Created by Congress in 1990, the EB-5 Immigrant
Investor Program was designed to stimulate the U.S. economy through job
creation and capital investment by foreign investors. Since its inception, the
Program has impacted thousands of foreign nationals and, in its current form,
is extended through Sept. 30, 2016. Though we have previously addressed the
many myths surrounding the Program, some common misconceptions remain and
should be explained.
1. Investment into the EB-5 Immigrant Investor
Program guarantees a green card (Lawful Permanent Residence).
To participate in the Program, a foreign
national must find a suitable business project in which to invest. The
investment must be at-risk, and a return on the capital is not guaranteed. The
foreign national must file an I-526 petition with USCIS, which is closely
scrutinized regarding both the source of funds for the investment capital and
the validity of the business project. Once the I-526 petition is approved and
an immigrant visa in the fifth preference employment-based immigrant visa category
is available, the foreign national is eligible to adjust status if lawfully in
the U.S. to apply for a green card, or may apply for an immigrant visa abroad
in order to receive a green card after entry.
The green card would be
conditional, granted for only two years; in order to remove the conditions, an
I-829 petition must be timely filed with evidence demonstrating that the
capital is still at-risk and the other requirements have been met. Lawful
Permanent Residence is never guaranteed. Rather, each stage of the process
involves close scrutiny by USCIS, the Department of State if a visa is applied
for abroad, and other relevant government agencies. Each stage’s requirements
are stringent, and approval in the first and/or second stage does not automatically
lead to the non-conditional green card at the conclusion of the third stage.
2. Investment into the EB-5 Immigrant Investor
Program creates a fast path to a green card.
The three stages mentioned above can take
several months or even years to successfully pass through, and there are
additional potential delays depending on immigrant visa category country of
chargeability (usually country of birth). The current processing time for I-526
petitions is 13-14 months, with additional time needed to adjudicate Requests
for Evidence or responses to Notices of Intent to Deny.
Adjustment of Status
applications tend to take at least five months to be adjudicated, while it can
take several months to over a year to complete the process for an immigrant
visa abroad once an immigrant visa is available and depending on the consular
post. Availability of immigrant visa numbers is listed on the Department of
State’s monthly Visa Bulletin; as of January 2016, there is a backlog for
foreign nationals in the fifth preference employment-based category born in
main-land China, such that immigrant visas are available only for those whose
I-526 petitions were received by USCIS before May 1, 2015. The current
processing time for I-829 petitions is 11-12 months. There is no Premium
Processing service available at any of the stages. In sum, there are no
shortcuts to a green card, even (or especially) through the EB-5 Immigrant
Investor Program.
3. The EB-5 immigrant visa is available only to
the wealthy.
The foreign national must make an investment of
at least $500,000 if the project is situated in a defined Targeted Employment
Area known as a TEA (i.e. an area of high
unemployment or rural area), or of at least $1,000,000. Certainly these amounts
are high for the average person. However, the EB-5 Immigrant Investor Program
is not meant for only the wealthy in either design or practice. The source of
funds for the investment must be legitimate, and there are a variety of common
legitimate sources, including gifts or inheritances from family members and
loans from companies of which the investor is a shareholder.
Many of our
clients gather the investment funds from the sale of or home equity loan
against their property, for which they had used their life savings from their
employment to purchase. All of our clients, no matter their source of funds or
overall net worth, participate in the EB-5 Immigrant Investor Program in order
to improve the lives of and opportunities for their families: a relatable and
traditional American pursuit.
4. The EB-5 Immigrant Investor Program benefits
only the wealthy.
The EB-5 Immigrant Investor Program is, by
definition, a job creating program for U.S. workers. An investment into a
Regional Center project must result in the indirect creation of at least ten
jobs, while a non-Regional Center project investment must directly create or
preserve at least ten permanent full-time jobs. EB-5 investments commonly
support the development of hotels, amusement parks, residential and commercial
real estate projects, factories, small businesses, and other local businesses
in urban, rural, and other areas throughout the United States, typically
leading to additional economic opportunities and overall improvement of their
communities.
Additionally, foreign nationals who receive their green cards
through the Program contribute to their local economies. As recently reported
by the Bipartisan Policy Center, the Program has supported the creation of at
least 77,150 jobs and has further raised a minimum of $4.2 billion in investments
for the United States.
5. The EB-5 Immigrant Investor Program is a
runaround of the security checks in place in the U.S. immigration system.
The security of the United States remains of
utmost priority to the government, and foreign nationals investing into the
EB-5 Immigrant Investor Program must undergo the same rigorous background
checks as other green card applicants, by the Department of Homeland Security,
or the Department of State, or both. In fact, their backgrounds are reviewed
both when applying for the conditional green card and for the permanent green
card. Moreover, the project in which they invest is reviewed for its compliance
with the regulatory requirements as referenced above, and the projects and
Regional Centers are carefully reviewed for risks of fraud.
As aforementioned,
the source of funds for the investment must be legitimate and proven, and there
are numerous other compliance checks involved in the transfer of the funds into
the project’s escrow account and other security checks in place in the Program.
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