risk be assumed by the investor in order to qualify for the EB-5 Immigrant Investor Program. Each investor must qualify for the minimum at-risk capital and new job creation requirements. Every effort is made by the General Partner to minimize the amount of risk by ensuring that the investment is properly collateralized and that the Partnership remains in strong financial standing.

How does the escrow bank account protect me against the risk of losing my money?

The escrow account serves to protect the investor’s money until the I-526 Conditional Visa application is approved. The funds continue to belong to the investor; however, they are committed to be placed into the investment upon approval of the petition. The attorney or bank has an agreement with the investor that requires the funds to be released from the account only when the petition is approved by the USCIS.

Will I be subject to U.S. tax laws?

The United States charges income tax on all U.S. Citizens and Permanent Residents, and taxes are based upon worldwide income. Foreign investors should review tax implications with professional advisors before making any investment.

If my I-526 petition is approved by USCIS, what is the purpose of the consulate application and interview?

Upon approval of the I-526 Petition, you must wait in your country of origin for notification from the U.S. consulate to prepare documents for the visa interview. The procedure ensures that the investor and his or her family undergo medical, police, security and immigration history checks before the conditional permanent resident visas are issued. At the interview, the consulate officer may address information on the I-526 application, including asking the investor to summarize the nature of his or her investment. If the investor and his or her family are in the United States, then the investor may apply for adjustment of status by filing form I-485, which may be filed at the appropriate office of the USCIS.

After petition approval, can members of the family interview in different countries?

The country of origin is the standard interview site; however, if a member of the family is located in another country, such as a student attending school in the U.S., the student does not have to return to the country of origin and may adjust status in the United States at the district office of the USCIS.

What if I am already in the U.S. on another visa status?

If you are already in the U.S., the I-526 petition process remains the same. If you are already in the U.S. after the I-526 is approved, you may then file an I-485 Application for Adjustment of Status to Permanent Resident.

What must the Regional Center demonstrate to lift the conditions of the investor at the I-829 stage?

The Regional Center must prove that ten or more jobs have been created, either directly or indirectly, by the new commercial enterprise via revenues generated from increased exports, improved regional productivity, or increased domestic capital investment resulting from the project developed through the EB-5 Regional Center.

What is meant by Direct and Indirect Jobs?

Direct jobs necessitate a relationship between employer and employee. Indirect jobs are retained by people working outside the newly established commercial enterprise, such as employees of the producers of materials, equipment, and services that are used by the commercial enterprise.

What makes this program different from the L-1 (manager transfer) or E-1/2 (Treaty Trader/Investor)?

Participation in the Immigrant Investor programs yields Permanent Resident status. The E-1/2 Treaty Investor or Treaty Trader programs allow for non-immigrant status only. When the qualifying Permanent Resident trade investment ends, the non-immigrant status expires as well. L-1 is also a non-immigrant classification. Unlike E-1/2, an L-1 alien can apply for classification as a Multinational Executive or Manager. If approved, the immigrant may apply for Permanent Resident status.

If I get a green card, do I have to live in the U.S.?

Yes, an applicant for conditional or permanent residence in the U.S. must intend to immigrate to the U.S. and maintain a home in the U.S. as their primary residence.

What is the difference between “conditional” and “unconditional” green cards?

The two cards offer the same rights and privileges. An investor who is approved for the EB-5 immigrant visa receives a conditional green card, which must be reissued after two years, subject to removal of conditions. After the two year conditional period, there is a three month window during which an individual must file another application with the USCIS to verify that all of the funds have been invested, and that the required employment has been created. When the conditional resident status has been lifted, full resident status is granted, and a permanent green card is issued.

For how long is a Green Card valid?

A conditional Green Card received via EB-5 investment is valid for two years. You must file this petition during the 90 days immediately before the second anniversary of the date that you obtained conditional permanent resident status. If you do not have the conditions removed, the Green Card will become invalid at the end of two years, and your permanent resident status will be terminated. Unconditional Green Cards are valid for ten years. You may maintain Legal Permanent Resident status by re-applying for the Unconditional Green Card, using form I-90.

Can my Green Card be revoked?

The most common reason for revocation of a Green Card is conviction for the commitment of a crime. You may also lose your Green Card if you abandon the United States as your permanent residence. The USCIS perceives an absence of longer than one year as an indication of abandonment of U.S. residence. You may keep your permanent resident status after a prolonged absence; however, you may no longer use your Green Card as a U.S. entry document. You must either apply at a U.S. consulate for a special immigrant visa as a returning resident, or you must get a reentry permit.

What is the difference between permanent residency and citizenship?

Once you obtain a Green Card and become a Legal Permanent Resident, you have most of the rights and obligations of U.S. citizens, except that you cannot vote and are not entitled to some public benefits. You are subject to the same tax filing requirements, tax rates, and deductions as U.S. citizens. Your green card is your most important travel and identification document. When your green card arrives, please look at it carefully. You may need to extend it in ten years. If you need to replace it, you may do so by filing a form with the USCIS. One of the most important rights Legal Permanent Residents possess is the right to obtain U.S. citizenship after five years. The first step in becoming a U.S. citizen is to gain status as a Legal Permanent Resident (LPR) for a period of five years and to be physically present in the U.S. for 30 months during the five years prior to the naturalization application. Upon becoming a U.S. citizen, an individual is entitled to all U.S. citizenship benefits, including the right to vote and to hold public office.

How long must I remain in the United States each year?

The first requirement of any investor is to enter the United States within 180 days of receiving a visa from the overseas U.S. Consulate office. The investor must then establish residency in the United States. Evidence of intent to reside includes opening bank accounts, obtaining a driver’s license or social security number, paying state and federal income taxes, and renting or buying a home.

Can I travel?

A conditional or permanent resident is entitled to travel freely outside of the United States for less than six months at a time. If such an individual needs to be outside of the U.S. for more than six months, he/she may apply (up to three times) for a travel permit, which is valid for two years. A travel permit indicates that the resident is not abandoning U.S. residency; however, time spent outside of the U.S. counts against the 30 month physical presence requirement for citizenship.

What if I need to travel outside of the U.S. for more than a year?

Before you leave the United States, you may apply for a reentry permit (on form I-131), and you may depart before the reentry permit is approved. You may return to the United States, even after one year, until the reentry permit expires. Reentry permits are valid for two years. You cannot renew a reentry permit, but you can return to the U.S. for a short time and apply for a new one. The second reentry permit may be granted, but subsequent permits may be approved for one year rather than two.

Where can I find more information about the EB-5 visa program?

Further information regarding the application process, requirements, and benefits of the EB-5 visa program is available at http://www.uscis.gov.