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EB-5 IMMIGRANT INVESTOR PROGRAM

INTRODUCTION

Congress established the EB-5 Program in 1990 to bring new investment capital into the country and to create new jobs for U.S. workers. The EB-5 Program is based on our nation's interest in promoting the immigration of people who invest their capital in new, restructured, or expanded businesses and projects in the U.S. and help create or preserve needed jobs for U.S. workers by doing so.

Immigrants who invest their capital in job-creating businesses and projects in the U.S. receive conditional permanent residence status in the U.S. for a two-year period. After two years, if the immigrants have satisfied the conditions of the EB-5 Program and other criteria of eligibility, the conditions are removed and the immigrants become unconditional lawful permanent residents of the United States. The conditional status period exists to ensure that the infusion of investment capital is sustained and the U.S. jobs are created.

VISA ALLOCATION

Congress allocates 10,000 visa numbers per year (including investors' spouses and children under 21) to EB-5 immigrant investors. Of these 10,000 visa numbers, 3,000 visa numbers are reserved by USCIS for investors who invest in Targeted Employment Area (TEA) and 3,000 visa numbers are reserved for investors who invest in commercial enterprises affiliated with regional centers.

China mainland-born investors make up about 85% of all the visa numbers allocated to the EB-5 Program. After the Chinese, South Korea (2.1%), Mexico (1.2%), Taiwan (1.2%), Vietnam (1.1%), and Russia (0.9%) make up the largest percentages of all EB-5 immigrant investors (45% increase), including adjustments of status. Vietnam has the largest increase in the percentage of the overall EB-5 investors between the fiscal years of 2013 and 2014, while South Korea has the largest decrease of EB-5 investors.

EB-5 VISA APPROVAL/DENIAL RATES

From 2005 to 2012, a total of 12,410 submissions of Form I-526 have been received by USCIS. Of these, 7,923 applications have been approved and 1,675 applications have been denied. That's an 83% approval rate. Most EB-5 applications that are denied because the EB-5 investors failed to prove the legal source of their investment capital.

THE AMOUNT OF CAPITAL THAT MUST BE INVESTED

The statute governing the EB-5 Program provides that the immigrant investor must invest at least $1,000,000 in capital in a new commercial enterprise that creates at least 10 jobs. This means that the present fair market value, in United States dollars, of the immigrant investor’s lawfully-derived capital must be at least $1,000,000.

An exception exists if the immigrant investor invests his or her capital in a new commercial enterprise that is principally doing business in, and creates jobs in, a “targeted employment area.” In such a case, the immigrant investor must invest a minimum of $500,000 in capital.

TARGETED EMPLOYMENT AREA

The statute and regulations governing the EB-5 Program defines a “targeted employment area” as, at the time of investment, a rural area or an area that has experienced unemployment of at least 150 percent of the national average rate. A “rural area” is defined as 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 (based on the most recent decennial census of the United States). In other words, a rural area must be both outside of a metropolitan statistical area and outside of a city or town having a population of 20,000 or more.

NEW COMMERCIAL ENTERPRISE LOCATED WITHIN A REGIONAL CENTER

For a new commercial enterprise that is located within a regional center, the EB-5 Program provides that the full-time positions can be created either directly or indirectly by the new commercial enterprise. Investors investing in a regional center are subject to all the same program requirements except that they may rely on indirect job creation as demonstrated through reasonable methodologies. Indirect jobs are those that are held outside of the new commercial enterprise but are created as a result of the new commercial enterprise. For indirect jobs, the new full-time employees would not be employed directly by the new commercial enterprise. For example, indirect jobs can include, but are not limited to, those held by employees of the producers of materials, equipment, or services used by the new commercial enterprise. Indirect jobs can qualify and be counted as jobs attributable to a regional center, based on reasonable economic methodologies, even if they are located outside of the geographical boundaries of a regional center. For purposes of demonstrating indirect job creation, petitioners must employ reasonable economic methodologies to establish by a preponderance of the evidence that the required infusion of capital or creation of direct jobs will result in a certain number of indirect jobs.