EB-5 Visas (Investors/ Employment Creation)

Investors/ Employment Creation

The EB-5 immigrant investor visa category is for immigrants seeking to enter the U.S. to engage in a commercial enterprise that will benefit the U.S. economy and create at least 10 full-time jobs. There are 10,000 visas available in the category each year, 3,000 of which are reserved for people who participate in a Pilot Program option designed for targeted investments in approved regional areas.

There are four basic requirements for the EB-5 visa. They include:

• The individual must establish a business or invest in an existing business that was created or restructured after November 19,1990;
• The individual must have invested $1 million unless the investor is investing in a “targeted employment area,” in which case the investment may be $500,000;
• The business must create full-time employment for at least 10 U.S. workers; and
• The EB-5 investor must be engaged in the management of enterprise either through day-to-day managerial control or through policy formulation. A purely passive role is not permitted.

There are three types of qualifying business enterprises for EB-5 purposes. They include:

• New commercial enterprises;
• Purchase of an existing business with simultaneous restructuring or reorganization such that a new commercial enterprise results; and
• Expansion of an existing businesses created after November 1990 through the investment of the required amount and the creation of ten new jobs.

Any for-profit business entity that conducts lawful business may serve as a qualifying business enterprise. The business can be a sole proprietorship, partnership, holding company, joint venture, corporation, etc. A holding company with its subsidiaries would also qualify if each subsidiary is engaged in the active conduct of business. Passive investments do not qualify.

An investor can show the capitalization of the enterprise by making an investment in the form of cash, supplies, equipment, inventory, tangible property, cash equivalents and indebtedness secured by assets owned by the investor provided that the investor is personally and primarily liable for the debts and assets and the assets of the new commercial enterprise are not used to secure any of the indebtedness.

Multiple investors may establish a new commercial enterprise; however, each investor applying for the classification must meet the requirements for the EB-5 classification separately. For example, each investor must create 10 jobs for U.S. workers.

The basic investment amount required to be an EB-5 investor is $1 million.