The EB-5 program fundamentally requires an investor to select an eligible investment that is “at risk” and one that creates 10 full-time U.S. jobs. The investment amount is $900,000 in a Targeted Employment Area (TEA) or $1,800,000 in a non-TEA. The investor must file an I-526 application.
Their I-526 petition is processed and adjudicated. If the investor’s petition is approved, and the investor is currently living in the U.S., he or she then files a Form I-485 for adjustment of status. An investor with an approved I-526 who resides in another country would file a DS-260 to adjust their status and become a conditional permanent resident.
Conditional permanent resident status lasts for two years. Three months before the end of the two-year conditional permanent residency, an investor files an I-829 petition to remove conditions.
Upon approval of an I-829 petition, the investor becomes a permanent resident of the U.S. That investor, his or her spouse and unmarried children under 21, can now live in the U.S. permanently and, after five years, potentially become an American citizen.
Step 1: Choosing an EB5 investment project that meets program requirements
The first step entails selecting a “suitable” project and making sure the investor, his or her capital, and the chosen project meets EB-5 program requirements.
Most EB-5 investments are made in what is called the regional center program. This means an EB-5 project is sponsored by an organization, the regional center, that is approved by U.S. Citizenship and Investor Services (USCIS) to promote economic growth in a specific region.
The capital is invested in an entity called a New Commercial Enterprise (NCE), a newly formed company that exists to conduct lawful for-profit activity. A Manager or General Partner makes decisions on behalf of the NCE.
The invested capital must be proven to be from lawful sources. Other requirements include that the business plan is credible and “matter-of-Ho” compliant (a legal precedent decision that defines a comprehensive business plan).
The investment project must create 10 new American jobs for every EB-5 investor. Additionally, the investment capital must be placed “at-risk,” meaning there is a chance for gain and risk of loss — and no guarantees of return of capital. Further, any investment made in a Targeted Employment Area (TEA) must meet the specific TEA requirements.
Because of these complex and stringent requirements such as job creation, an intelligent investor must ensure due diligence is fully conducted on a project to determine that it is eligible to meet EB-5 requirements and that there is a strong potential that it will result in getting an EB-5 Green Card.
To this end, exemplar approval (USCIS approval of project documents before they are filed with a petition) or a prior I-526 approval are often positive indicators that a project meets program requirements. Keep in mind that exemplar approval will not be binding if there is a misrepresentation or in the event, there is a material change in the business plan since the I-526 was filed. Also, exemplar approval does not guarantee the project will create the estimated jobs or that the project has less risk for failure.
The other desired outcome, the full return of the investor’s capital, requires an experienced evaluation of financial risk, including the capital stack (the amount and repayment position of EB-5 money versus developer equity and other non-EB-5 loans). In an ideal scenario, EB-5 capital is in “first position” for repayment and is also fully secured by the project company’s assets.
Exit strategy is another investment factor that bears consideration as an investor should want an exit strategy that coincides with their I-829 filing date, when their investment no longer must fulfill the “at-risk” requirement.
Another important factor to consider when choosing a project is that the likelihood of a Green Card and a high rate of return are not usually found together in a project. A higher rate of return often will come with a higher risk level. If your ultimate goal is a Green Card, be careful of falling in the trap of looking for the highest ROI.
Step 2: Investment of capital & the I-526 application
It should be said that before committing to the Green Card by investment program known as EB-5, an applicant should engage the services of an experienced immigration lawyer. The process — including a substantial amount of money and time — is too significant to undergo without expert guidance.
A Green Card by investment applicant must invest either $900,000 for a TEA investment or $1.8 million for a non-TEA investment. This capital can derive from a number of sources including stock, tangible property, or cash equivalents acceptable in the U.S. market.
When making an EB-5 investment, the investor enters a subscription agreement to give that investor an ownership interest in the New Commercial Enterprise. The investor capital is usually wired to an escrow account that is controlled by an appointed escrow agent. That investor’s immigration lawyer gives evidence of this investment by filing an I-526 petition with the USCIS.
The processing time for an I-526 petition can be two and a half years or more. Once USCIS adjudicates a petition, they will issue an approval or denial or a RFE (request for evidence). In the unfortunate case that an I-526 application is denied, most NCE’s will refund the applicant’s investor capital.
Understand EB5 refund obligations
An investor should fully review and understand the offering documents, escrow agreement, and the limited partnership or operating agreement of the NCE to understand the NCE refund obligations. Some NCE’s offer a full refund guarantee in case of I-526 denial; other NCEs will hold back 10%-20% of all investor funds in an escrow account to return to denied investors. And some NCE’s will promise to make reasonable efforts to replace any denied investors.
Step 3: Conditional Permanent Residency
If an EB-5 petitioner’s I-526 is approved by USCIS, that investor becomes a 2-year conditional resident of the U.S. Conditional permanent residency is issued in either of two ways:
- If the investor already has a lawful status in the U.S. (they have a current immigrant visa), then they will file Form I-485 for the adjustment of status to conditional permanent residency.
- If the investor does not currently have lawful U.S. status, they will file a Form DS-260 (replaces the older paper form DS-260) to the National Visa Center. The filing is made either through a U.S. consulate or a U.S. embassy in their home country.
Note that either of these routes will require the assistance of an immigration lawyer. If approved, the Green Card is generally issued within 6 – 12 months.
An investor must fulfill “physical presence requirements” during the 2-year conditional residency period; they cannot reside outside of the U.S. for more than a year. If the investor does reside outside of the U.S. for more than one year, he or she would have to obtain a re-entry permit.
Filing an I-485 for Adjustment of Status
After an investor’s I-526 is approved and they are already living in the U.S., they must file an I-485 form to obtain conditional permanent resident status.
The petition itself is six pages long and has a filing fee of $1,140 (plus $85 for biometric services). Required documentation includes the following:
- marriage certificate and divorce certificate (if applicable)
- passport copy & copy of non-immigrant visa proving current U.S. status
After filing, all petitioners between 14 and 79 must conduct a biometric screening which includes fingerprinting.
The investor’s I-485 is processed 10 months or more after filing. While denial is not often common, it can occur in situations of criminal or immigration law violations. While waiting for their I-485 to be processed, a petitioner may file an I-765 Application for Employment Authorization or an I-131 Application for Travel Document.
I-485 approval: Investment Green Card and the next steps
An I-485 approval results in what the investor was hoping for in the very beginning — a Green Card. That investor is now a conditional permanent resident in the U.S. This status has a length of two years. Three months prior to the expiration of this status, the investor must file an I-829 petition for the removal of the conditions of permanent residency. Approval of this petition means the applicant, and his or her spouse and children under 21, can live and work permanently in the U.S.
EB-5 investors with an approved I-526 petition who are not living in the U.S. must file a DS-260 application to obtain conditional permanent residency.
Filing a DS-260 form & interview
This petition will be processed at a U.S. consulate or embassy in the applicant’s home country. The application entails two parts. The first part is the actual application submitted by the petitioner. The application provides biographical information, including previous residences, employment history, and military service history (if this applies).
The second part of the application is the interview, held at the U.S. consulate or embassy of the applicant’s home country. A consular worker assists in this portion of the application process. The applicant may be asked to provide documents such as birth certificate, passport, and marriage certificate (if applicable). When the interview is over, the application process is completed.
When an investor’s DS-260 application is approved, he or she is issued conditional permanent resident status. The main petitioner and their family members can move to the U.S. to live and work as conditional permanent residents.
Step 4: Unconditional Permanent Residency & the I-829 application
The last step in the immigration by investment process in the U.S. is for the petitioner to become an unconditional permanent resident.
An investor submits his or her I-829 petition to USCIS 90 days before the anniversary of the date conditional residency was issued. This application demonstrates that the applicant fulfills all of the requirements of the EB-5 program. Typically, USCIS will give a qualifying investor his or her unconditional investment Green Card 22.5 months or more after the I-829 petition was filed.
The Green Card by investment applicant, his or her spouse, and their unmarried children under the age of 21 are then allowed to permanently live and work in the U.S. Five years after that unconditional permanent residency is issued, the investor and his or her family are eligible to become U.S. citizens.