28 Jul Taking the Guesswork out of EB-5 Preparation

The opportunity to do business and secure permanent residence in the U.S. is an attractive proposition for many investors. So why do so few people take advantage of the opportunity?

Since the beginning of the EB-5 program and the passage of the Immigration Act of 1990, participation has been lower than expected. In 2005, a Government Accountability Office Report found that a principal reason for the lack of participation in the program was the “onerous application process” involved.[1] This is definitely not news to those involved in the EB-5 process, which makes it that much more important for stakeholders to pull together the most sophisticated, professional team of EB-5 experts to make the process as seamless as possible.

While demand for EB-5 visas has grown recently – particularly among Chinese investors in real estate-based projects – some potential candidates remain concerned about the red tape and bureaucracy involved, venture uncertainty, and fraud within the industry.[2] While market fluctuations make it difficult to ensure the success of any venture, a savvy investor can avoid governmental red tape and potential fraud by engaging professionals with a proven history of success in the EB-5 space. Choosing experienced professionals equips the investor with the tools to be able to anticipate potential obstacles before they arise.

The multi-disciplinary team of experts at e-Council Inc. provides guidance, EB-5 readiness assessments, and in-depth preparation services. Attorneys with on-the-ground knowledge of emerging EB-5 issues manage the team. The Founder herself is a beneficiary of the immigration process.

The professionals at e-Council Inc. also assist clients with due diligence in vetting broker dealers. All agreements must comply with applicable securities laws and issues, and promoters should provide ongoing performance data and details about job creation. Project compliance accountability ensures transparency and highlights any potential problems that may arise.[3] (See also https://ecouncilinc.com/how-to-vet-an-eb-5-broker-dealer/)

To take the guesswork out of the EB-5 application process, the potential investor should become familiar with the EB-5 visa process. The investor’s path to EB-5 approval involves several stages:

1. Identifying an EB-5 project

The selected project may be a direct investment or a more passive investment through a Regional Center.  It is essential to ensure that the selected project meets applicable EB-5 requirements before proceeding.  The following are the basic requirements for any EB-5 case:

• The minimum investment amount is currently $1 million or $500,000 in a Targeted Employment Area.
• The project must create at least 10 new full-time U.S. jobs.
• All investments must involve risk, and there can be no guarantees that the principal investment will be returned.
• The investor must have at least an advisory level of participation in the management of the new enterprise.
• The investor should also be prepared to provide sufficient evidence of the “Source of Funds” for the capital being used for the investment.

2. Prepare Capital Investment and I-526 Preparation

Once a project has been selected, the required investment must be made. In many cases, the funds are placed in escrow pending I-526 approval. In other cases, the investment is made directly into the new enterprise to cover start-up or expansion expenses. Once the I-526 petition is prepared and filed, the applicant must generally wait 12-18 months [4] to find out whether or not the application has been approved.

3. Two-Year Conditional Permanent Residency

Upon approval of the I-526 petition, the investor and his family are entitled to file for conditional permanent residency, provided that visa numbers are immediately available. The period of conditional permanent residency is two years.

4. I-829 Petition and Removal of Conditions

Two years following the granting of conditional permanent residency, the applicant is required to submit an I-829 petition to remove the conditions on residency.  Adjudication of the I-829 petition is currently six to eight months after receipt. (See footnote (3))

Armed with the right information and guidance from professionals, the EB-5 application process need not involve complications. Professionals with proven experience can expedite the process and clear up questions or difficulties that can arise on the way.

To inquire about our wide range EB-5 services such as our due diligence services and best-in-class Matter of Ho-compliant business plans, please contact us at info@ecouncilinc.com.

e-Council Inc.’s website, newsletter and other forms of communication contain general information about legal 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 from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.

[1] https://en.wikipedia.org/wiki/EB-5_visa

[2] http://www.ibtimes.com/eb-5-investor-visa-demand-booming-dominated-chinese-plying-cash-us-real-estate-1851706

[3] http://www.prevailcapital.com/eb5-broker-services/why-eb5-broker-dealer/

[4] These timelines are subject to change.  Please reference https://egov.uscis.gov/cris/processingTimesDisplay.do for updated timelines.