The EB-5 Immigrant Investor Visa: An excellent tool to rebuild America’s economy
It is simply a great idea. Invest lawfully earned money into US businesses, create significant jobs and you can live permanently in the United States. With the downturn of the US economy, many companies have failed, unemployment has been in double digits, US banks are more constrained in making loans or providing lines of credit and US investors are unable to or more timid about investing. As a result, many US Companies are having trouble funding operations sufficiently and a the economic climate has a chilling effect on establishing new companies or expanding existing ones. While the United States government has been borrowing money from foreign countries, this has simply expanded the massive government debt. A better solution is obtaining international investment from individuals who want to live in the United States.
It is a great time to invest in the United States, commercial real estate is more affordable. Many properties can be purchased at auction. I represented an investor from India who purchased a hotel at auction and converted it into an assisted living facility. It was soon at 100% occupancy and serving the increasing aging population with a secure Alzheimer’s and dementia center. Within a few years it increased in value by 150% and created a healthy cash flow. It also created more than 30 jobs for US workers. The investor then leveraged his investment and purchased three more hotels and saved over 30 more jobs for Americans.
My client utilized the EB-5 Immigrant Investor visa to petition for Permanent Residence for herself and her immediate family. The EB-5 visa was created for investors to obtain permanent residency (green card) by investing capital into a US company that creates ten jobs for Americans or legal permanent residents. Generally, the amount of investment is $1 Million unless the company is in a target employment area. Target employment areas have an unemployment rate of at least 150% of the national average. This means if the US unemployment rate is 10%, the target area must be 15%. Target employment areas can also be rural areas, cities or towns with a population of less than 20,000. Investment into target areas requires $500,000.
Investment of capital must be into a new company. However, that does not mean the investor must establish the company. A new company is defined as one established after Nov. 29, 1990. The investment can also be made into a troubled business, which has lost 20% of its net worth in one of the last two years. Investments into troubled business must retain current number of employees at time of investment. The investment can also be used to expand a business if it results in at least forty percent in the net worth of the business or in the number of employees of the business.
The investment can consist of cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets of the investor , provided the investor is personally and primarily liable for the indebtedness and that the new company does not secure the debt. The EB-5 regulations also permit pooling of the investment with other EB-5 seekers. The regulations also permit investing along with others who are not seeking the visa.
The investor must prove the source of funds and the regulations require that the capital was acquired legally. This must be proven through submission of tax returns, payroll records, business registration records and other documents indicating the source of money.
The investor must have a managerial role. This can take the shape of a management or executive position, a position as a corporate officer or member of the board of directors or a limited partner, as long as the investor has the same rights, powers and duties normally granted limited partners under the Uniform Limited Partnership Act.
The employment must be created within two years and must consist of full-time jobs. The workers must be employees and cannot be contractors. The jobs cannot temporary jobs such as construction workers. However, some permanent construction jobs are permissible. If the EB-5 application is utilizing the lesser amount under the target employment area, the jobs must be created in that area.
The EB-5 visa also contains a Pilot Program which permits investment into a Regional Center, an economic unit which is involved with the promotion of economic growth as approved by USCIS. An investor may obtain EB-5 status by investing into a regional center project. One distinction between a regional center case is that jobs can be directly or indirectly created by the investment. Indirect job creation is determined by an economic analysis utilizing formulas recognized by USCIS. An example of indirect job creation is investment into building an apartment complex or housing development may create indirect jobs through grocery stores, restaurants or retail establishments built to serve the residents.
In general the process for obtaining an EB-5 is to file the initial petition with evidence that the investor has invested or is in the process of investing capital into the new commercial enterprise with a comprehensive business plan detailing how the jobs will be created. If the petition complies with the applicable regulations, the immigrant investor will receive a conditional green card. After a year and a half and before two years, the investor must file a petition to remove the conditions. The petition must establish that the business plan was followed, the requisite sums of money were invested and that the jobs were created. The regulation for when the jobs are to be created is unclear, as they require the investor created or can be expected to create within a reasonable period of time ten full-time jobs for qualifying employees. Documentation of proof may include payroll records, tax documents and I-9 forms.
America is still the land of opportunity and a wonderful place to live, our companies need access to capital and our people need jobs. The EB-5 visa is an excellent way to partner with investors from around the world and provide a win-win solution.
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Today’s guest blog post comes from immigration attorney, Jon Velie.
Jon Velie is owner and President of Velie Law Firm, one of the nation’s premier immigration and corporate law offices. Doing business as Velie Law Firm and OnlineVisas.Com, Jon Velie has represented world renowned athletes and entertainers, and major corporations such as Tyson Foods and Lucent’s Bell Laboratories.
Jon has testified in court as an expert in immigration, has briefed three cases to the United States Supreme Court, as well as winning a Washington DC Court of Appeals case labeled “the most significant civil rights case in the 21st Century”. He has addresses US Congressional and agency panels as well as universities across the United States.