12 Jun Basic Facts About the EB-5 Visa – ACT NOW TO AVOID DISAPPOINTMENT!!

On February 15, 2019, following the longest U.S. government shutdown in history, President Trump signed the Consolidated Appropriations Act, 2019 thereby averting a further government shutdown.  The spending bill funds the federal government and extended the EB-5 Regional Center Program authorization through September 30, 2019.  Although EB-5 stakeholders have definitely stepped up their game in making strides towards reform and long- term reauthorization, the future of the EB-5 program post-September 30th remains dubious SO e-Council Inc. strongly recommends taking advantage of EB-5 opportunities NOW to avoid disappointment!

Background and Details

Visa Classification Description

The United States Citizenship and Immigration Service (USCIS) administers the EB-5 program, established by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Shortly thereafter, by way of a program initially enacted as a pilot in 1992, and regularly reauthorized since then (at least until September, 2015), investors may also qualify for EB-5 classification by investing into projects through Regional Centers, which are entities designated by USCIS to sponsor EB-5 project(s) based on proposals for promoting economic growth.

All EB-5 investors must invest in a new commercial enterprise, which is a commercial enterprise:

Established after Nov. 29, 1990; or

Established on or before Nov. 29, 1990, that is:

Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or

Expanded through the investment so that at least a 40-percent increase in the net worth or number of employees occurs

A “Commercial Enterprise” means any for-profit activity formed for the ongoing conduct of lawful business including but not limited to:

• A sole proprietorship
• Partnership (whether limited or general)
• Holding company
• Joint venture
• Corporation
• Business trust, or
• Other entity (if certain conditions are met).

This definition includes a commercial enterprise consisting of a holding

company and its wholly owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business.

Note: This definition does not include non-commercial activity such as owning and operating a personal residence.

NOTE: Non-profit entities do NOT qualify as “Commercial Enterprises” for the purposes of the EB-5 program.

Job Creation Requirements

An EB-5 investor must invest the required amount of capital in a new commercial enterprise that will create full-time positions for at least 10 qualifying employees.

• For a new commercial enterprise not located within a regional center, the full-time positions must be created directly by the new commercial enterprise to be counted. This means that the new commercial enterprise (or its wholly owned subsidiaries) must itself be the employer of the qualifying employees.
• For a new commercial enterprise located within a regional center, the full-time positions can be created either directly or indirectly by the new commercial enterprise.
  • Direct jobs are those jobs that establish an employer-employee relationship between the new commercial enterprise and the persons it employs.
  • Indirect jobs are those jobs held outside of the new commercial enterprise but that are created as a result of the new commercial enterprise.
  • In the case of a troubled business, the EB-5 investor may rely on job maintenance.
  • The investor must show that the number of existing employees is being, or will be, maintained at no less than the pre-investment level for a period of at least 2 years.

A troubled business is a business that has been in existence for at least two years and has incurred a net loss during the 12- or 24-month period prior to the priority date on the immigrant investor’s Form I-526. The loss for this period must be at least 20 percent of the troubled business’ net worth prior to the loss. For purposes of determining whether the troubled business has been in existence for two years, successors in interest to the troubled business will be deemed to have been in existence for the same period of time as the business they succeeded.

A qualifying employee is a U.S. citizen, lawful permanent resident or other immigrant authorized to work in the United States including, but not limited to, a conditional resident, a temporary resident, an asylee, a refugee, or a person residing in the United States under suspension of deportation. This definition does not include the immigrant investor; his or her spouse, sons, or daughters; or any foreign national in any nonimmigrant status (such as an H- 1B nonimmigrant) or who is not authorized to work in the United States.

Full-time employment means employment of a qualifying employee by the new commercial enterprise in a position that requires a minimum of 35 working hours per week. In the case of the regional center program, “full-time employment” also means employment of a qualifying employee in a position that has been created indirectly that requires a minimum of 35 working hours per week.

A job-sharing arrangement whereby two or more qualifying employees share a full-time position will count as full-time employment provided the hourly requirement per week is met. This definition does not include combinations of part-time positions even if, when combined, the positions meet the hourly requirement per week.

Jobs that are intermittent, temporary, seasonal, or transient in nature do not qualify as permanent full-time jobs. However, jobs that are expected to last at least 2 years are generally not considered intermittent, temporary, seasonal, or transient in nature.

Capital Investment Requirements

Capital means cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. All capital shall be valued at fair-market value in United States dollars. Assets acquired, directly or indirectly, by unlawful means (such as criminal activities) shall not be considered capital for the purposes of section 203(b)(5) of the Act.

Note: The immigrant investor must establish that he or she is the legal owner of the capital invested. Capital may include the immigrant investor’s promise to pay (a promissory note) under certain circumstances.

CURRENT Required minimum investments are:

• General. The minimum qualifying investment in the United States is currently $1M.
• Targeted Employment Area (High Unemployment or Rural Area): The minimum qualifying investment either within a high-unemployment area or rural area in the United States is currently $500,000.

A targeted employment area is an area that, at the time of investment, is a rural area or an area which has experienced unemployment of at least 150 percent of the national average rate.

A rural area is any area not within either a metropolitan statistical area (as designated by the Office of Management and Budget) or the outer boundary of

any city or town having a population of 20,000 or more according to the most recent decennial census of the United States.

How e-Council Inc. Can Help

Getting an EB-5 visa is a delicate and difficult process, whether on the side of the project (raising EB-5 capital) or the investor (seeking the Green Card). When your future and that of your family, together with a significant amount of money, are at stake, you simply cannot afford to attempt to undertake the process alone. As e-Council’s principal Lauren Cohen regularly emphasizes, “Stay In Your Lane” and do what you do best – and hiring an experienced immigration concierge whose team of experts will save you both time and money as you strive to achieve your EB-5 goals, no matter how lofty.

To find out more about e-Council Inc.’s immigration concierge and other services, please contact us at info@ecouncilinc.com or 1-866-724-0085

e-Council Inc.’s blog, website, newsletter and other forms of communication contain general information about legal and related matters. The information is not legal advice and should not be treated as such. You must not rely on the information on this website as an alternative to legal advice. If you have any specific questions about any legal matter, consult your attorney or other professional legal services provider.