EB-5 Visa

EB-5 Immigrant Investor

Visa Description

USCIS administers the Immigrant Investor Program, also known as “EB-5,” created by U.S Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under a pilot immigration program first enacted in 1992 and regularly reauthorized since, certain EB-5 visas also are set aside for investors in Regional Centers designated by USCIS based on proposals for promoting economic growth.

All EB-5 investors must invest in a new commercial enterprise, which is a commercial enterprise:

  • Established after Nov. 29, 1990, or
  • Established on or before Nov. 29, 1990, that is:
    • Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or
    • Expanded through the investment so that a 40-percent increase in the net worth or number of employees occurs

Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to:

  • A sole proprietorship
  • Partnership (whether limited or general)
  • Holding company
  • Joint venture
  • Corporation
  • Business trust or other entity, which may be publicly or privately owned

This definition includes a commercial enterprise consisting of a holding company and its wholly owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business.

Note: This definition does not include noncommercial activity such as owning and operating a personal residence.

Job Creation Requirements

  • Create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years (or under certain circumstances, within a reasonable time after the two-year period) of the immigrant investor’s admission to the United States as a Conditional Permanent Resident.
  • Create or preserve either direct or indirect jobs:
    • Direct jobs are actual identifiable jobs for qualified employees located within the commercial enterprise into which the EB-5 investor has directly invested his or her capital.
    • Indirect jobs are those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor. A foreign investor may only use the indirect job calculation if affiliated with a regional center.

Note: Investors may only be credited with preserving jobs in a troubled business.

A troubled business is an enterprise that has been in existence for at least two years and has incurred a net loss during the 12- or 24-month period prior to the priority date on the immigrant investor’s Form I-526. The loss for this period must be at least 20 percent of the troubled business’ net worth prior to the loss. For purposes of determining whether the troubled business has been in existence for two years, successors in interest to the troubled business will be deemed to have been in existence for the same period of time as the business they succeeded.

A qualified employee is a U.S. citizen, permanent resident or other immigrant authorized to work in the United States. The individual may be a conditional resident, an asylee, a refugee, or a person residing in the United States under suspension of deportation. This definition does not include the immigrant investor; his or her spouse, sons, or daughters; or any foreign national in any nonimmigrant status (such as an H-1B visa holder) or who is not authorized to work in the United States.

Full-time employment means employment of a qualifying employee by the new commercial enterprise in a position that requires a minimum of 35 working hours per week. In the case of the Immigrant Investor Pilot Program, "full-time employment" also means employment of a qualifying employee in a position that has been created indirectly from investments associated with the Pilot Program.

A job-sharing arrangement whereby two or more qualifying employees share a full-time position will count as full-time employment provided the hourly requirement per week is met. This definition does not include combinations of part-time positions or full-time equivalents even if, when combined, the positions meet the hourly requirement per week. The position must be permanent, full-time and constant. The two qualified employees sharing the job must be permanent and share the associated benefits normally related to any permanent, full-time position, including payment of both workman’s compensation and unemployment premiums for the position by the employer.

Capital Investment Requirements

Capital means cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. All capital shall be valued at fair-market value in United States dollars. Assets acquired, directly or indirectly, by unlawful means (such as criminal activities) shall not be considered capital for the purposes of section 203(b)(5) of the Act.

Note: Investment capital cannot be borrowed.

Required minimum investments are:

  • General. The minimum qualifying investment in the United States is $1 million.
  • Targeted Employment Area (High Unemployment or Rural Area). The minimum qualifying investment either within a high-unemployment area or rural area in the United States is $500,000.

A targeted employment area is an area that, at the time of investment, is a rural area or an area experiencing unemployment of at least 150 percent of the national average rate.

A rural area is any area outside a metropolitan statistical area (as designated by the Office of Management and Budget) or outside the boundary of any city or town having a population of 20,000 or more according to the decennial census.

Benefits and Risks of each Investment Option

  New Enterprise Troubled Business Regional Center
Benefits 
of 
Investing

$500,000

Invest of $500,000 as opposed to $1,000,000 is not as cumbersome.

Investor has more control over day to day operations.

Invest of $500,000 as opposed to $1,000,000 is not as cumbersome.

Investors do not need to create 10 jobs, but maintain 10 already existing positions.

Business is already distressed; thus, the investor may bargain for a better deal.

Investor has more control over day to day operations.

If business folds within two year period, investor could lose all invested capital.

Investor needs to show that his/her investment creates either 10 direct or indirect jobs.

Risky because business is located in a TEA.

Usually offered a position as a Limited Liability Partner, so investor has no control over day to day operations. Moreover, the general partners of the regional center company usually benefit from investors’ investments.

Drawbacks of Investing

$500,000

If business folds within two year period, investor could lose all invested capital.

The investor needs to show the creation of 10 jobs or possibly more than 10 jobs if expanding an existing business.

Risky because business is located in a TEA.

Must usually live in the same location as the enterprise.

If business folds within two year period, investor could lose all invested capital.

The investor needs to maintain 10 already existing employees for a period of at least 2 years.

Compounded by its location in a TEA, this business is already in distress.

Must usually live in the same location as the enterprise.

Invest of $500,000 as opposed to $1,000,000 is not as cumbersome.

Removes the 10 employee requirement, allowing the investor to qualify without directly hiring 10 people.

Does not require the investor's day-to-day management, nor does it require investors to live in the place of investment.

Congress gives regional centers top priority, which could mean a quicker path to approval for Form I-526. However, USCIS has yet to officially implement this.

Investors do not need to create 10 direct jobs, but his/her investment should create either 10 direct or indirect jobs.

Benefits 
of 
Investing

$1,000,000

Investor has the option of investing in any type of enterprise anywhere in the U.S.

May not be as risky because investment is not made in an area of high unemployment or distress.

Investor has more control over day to day operations.

Investors do not need to create 10 jobs, but must instead maintain 10 already existing positions.

Business is already distressed; thus, the investor may bargain for a better deal.

Investor has more control over day to day operations.

Removes the 10 employee requirement, allowing the investor to qualify without directly hiring 10 people.

Does not require the investor's day-to-day management, nor does it require investors to live in the place of investment.

Congress gives regional centers top priority, which could mean a quicker path to approval for Form I-526. However, USCIS has yet to officially implement this.

Investors do not need to create 10 direct jobs, but their investment should create either 10 direct or indirect jobs.

Regional Centers are already established.

Drawbacks
of
Investing

$1,000,000

Investors may find Invest of $1,000,000 extremely cumbersome and risky.

If business folds within two year period, investor could lose all invested capital.

The investor needs to show the creation of 10 jobs or possibly more than 10 jobs if expanding an existing business.

Must usually live in the same location as the enterprise.

Investors may find Invest of $1,000,000 extremely cumbersome and risky.

If business folds within two year period, investor could lose all invested capital.

The investor needs to maintain 10 already existing employees for a period of at least 2 years.

The business is already in distress.

Must usually live in the same location as the enterprise.

Investors may find Invest of $1,000,000 extremely cumbersome and risky. If an investor likes to invest in a regional center company, it may be better to invest in one that only needs $500,000 in investment.

If business folds within two year period, investor could lose all invested capital.

Investor needs to show that his/her investment creates either 10 direct or indirect jobs.

Usually offered a position as a Limited Liability Partner, so investor has no control over day to day operations. Moreover, the general partners of the regional center company usually benefit from investors’ investments.

Qualify Fund Source Requirement

I. Minimum Amount Requirement 

Generally speaking, the minimum investment required to qualify for EB-5 status is $1,000,000. However, the limit is reduced to $500,000 in cases of investment in “targeted employment areas.” Such qualifying areas must have an unemployment rate 150% of the national average. A rural area refers to municipal areas with a population less than 20,000. Every state keeps a list of “targeted employment areas” for reference.

Please note that if there is a redemption clause in a commercial enterprise’s agreement that guarantees the return of a petitioner’s investment, such assets will not be deemed as “at risk”; a petitioner must infuse the full amount of at risk capital into an enterprise. 

II. Legitimate Source of Funds 

Assets acquired directly or indirectly by unlawful means such as criminal activities are not acceptable capital. In practice, USCIS is very strict about reviewing the legitimacy of funds. 

III. Acceptable Types of Property as Investment 

Cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the investor are all acceptable investments for EB-5 purposes. A loan to the company or any other debt between the company and investor does not constitute an investment because such a monetary transfer does not bear any investment risk (some exceptions apply, see below). All capital shall be valued at fair market in U.S. dollars. The investor need not commit his/her entire capital immediately, but the investment must substantially complete prior to the end of the 2-year conditional residency period. 

Evidence required for an Investment from your lawful income:

    • Five years of personal income tax returns
    • Personal bank account statements for the past couple of years
    • Salary reports
    • Salary verification letter from previous employers
    • Five years of business income tax returns if income was generated from the operation of your business
    • Business registration documents and ownership if funding is from the operation of your business
    • Articles of incorporation, share certificates and other like documentation if funding is from the operation of your business
    • Business bank account reports for the past couple of years if funds are from the operation of your business

Evidence required for investment funds from a gift:

    • Documentation proving funds from the donor to the investor
    • Statement explaining the surrounding circumstances of the gift and why the gift was made
    • Gift tax return, if any
    • Documentation such as personal/business income tax return and ownership of business proving the donor’s financial background to demonstrate how he/she derived the funds that were gifted

Evidence required for investment funds from an inheritance:

    • Statement of the relationship between the investor and the deceased
    • A death certificate
    • Documentation of the investor’s receipt of inherited funds
    • Certification of payment of inheritance tax, if any
    • If there is a lack of documentation tracing funds from the deceased’s estate to the investor, a statement of thorough explanation of the relationship, the amount inherited, and other circumstances concerning the inheritance is required

Evidence required for investment funds from transactions:

  • Sale of business
    • Deeds
    • Closing statements
    • Bank account statements
    • Documentation tracing funds from the closing of the transaction to the investor’s individual account
    • Copy of the business registration before the sale and immediately after the sale
    • Letter from the accounting firm that represented the investor in the sale, indicating the sale, sale price, and the identity of the buyer
    • Business financial information such as evaluation from a certified accountant proving the value of the business
  • Sale of real estate
    • Purchase agreement
    • Final settlement statement 
    • Receipt of funds from the buyer to the investor
    • Payment of real estate tax obligations
    • Title transfer evidence
    • Past five years personal income tax return proving funds in the purchase of the real estate that sold
  • Sale of stock
    • Company’s incorporation documents or other company registration documents
    • The share purchase agreement
    • Evidence of the transfer of  proceeds of the stock sale from the brokerage company to the investor’s account
    • Payment of tax obligations of the proceeds of stock sale
    • Stock transaction record
  • Investment funds from a loan. (Only a loan secured by your assets as opposed to property of the commercial enterprise that you invested in is eligible.)
    • Terms of the loan agreement
    • Documentation proving that the loan transferred from the lender to you
    • Lender’s business registration record, business income tax returns if the lender is a business or personal income tax return if the lender is an individual.


EB-5 Process Flowchart

 

Supporting EB-5 Evidence for Form I-526

General Evidence 

Evidence applicable to new commercial programs include:

  • Evidence of the existence of the enterprise
  • Evidence of lawful capital:
    • Corporate, partnership and/or personal tax returns filed within the past 5 years;
    • Foreign business registration records or evidence identifying other sources of capital;
    • Other proof of the investor's income during previous years;
    • Certified copies of any judgments or evidence of all pending actions involving monetary judgments within the past 15 years;
    • Sales contracts if the source of funds is from the sale of a house or business;
    • Bank statements, evidence of property transferred from abroad, evidence of purchased assets, stock certificates given for investments, or loan or mortgage agreements.
  • Evidence of the required investment
  • Evidence of the investor's day-to-day operation of the enterprise through either management or policy (does not apply to investors in a Regional Center Program)
  • Title and description of the investor's job duties
  • If the enterprise is a partnership, evidence proving the investor-partner's management or policy-making activities.
  • Evidence showing the creation of at least 10 jobs for U.S. workers or a reasonable business plan to show that it will create 10 jobs for U.S. workers
    • If investors have hired employees, I-9s forms and tax records; or
    • If investors do not currently hire employees, a business plan demonstrating that 10 U.S. workers will be hired within the next 2 years;
  • If investors are in a category requiring a $500,000 investment:
    • Evidence demonstrating that 10 jobs have been or will be created in the targeted employment area by a reasonable business plan; and
    • Statistical proof that the targeted employment area has high unemployment and a state agency's letter demonstrating that the area is classified as a "high unemployment" area.

Supporting Evidence to Submit with Form I-829


In order to remove Conditional Resident status, the investor must submit Form I-829 within 90 days of the 2 year anniversary of receiving the conditional residency status. The petitioner of Form I-829 must show:


New Commercial Enterprise

  • Evidence that you created a new commercial enterprise by submitting copies of the business’s organizational documents, federal tax returns, etc. 
  • Evidence that you have invested the total amount of required funds 
  • Evidence that you have sustained your investment in the new commercial enterprise throughout your two-year period of conditional permanent residency by submitting: business invoices and receipts, bank statements, contracts, copies of federal or state income tax returns, quarterly tax statements, audited financial statements, contacts, business licenses, or any similar evidence.
  • Evidence documenting the number of full-time employees at the beginning of your investment and at present by submitting employee tax form I-9, other tax documents, payroll records, etc.

Is the EB-5 Visa Applicable to You?

Is the EB-5 visa right for you? The following scenarios serve to clarify eligibility and general requirements for the EB-5 Investor Visa:

Scenario 1:

Dr. Van and his wife are in their fifties and renowned professors at a university in Ho Chi Minh City, Vietnam. They have a college-aged son already studying in the United States and would like to join him. Over the course of their career, they have accumulated a total of USD $700,000 in assets through real estate investments in the condo market in Ho Chi Minh City, Vietnam. They are considering investing in real estate investment in the United State. Is this a viable option for them?

Answer: It would not be advisable for the Van family to invest most of their assets into the EB-5 program. They will have little assets leftover in the event that their investment goes away. Instead of the EB-5, they should look into other employment based categories like an EB-1(a).

Scenario 2:

Mr. Ninh is independently wealthy, making his fortune in import and exporting. To date, his assets total $10 million USD. His business is continually growing and he anticipates maintaining his wealth. Recently, Mr. Ninh has become interested in the U.S. shipping and logistics market and would like to start a company. In return, the company will make him a formidable shareholder. In addition, Mr. Ninh is married and has two children both under the age of 21. Is this a viable option for Mr. Ninh?

Answer: Absolutely. With plenty of liquid assets and a clear idea of what industry he wants to invest in, the EB-5 visa is a good option for Mr. Ninh to pursue.

Scenario 3:

Tien Nguyen received a $1,000,000 dollar gift from his father, who is a very wealthy businessman in Hanoi, Vietnam. Tien has no managerial experience nor does he have an advanced degree or special skill set. Tien is young, single and is looking for a fast way to come to the United States. Tien already has a sister in the U.S. who is a U.S. citizen. Is an EB-5 a viable option for Tien?

Answer: Yes, this would be a viable option for Tien. As he has no advanced degree or special skill set, his only other option is to apply for a green card through a family-based petition. However, because a family-based petition from his sister may take a long time, Tien would best benefit from an EB-5 petition.

Scenario 4:

Tuan is an Executive Vice President working for a big Viet company. If he sells his house, he will have a net worth of a little over $1 million USD. Harry has a lot of managerial experience and has been considering the EB-5 petition for some time. However, his company, which has many offices around the world, including one in the United States, has recently informed him there is a possibility of sending him to work at their U.S. branch office on an EB-1C. What should Tuan do?

Answer: Since Tuan’s net worth is just over $1,000,000 dollars and would require him to sell his home, the best option for Tuan would be to come to the United States under an L-1 visa and then apply for an immigration petition under an EB-1C. That way, he will not have to invest his own money or sell his home. In addition, he can also adjust status immediately to unconditional permanent residency once the EB-1C petition is approved.

VS Project for EB-5 Program

VS EB-5, LP (the “Partnership”) - a new commercial enterprise - was organized on March 28th, 2013 as a California Limited Partnership. The Partnership’s primary objective is to manage the funds of its investing partners for the specific purpose of developing and expanding the business of the Partnership discussed below. The General Partner is VS Realty, Inc. Each foreign Investor will be Limited Partners in the Partnership, allowing the foreign investors to make a qualifying investment in a “new commercial enterprise” and fulfill the requirements necessary to obtain Lawful Permanent Resident status in the U.S.

Located in San Jose, California, the Partnership’s primary business objective is to generate profit by operating a new real estate development business within Santa Clara County. The Partnership intends to base its real estate development activities at 2114 Senter Road #11, San Jose, CA. 95112, which is not situated within a Targeted Employment Area (“TEA”) as classified by the California Employment Development Department. Thus, the minimum required investment for each Alien Entrepreneur Investor is the sum of $1,000,000
The Partnership intends to conduct its business within the following industries:

Meeting the requirements set by the United States Citizenship and Immigration Service (“USCIS”), operation of this new commercial enterprise will create approximately forty (40) new, full-time jobs, which equate to 13.3 direct jobs per investor. The General Partner believes that the Comprehensive Business Plan sets forth a credible plan for forming and operating a profitable enterprise.

This debt-free model reduces the risk of losing capital because it eliminates the risk of bank foreclosure due to insufficient income to pay a mortgage. Being debt-free enables the Partnership to invest in quality developments and renovations, spend more time in attracting purchasers on profitable terms, and ultimately to increase cash flow. Finally, the debt-free model provides added security for those who wish to build a stream of reliable income for retirement.

The Partnership will be comprised of its General Partner, VS Realty, Inc. (holding a 1% Partnership Interest), and each of the Alien Entrepreneur Investors as its Limited Partners (collectively holding a 99% Partnership Interest).

The Partnership is also the job creating enterprise. The petitioning investor is a Limited Partner and the Partnership Agreement provides the petitioner with the rights, powers and duties normally granted to limited partners under the Uniform Limited Partnership Act; therefore, the investor will be considered sufficiently engaged in the management of the enterprise. As a practical and legal matter, this requirement is satisfied without the necessity of the Alien Entrepreneur Investor committing to any specific amount of time or engaging in any day-to-day management of the Partnership.

The profits and losses of the Partnership flow through the Partnership to each Partner. Each Partner will receive a Schedule K-1 from the Partnership on an annual basis. Each Partner is responsible for paying taxes, if any, on distributions received.

All business losses, profits, and expenses flow through the Partnership to the Partners. There is no double taxation requiring the payment of corporate tax and individual tax because the Partnership is not a taxable entity.

The Partnership’s principal method of obtaining such funds will be by offering Interests in the Partnership to three Alien Entrepreneur Investors pursuant to the Direct EB-5 Investment under the Immigration Act. Since the new commercial enterprise is not located within a Targeted Employment Area (“TEA”) designated by the California Employment Development Department, each Alien Entrepreneur Investor is required to invest a minimum of $1,000,000 from lawful sources based on the fact that business activity is not located within a TEA.



VS Project Model & Marketing Strategy





I.  Local Economy & Real Estate Trends

  1. Santa Clara County and many other counties in the Bay Area have been in a real estate upswing, and sales prices have dramatically increased. 
  2. Due to low interest rates and because many people who were foreclosed upon a few years ago are able to purchase a home again, there are many buyers searching for homes. 
  3. The supply of homes available on the market is not sufficient to satisfy the number of buyers looking for a home. The market is getting hotter than ever, with sales prices of homes in some areas exceeding the prices during the peak year of 2006. 
  4. “Due to high demand and the shortage of homes [in Santa Clara County], the median home price continues to rise. Santa Clara County’s February median sales price of $712,250 was up 32 percent from the median of $540,000 in February 2012.”1 
  5. “[There has been …] a 20-30 percent rise in March sale prices from last year in the East Bay, Peninsula, and South Bay. It’s the 13th straight month of higher prices, according to the report.”2

II.  Product/Services Differentiation 

  1. How can VS Realty & Loans, Inc. differentiate itself from the myriad other real estate companies out there? 
    1. Most importantly, we have the sources and resources from where we can obtain houses. 
    2. We have a steady customer base, loan department, and ready supply of investors ready to move on this project. 
    3. We also have the years of experience, expertise, and dedication to service required to meet the goals of our investors, sellers, and buyers.

III.  Listing Properties 

  1. Listing properties on the MLS will garner a lot of attention on our listings, especially since the market is becoming hotter and hotter. 
  2. Marketing Materials for Listings 
    1. Flyers 
      1. Graphic designers create custom flyers for each of our listings

IV.  Media Productions 

  1. We have formed a media company to help us delve further into different marketing areas and techniques as described below to extend our reach into the community and to create more business. 
  2. Newspaper 
    1. We advertise our listings and our real estate firm in local newspapers, focusing on the Vietnamese papers, because so many buyers/investors are Vietnamese in the Bay Area. 
  3. Radio 
    1. We have started a radio campaign on Vietnamese radio stations to advertise listings and our real estate services, financing services, and other investment opportunities. 
    2. There are many popular call-in radio shows and other radio programs that are very popular with the community, in which we will also participate. 
  4. Television 
    1. We are preparing to partake in televised interviews with viewers calling in regarding real estate matters on local television stations/shows. 
  5. Internet 
    1. We have a committed team working on the launch of multiple VS websites, each of which have a different target market and feature different products and services. 
    2. We will also launch viral social media marketing programs as well. 

V.  Community Outreach 

  1. Our real estate company is already very distinguished and well-known in the community. 
  2. Utilizing this recognition, we participate in community outreach and charity events to improve the community beyond just a real estate standpoint. 
  3. Because of our status in the community, we also have a very steady business based solely on referrals.

Services That We Provide

We proudly offer the following services for EB-5 petitions: 

VS EB-5 LP, our experienced consultants and advisories are dedicated to providing professional and fast service for our clients. We want your case approved as much as you do, and will do everything within the law to advance your interests.

Before taking your case, we would like to invite you to the United State for a business tour (B-1 Visa) to our business location, physical project site. Importantly, initial consultation with our US Immigration attorney to evaluate your individual circumstances and give our assessment regarding your potential case. We would like to make sure that we are able to provide valuable service to you before taking your case. Through our evaluation, we are able to decide on the best direction for your potential case and tailor our legal resources to your specific situation. 

You may send us information about yourself and your circumstances either by email to This email address is being protected from spambots. You need JavaScript enabled to view it.  or by fax at 408-289-5375. After reviewing your information, we will provide you an honest assessment to determine whether or not an EB-5 is appropriate for you. Moreover, we will advise you on what strategies to adopt and whether it may be better for you to petition under another category such as EB-1C.

If you decide to be VS investor for your EB-5 case, we will effectively communicate and work closely with you throughout the entire application process. Our experienced attorneys will prepare your case with care to firmly establish your eligibility and that of your dependents. Moreover we will review, translate, and organize all necessary application materials. Our attorneys will then complete all your EB-5 petition forms, draft the petition letter for you, submit a complete set of petition materials to the proper USCIS service center, and contact USCIS for status inquiries regarding your pending case. In the event that USCIS requests additional evidence for your pending petition, our attorneys will submit the appropriate documentation required for your case. As soon as USCIS makes a final decision on your EB-5 petition, we will inform you accordingly. 

In addition to visa requirements, there are a number of important legal considerations that should be addressed.
VS is able to advise clients on state and federal considerations with respect to taxation, corporate control, visas, potential litigation, etc.