What is the EB-5 Regional Center Pilot Program?
In 1990, under section 203(b)(5) of the Immigration and Nationality Act (INA), 8 U.S.C. § 1153(b)(5) the US Congress created the fifth employment-based preference (EB-5) immigrant visa category. Each year, the provision grants 10,000 immigrant visas to qualified individuals seeking permanent resident status on the basis that their investment in a new commercial enterprise will benefit the U.S. economy.
To encourage immigration through the EB-5 program, Congress created a Pilot Program in 1993. The program specifically sets aside 3,000 visas annually for foreign investors who apply through a United States Citizen and Immigration Services (USCIS) designated Regional Center Investment Program. An investor seeking an EB-5 immigrant visa through a designated regional center must generally make a qualifying investment of US $1 million. Certain high unemployment or target employment areas (TEA) qualify for a lesser investment of $500,000. Additionally, the foreign investor must demonstrate that at least 10 jobs were directly or indirectly created through the investment.
What are Regional Centers?
Regional centers are entities, either public or private, that have been approved by the US Citizenship and Immigration Services. Once approved they are allowed to seek and accept foreign entrepreneurs under the EB-5 program to promote economic growth, improving regional productivity and increased capital investment to create jobs in the designated boundaries of the regional center.
- The investor does not have to be involved in the day-to-day operations of the business in which they invest
- The Investor is not required to live in the place of investment and may live anywhere they choose within the United States
- Regional Center program allows for both “direct” and “indirect” job creation in regards to EB-5 investment requirements
- The USCIS dedicates at least 3,000 green cards each year for foreign investors who invest in designated Regional Center investments
A Targeted Employment Area is a geographic location which has high unemployment rates (calculated as an area with an unemployment rate that is at least 150% of the national average) or Rural Areas (has a population of less than 20,000)
Every year, 10,000 EB-5 Green Cards are available from the USCIS. Approximately a third of 10,000 EB-5 Green Cards are set aside for qualifying immigrants who participate in an EB-5 Regional Center project.
When you invest through a Regional Center, the minimum capital requirement is US$500,000 for a project in a rural or targeted employment area (TEA); for projects outside of a TEA or rural area, the minimum capital requirement is US$1,000,000.
Legally yes. However, people from countries that do not have reliable tax recording and financial documentation systems will need to be more actively involved in proving the authentication and source of their investment funds to process an EB-5 visa application.
The most common reason an applicant is rejected for an EB-5 visa is because the applicant cannot prove that the investment capital was legally sourced.
All forms can be found at the USCIS website (http://www.uscis.gov/)
USCIS is a division of the U.S. Department of Homeland Security. USCIS is a government agency responsible for the implementation, administration of immigration and naturalization laws, rules and regulations, functions and policies in the provision of services.
Investor, spouse and any unmarried children under the age of 21 are eligible. It is also possible for adopted children to be included in the family.
Yes. Cloudseed recommends you use your own Immigration Attorney to navigate through the processes involved. We do however have relationships with experienced and highly qualified individuals and can provide referrals upon request.
Your attorney shall prepare the I-526 Petition for you as a Foreign National Investor. Upon approval of the Petition, the Immigration Attorney can prepare your application for Conditional Permanent Residency. Before the end of the two-year Conditional Permanent Residency period, the Immigration Attorney can prepare Form I-829, the Immigrant Petition to Remove the Conditions of your Permanent Residency. Approval of your I-829 is the final step necessary for you to obtain unconditional Permanent Residency.
What is a conditional green card?
A conditional Green Card is a temporary Green Card valid for two years. One year and nine months after it is issued, a three-month window opens up during which an individual must file another application (I-892 petition) with the USCIS to verify that all of the funds have been invested and employment created. When the conditional resident status has been lifted, full resident status is granted and a permanent Green Card is issued.
What is the difference between permanent residency and citizenship?
In most cases, the first step in becoming a U.S. citizen through naturalization is to become a Legal Permanent Resident. Five years of permanent residency is one of the basic requirements for qualifying for naturalization. A second requirement is maintaining a physical residence in the United States for at least 30 months during the five years prior to the naturalization petition.
You have to be a green card holder for 5 years to become a US citizen. This time can include the two years with a “conditional” green card.
Rejection in the past does not disqualify the applicant, unless the reasons relate to immigration fraud or other grounds of inadmissibility. It is imperative all criminal, medical, or U.S. immigration history problems be disclosed to the limited partnership and legal counsel in advance of application.
The first requirement of any investor is to enter the United States within 180 days of conditional green card issuance. The investor must then establish residency in the United States. The United States does not require the investor to have a physical presence in the United States for any given amount of time. However, under U.S. law, the investor must establish and maintain the “intent” to be a resident. Evidence of intent to reside includes opening bank accounts, obtaining a driver’s license, obtaining a social security number, paying state and federal taxes, and renting or buying a home. The U.S. resident may work overseas if required, based upon the nature of his or her business or profession. For those permanent residents living outside the United States, it is recommended that the investor and family should re-enter the United States no less than once every six months. In some cases, investors may seek the issuance of a “re-entry permit,” which allows the USCIS to grant permission to remain outside the United States for as long as two years.
Yes, you must submit to and pass a medical health examination as part of process before a conditional EB-5 Visa is granted.
No, this is not a requirement. It is highly recommended all documentation and paperwork is translated by your own trusted third-party professional.
A limited partnership combines corporate limited liability with partnership taxation. The Limited Partnership (LP) is formed by submitting a filing with Secretary of State’s office of the State in which the business will be conducted. The Limited Partnership consists of a General Partner and one or more Limited Partners. The LP’s Operating Agreements details the rights and powers of the General and Limited partners, percentages of ownership, and distributions of profits. The General Partner typically manages the day-to-day operations of the business. The Limited Partner(s) can be passive investors and be only liable for the value of their investment. The Limited Partnership income is taxed at the partner level, not at the entity level.
No, the investor is not required to have a certain level of education or business experience.
No. U.S. regulations require the investment to be “at risk” without guarantees or rights of redemption. As with any investment, there is a risk of total loss.The risk factors for each Limited Partnership are specifically addressed and described in the Offering Memorandum for each Limited Partnership. While risk factors differ for each Partnership, general risks also exist and should always be considered.
Any interest that is earned or profits on the investment that result in actual distribution of cash may result in U.S. tax liability. In the event that taxes must be paid, Cloudseed can assist with referring a tax professional. It is extremely important to abide by the laws of the United States, which include not only immigration laws, but also tax laws. We suggest that you seek advice from independent U.S. tax advisers/professionals which will be able to provide personal tax related services.
Designated Regional Centers accept EB-5 investors by placing funds in an escrow account pending I-526 Petition approval. The funds may only be released upon approval of I-526 Petition unless otherwise agreed upon in the Offering Memorandum.
What is an Accredited Investor?
In the U.S., an individual is considered to be an accredited investor if he or she has a net worth in excess of $1 million (excluding the value of their primary residence), or has income exceeding $200,000 each year for the last two years, $300,000 with spouse if married, and has reasonable expectation to earn the same amount in the current year and beyond.
For more information, please contact the U.S. Securities and Exchange Commission
Can money gifted by a Parent, other Relative, or Business be used for an EB-5 Investment?
Yes. It must be demonstrated that the gift is an actual transaction and the gifted funds are not to be given back after permanent resident status is granted.
Yes. The regulations permit indebtedness secured by the investor’s own assets to count as “capital.” This rule allows for bank loans to be used to invest in EB-5 projects.