Overview of the EB-5 Program and the most direct path to a U.S. Green Card

The United States Green card is one of the most sought after documents in the world, and the EB-5 visa is one of the most direct paths to obtaining both residency and employment eligibility, for not only the applicant, but their spouse and children under 21. For those who would simply like to invest in the program, there are three options:

1. the active investment of $1 Million USD, also know as the million dollar green card;

2. an active investment of $500,000 investment into a designated Targeted Employment Area (TEA);

3. the passive Regional Center investment of $500,000.

The active investments require participation in the enterprise by the principal applicant, the passive investment does not. All will lead to permanent residency and the right to live and work in the United Sates.

Unlike many of the other visa categories which allow applicants to apply for a green card after a period of residency in the U.S., the EB-5 program provides a conditonal green card to the successful applicant and their family immediately upon approval by the USCIS. You can arrive in the United States knowing that you and your family have Permanent Residency status and can apply for full U.S. citizenship after 5 years.

The Million Dollar Green Card v. Regional Center investment, which is the better option?

For investors who wish to invest in a new or existing business, have an active role in the management of the operation, have at least one million US dollars to invest (or $500,000 in a designated TEA), benefit the U.S. economy, and create 10 new full time jobs for U.S. citizens or U.S. permanent residents, then the traditional EB-5 visa is the best option.

For those who would prefer a passive role in the management of their investment, do not wish to be involved in the creation of the 10 U.S. full time jobs, and would rather limit their investment to $500,000 USD, then the Regional Center, or EB-5 Pilot Program is the better immigration option.

To determine which option would be most appropriate for you, please contact Karen Caco at International Immigration Services, PA or Michael Gibson at USAdvisors.org to schedule a consultation.

What is a Regional Center?

The Immigrant Investor Pilot Program (“Pilot Program”) was created by Section 610 of Public Law 102-395 (October 6, 1992). This is different in certain ways from the basic EB-5 investor program.

The Pilot Program began in accordance with a Congressional mandate aimed at stimulating economic activity and creating jobs for U.S. workers, while simultaneously affording eligible aliens the opportunity to become lawful permanent residents. Through this innovative program, foreign investors are encouraged to invest funds in an economic unit known as a “Regional Center.”

A Regional Center is defined as any economic unit, public or private, engaged in the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment. Prior law required investment in a Regional Center to generate an increase in export sales. However, statutory amendments in 2000 and 2002, no longer require an increase in export sales for approval of a Regional Center, although the statutory amendments still encourage this aspect of the Pilot Program.

Presently up to 5000 immigrant visas are set aside each year for the Pilot Program. Although the Pilot Program temporarily sunsetted on September 30, 2003, it was reinstated and extended for five years by Congress via a law enacted in November 2003, with a new sunset date of November 2008. As of June 1, 2004, a total of 17 Regional Centers have been designated by the legacy Immigration and Naturalization Service (INS) and today, the U.S. Citizenship and Immigrations Services (USCIS).

For more information on the USCIS EB-5 program please go to the United States Citizenship and Immigration Services (USCIS) site, and The Association to Invest in the USA (IIUSA)'s. They both have very informative websites and the IIUSA is the trade association representing many of the Regional Centers, and we highly recommend that all potential investors visit the sites and research their publications.

Basic requirements for Regional Center designation

Applicants must show how their proposed program will:

Also, the proposal supporting the application would need to address how it would comply with all the EB-5 requirements at 8 CFR 204.6 which each individual investor through a regional center must satisfy. As such in addition to the economic impact analysis and indirect job creation multipliers, statistical projection tools, promotional plans, basic business plans covered under the Pilot Program portion of the regulations at 8 CFR 204.6(m); the underlying proposal must also provide/contain such items (where applicable) as proposed or sample subscription agreements, Private Placement Memorandums, Offering Memorandums, planed fees and services, sample of “irrevocable” escrow agreements, Memorandums of Understanding and Interagency Agreements (whenever 3rd party entities, representatives, agencies or institutions are part of the applying center’s proposed structure and plan of operation).

HOW THE PILOT PROGRAM AND REGIONAL CENTERS FALL WITHIN THE EB-5 INVESTOR REQUIREMENTS

The requirements for an investor under the Pilot Program are essentially the same as in the basic EB-5 investor program except the Pilot Program allows for a less restrictive requirement for “indirect” rather than “direct” job creation. The capital investment requirement for any EB-5 investor, inside or outside a Regional Center is $1 million. The capital investment requirement for an EB-5 investor in a Targeted Employment Area (TEA) or a Rural Area (RA) is $500,000.

Indirect Job Creation

An important advantage to obtaining Regional Center designation is the “indirect” nature of the job creation, which is less difficult to achieve than the “direct” creation of 10 new jobs. The requirement of creating at least 10 new full-time jobs may be satisfied by showing that, as a result of the investment and the activities of the new enterprise, at least 10 jobs will be created indirectly through an employment creation multiplier effect. To show that 10 or more jobs are actually created indirectly by the business, reasonable methodologies may be used, such as multiplier tables, feasibility studies, analyses of foreign and domestic markets for the goods or services to be exported, and other economically or statistically valid forecasting tools which support the likelihood that the business will result in increased employment.

Targeted Employment Area (TEA)

A TEA is a geographic area or political subdivision located within a metropolitan statistical area or within a city or town with a population in excess of 20,000 with an unemployment level at least 150% of the national unemployment rate. TEAs within a state are identified and designated by the governor (and for a TEA within the District of Columbia, designation is made by the Mayor). Typically a Regional Center seeks to encompass one or more TEAs. One example of a TEA is a Regional Center, which encompasses a large city which contains clearly delineated census tracts that have been designated as a TEA by the State based on the measured unemployment rates for the population residing within those locations.

Rural Area

A RA is a geographical area that is outside a metropolitan statistical area, or part of the outer boundary of any city or town having a population of 20,000 or less as shown by population indicators. In certain areas involving a sparsely populated state, an approved statewide Regional Center likely encompasses both TEAs and RAs.

Required Amount of Investment

Depending on the location of the commercial enterprise to be invested in, the required amount of the investment may be either $1 million or $500,000. If the investment is located within a TEA or RA, the required minimum threshold for investment is $500,000. Otherwise, an alien must invest a minimum of $1 million to qualify.

Required Commercial Enterprise

In order to qualify under the Pilot Program, an investment of the requisite amount ($500K or $1 million) must be made in a new commercial enterprise located within an approved Regional Center.

New Commercial Enterprise

The law and regulations require that the commercial enterprise in which the investment is made must:

Although the 2002 EB-5 amendments eliminated the requirement that the alien “establish” the new commercial enterprise, the law retained the requirement that the enterprise into which the alien has invested be “new.”

Risk

The regulations and precedent decisions require an alien to incur a reasonable risk for purposes of generating a return on his or her capital investment. As such there should be no guarantees, buy back arrangements, unsecured promissory notes, other agreements or arrangements that in effect merely structure or organize the investment for appearance sake only for purposes of obtaining the permanent resident status without the alien’s capital being fully invested and at risk in the investment in the new commercial enterprise to create or spawn the required 10 jobs.

Engagement of the Alien Investor in the Enterprise

The regulations require that the alien investor is or will be engaged in the management of the new commercial enterprise, either through day-to-day managerial control or through participation in policy-making decisions for the commercial enterprise.

Process to apply for Regional Center designation

There is no established application form by which to apply. The process provides that any entity, government or private organization which desires Regional Center designation by the USCIS proceed as follows:

Prepare a written narrative proposing a for-profit investment which addresses each of the requirements for Regional Center designation participating in the pilot program, with supporting evidence as prescribed in the regulations at 8 CFR 204.6(m).

Submission of the written proposal to the USCIS Chief of Service Center Operations; Attn: Program Manager, Foreign Trader, Investor and Regional Center Program.

At present there is no fee required to apply for Regional Center designation. The USCIS will then review and adjudicate the proposal and may request additional clarifying information and evidence to support representations made in the proposal. If the proposal is initially determined to fully meet each of the requirements for Regional Center designation, then such designation is issued through a letter to the applicant signed by the USCIS’ Chief for Service Center Operations. If the proposal is initially determined to not meet all the requirements for such designation, then a request for additional evidence may be made. Based on the proposal and the supporting evidence for the proposal, a final determination to approve or deny the regional center request will be made by USCIS.

Please contact us at International Immigration Services or USAdvisors.org if you are interested in applying for Regional Center Designation.

Positive Impact on the Economy and U.S. Job Creation

The EB-5 Immigrant Investor and Regional Center program in 2006 resulted in an aggregate total of over $250 million in immigrant investor capital inflow to the U.S. and the creation and/or preservation of 5,000 jobs in areas of high unemployment. Projections for 2007 are for an aggregate total of $500 million and 10,000 jobs principally in areas of high unemployment. The program is projected to achieve $1 billion in total aggregate immigrant investment per year by the end of calendar year 2008, and in excess of 20,000 new jobs directly and indirectly created annually in the U.S. in 2008 and beyond.

These are the current USCIS approved Regional Centers

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