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The EB-5 Process in 2023

The EB-5 process, from making an investment to unconditional permanent residency, involves four steps: investing required amount in a job-creating business, filing Form I-526E (regional center) or I-526 (individual investor), establishing conditional permanent residency by maintaining the investment at-risk for two years, and filing Form I-829 to remove conditions of permanent residency.

Making a qualifying investment

The EB-5 program is predicated on immigration by investment, and a qualifying investment must fulfill program requirements. An investor should select an investment based on two fundamental criteria: 

  1. The likelihood of immigration success This means obtaining Green Cards for the principal investor derivative family members. Immigration success depends on a two-part approval process from the U.S. Citizenship and Immigration Services (USCIS). The first part involves a review of the I-526E/I-526 petition, with USCIS determining whether the program requirements, including job creation, are likely to be fulfilled; the second step involves, at the end of conditional permanent residency, reviewing the I-829 petition for evidence that the job-creation and other program requirements were fulfilled. 

  2. The likelihood of financial success This should be viewed as the full and timely return of the petitioner’s investment capital. Investors should realize that immigration success is not tied to financial success, and it is possible to receive USCIS approval and permanent residency (Green Cards), but to receive only a portion or even none of the investment capital back.

EB-investment amount

The standard EB-5 investment is $1,050,000. Investments made in a rural area, a high-unemployment area, or an infrastructure project are $800,000. EB-5 investments that qualify for the reduced investment amount make up the vast majority of investments in the market today.

Financial considerations of making an EB-5 investment

Petitioners want to have confidence that they will receive the full and timely return of their investment capital; and while EB-5 investments are not primarily undertaken to deliver profit, some investors will be interested in potentially receiving an appealing rate of return on their investment. 

Sometimes an EB-5 investment offers a higher rate of return to compensate for a higher level of risk, and sometimes the investment is structured with a higher return to attract investors more quickly. The only way to know is to complete a comprehensive due diligence review of the EB-5 investment to ensure you are aware of the risks associated to the investment.

What kind of project is ideal for an EB-5 investment?

Historically, real estate was the preferred industry for EB-5 investments; this was because real estate projects need only spend their full project budget to get credit for job creation, as job creation is usually based on an approved econometric study, which uses the project budget as its main input. So spending the project budget resulted in a predictable number of jobs being created. 

However, as the new EB-5 Reform and Integrity Act (RIA) changed the qualifications for Targeted Employment Areas (TEAs), many commercial projects located in urban areas are no longer able to qualify as TEAs and thus for the lower investment amount. 

For regional center investors interested in faster I-526E processing, they may want to consider rural projects that offers “priority processing,” or projects in the national interest or that otherwise meet the conditions for expedited processing.

Investors from backlogged countries can avoid a wait time of many years for an available visa by ensuring they invest in an EB-5 project that qualifies for visa set-asides.

Time required to review and select an investment

Depending on the number of projects to be reviewed and the level of due diligence you plan to undertake, this process can take between one week and many months.

How to make an EB-5 investment into a regional center-sponsored project

To make an investment into a regional center project, a petitioner will sign a subscription agreement to join either the partnership or the limited-liability company. The investment capital is then, in most cases, wired to an escrow account and then released into the job-creating entity upon predetermined conditions.

I-956F must be filed before any investors petitions

A Form I-956F, Application for Approval of an Investment in a Commercial Enterprise, must be filed by a regional center before any investor files an I-526E or I-526 petition. The I-956F form is associated with a particular investment project and associated new commercial enterprise (NCE).

The I-956F is similar to the prior Form I-924 for exemplar approval under the pre-RIA regulations.

Does a USCIS-approved regional center guarantee success for an immigrant investor? 

No. USCIS says on their website, “Approval of an EB-5 regional center application does not in any way constitute USCIS endorsement of the activities of that regional center, guarantee compliance with U.S. securities laws, or minimize or eliminate risk to the investor.” Investor due diligence is vital when choosing an EB-5 investment.

Filing the I-526E petition

The initial investor application is Form I-526E (regional center petition) or I-526 (standalone petition), which gets filed with USCIS. The I-526E/I-526 petition must show that the investor has made or is the process of making a qualifying investment.

Lawful source and path of funds

USCIS reviews the I-526E petition to ensure that the investment capital was lawfully acquired, which also applies to the administration fee charged by the EB-5 fund. And the path of the investment capital — from investor to EB-5 fund — must also be proven lawful.

The investment capital can originate from many and multiple sources, including:

Investment in an EB-5 fund

The petitioner’s capital is invested in an EB-5 fund. The fund is also referred to as the new commercial enterprise or (NCE), which must be an American for-profit business created after November 29, 1990.

Investor engagement in management of the fund

Many investors and even EB-5 professionals are under the false assumption that only regional center investments can be passively managed and that direct EB-5 investments require active management. This is not true, especially with regards to the recent model of making a direct investment into an existing business. 

USCIS has the same management requirements for either type of investment and even some direct may satisfy this requirement with voting rights. Of course, for investors who choose to run their own direct investment business themselves, they are a likely to be much more involved in the day-to-day operations of the investment.

Invested capital must be ‘at risk’

The petitioner’s investment capital must be “at risk” for loss but also have a chance for gain. No guarantee of a return of some or all of the invested EB-5 capital is allowed. The RIA now requires that capital is at risk for two years from the time of the investment; however, exactly when USCIS will consider the investment to have officially begun is not yet defined and open to interpretation. 

Job creation

An I-526E or I-526 petition must demonstrate evidence that 10 full-time U.S. jobs are likely to be created within two years of the investor receiving conditional permanent residency. Some regional center investments may have already created the requisite number of jobs even before an EB-5 investment is made (see bridge financing).

Regional center job creation allows for direct, indirect (supplier employment), and induced (employment in the local economy) jobs. 

Alternatively, direct investments may only count direct jobs, and may not count the investor or family members who work in the business as newly created jobs.

Timeline for filing and processing an I-526 petition

Typically, it takes an experienced EB-5 immigration lawyer about two months to prepare the I-526E petition, depending on the complexity and country of the source of the investor’s funds. 

I-526 processing times are more complex and vary based on the current processing efficiency of USCIS as well as the the type of processing an investment qualifies for.

Standard processing is at the time of this publication about four years. Expedited processing is estimated to be about six months to a year; and new priority processing is expected to be about a year.

Establishing conditional permanent residency

Approval of an I-526E petition permits the petitioner and their family to be issued conditional Green Cards. Depending on where the investors are living, this can happen in one of two ways:

Within the U.S.: file Form I-485 to adjust status

Investors already living in the U.S. file Form I-485 to adjust their status from non-immigrant to permanent resident status. This form can be filed immediately after I-526E or I-526 approval. 

Evidence required includes birth certificate, marriage or divorce certificate, criminal history, photographs, passport copy and copy of non-immigrant visa. Biometric screening is required after filing for applicants aged 14 to 79.

Outside the U.S.: file Form DS-260 for consular processing

Investors living outside the U.S. will file Form DS-260 with a U.S. embassy or consulate. This process entails two steps: application and an interview. 

Application documentation includes biographical information such as address history, employment history, military information, and a disclosure of social media for the past five years. The interview will take place at the U.S. consulate or embassy in the petitioner’s country of residence.

Approval of I-485 or DS-260: two-year conditional permanent residency

Approval of either petition will result in conditional Green Cards being issued to the petitioner and their eligible family members. These Green Cards allow each of them to live and work anywhere in the U.S. as conditional permanent U.S. residents for two years. 

During this period they should observe physical presence requirements and not leave the U.S. for more than a year; doing so would require a re-entry permit.

Timeline for adjustment of status or consular processing

From FY 2017 to FY 2022, the median adjustment of status processing times for employment-based forms across all service centers has ranged from seven months (FY 2017) to 10.6 months (FY 2018). Consular processing in recent years, typically has taken six to 12 months. 

Concurrent filing

The RIA now allows for petitioners living in the U.S. on a non-resident visa (typically H-1B, E-2 and F-1) and whose priority date is “current” on the Visa Bulletin the ability to file their I-526E petition and I-485, for adjustment of status, at the same time. 

The benefit of concurrent filing is that it allows EB-5 investors lawful permanent resident status while awaiting adjudication of their I-526E petitions. Concurrent filing lifts the restrictions that come with H-1B, E-2 and F-1 visas, allowing foreign nationals to freely live, work and study in the U.S. 

Filing Form I-829 petition to remove conditions

The last step of the EB-5 process is the removal of conditions related to permanent residency. This is done by filing Form I-829, to provide evidence that all EB-5 program requirements, including the creation of 10 jobs, have been satisfied.

Who files the petition

Typically the main petitioner will file a Form I-829 for all members of the original petition, but as divorce can happen, family members may file their own I-829 petition. Usually an EB-5 immigration lawyer will prepare the petition.

When to file

This petition must be filed in the 90-day period prior to the end of the petitioner’s two-year conditional residency.

I-829 requirements

  • Establishing conditional permanent residency

  • Establishment of a commercial enterprise as per federal tax returns

  • Qualifying investment was made, as per bank statements, audited financial statements, or other proof of capital investment into the new commercial enterprise

  • Creation of required jobs 

  • Proof business plan was followed as per tax documents, payroll records, etc.

  • USCIS biometrics appointment 

  • Legal documents related to criminal record (if applicable)

Timeline for removal of conditions

Recent USCIS I-829 median processing times during the pandemic have ranged from 34.5 to 45.5 months; but prior to the pandemic, I-829 processing took about two years. We expect as the effects of the COVID-19 recede, processing efficiency will continue to improve and processing times will return to pre-pandemic numbers.

Conclusion

Upon approval of the I-829 petition, the petitioner and their dependents receive 10-year permanent Green Cards that can be renewed indefinitely. 

Five years from the start of conditional permanent residency, a petitioner is eligible for U.S. citizenship.

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