The EB-5 application process begins with the filing of Form I-526E, for regional center investments, or Form I-526, for single petitioner investments. Either petition has multiple requirements that must be fulfilled in order to be approved by U.S. Citizenship and Immigration Services (USCIS) and be issued a Green Card.
EB-5 investment amount
The minimum required investment capital is $800,000 for an investment made in a rural or high-unemployment area targeted employment area (TEA) or an infrastructure project. For projects that do not meet these qualifications, the minimum amount is $1,050,000.
At the time of I-526E or I-526 filing, the capital must be invested or in the process of being invested.
Investment source of funds must be ‘lawfully acquired’
USCIS demands this of each investor: “The investment capital was obtained by the investor through lawful means.” The Immigration Service will require documented evidence to establish a legal source of funds.
Potential sources of funds include:
Employment earnings
Funds from income-generating assets
Funds from non-income-generating securities
Bank account deposits
Inheritance
Gifts
Divorce or legal settlements
USCIS also requires a lawful path of funds — showing how the investment capital was transferred to the new commercial enterprise; and the Immigration Service will review the source of funds for the investment administration fees as well.
Investment is made into a new commercial enterprise
USCIS states, “The required amount of capital has been invested or is actively in the process of being invested in the new commercial enterprise.” A new commercial enterprise (NCE) must be a U.S. for-profit business established after November 29, 1990.
For investors investing through a regional center, the NCE pools the investor capital and then makes an investment into the job-creating entity (JCE).
For investors who invest directly into the job-creating entity without a regional center, the new commercial enterprise is the business the investor will manage and which will created the required jobs.
Under the EB-5 Reform and Integrity Act of 2022 (RIA), qualifying investments cannot be made in publicly available bonds, either municipal or for profit).
‘At risk’ requirement for invested capital
The Immigration Service further requires that the immigrant investor’s capital be “at risk” for a chance for loss and a chance for gain.”
Investments made after the enactment of RIA only need to be investment sustained at risk for two years from the time of investment; however, at the time of this publication, there is no clear guidance from USCIS as to what is considered the start of the investment, and several interpretations may be considered. Investments made prior to the RIA must be sustained at risk until the end of conditional permanent residency.
Impermissible debt arrangements
USCIS will not allow any qualifying investment capital to provide for any contractual right to repayment: “In general, the petitioner may not enter into the agreement knowing that he or she has a willing buyer at a certain time and for a certain price.” Prohibited arrangements are not limited to guarantees of repayment to be impermissible, and include mandatory redemptions and options exercisable by the investor.
If the investor is granted any rights that USCIS determines to have value, the determined value will be deducted from the investment amount; if such a deception lowers the amount of eligible invested capital below the minimum investment amount, this will result in an I-526E or I-526 petition denial by USCIS.
I-526E filing must follow filing of I-956F petition
A regional center investor’s I-526E regional center petitions must be filed after the associated regional center has filed its Form I-956F, Application for Approval of an Investment in a Commercial Enterprise.
Engagement in management of NCE
USCIS states, “The immigrant investor is or will be engaged in the management of the new commercial enterprise.”
Contrary to popular opinion, there is no difference in the USCIS management requirements for direct and regional center investors. For either type of investor, this condition may be fulfilled merely by having voting rights in the NCE’s business policy.
Job creation
USCIS states, “The new commercial enterprise will create at least 10 full-time positions for qualifying employees.” The I-526E or I-526 petition must provide credible evidence that jobs are likely to be created within two years of the petitioner receiving their conditional permanent residency, based on the business plan. In the case of a project sponsored by a regional center, an economic impact analysis will need to justify the expected job-creation estimates.
Direct investments may only count direct jobs (determined by a “headcount” of employees hired by the new commercial enterprise). And job counts cannot include the investor, their family members or any non-immigrant aliens.
Regional center job creation is more flexible and includes direct jobs, indirect jobs (supplier-industry employment), and induced jobs (those created in the local economy because of employee spending). This often translates into regional centers needing only one-third of the directly employed headcount that a direct investment might require.
Up to 90% of regional center job creation may include indirect job and induced jobs. This limit is reduced to 75% if construction lasts less than two years. Direct jobs from construction lasting less than two years count as a fraction of the two-year period that such jobs existed. Tenant occupancy can count towards job creation if the jobs are new hires and are not jobs relocated to the project.
