EB-5 Individual Investments

One can obtain an EB-5 investor visa by investing in a business the individual creates or locates.  All individual investments must be at least $1 million unless the business is in a high unemployment (150% above national average) or rural area in which case the amount is $500,000.

Investors creating or locating a firm for individual investment must be “engaged” in the business. An investor may satisfy this management requirement as corporate officer, board member, or limited partner.

Investors can enjoy retirement, obtain further education, or own another business after making an individual investment. They may also choose to manage the day-to-day operations of their firm in the interest of generating a high return on their investment.

Creating a business and jobs

When an investor creates a business, he/she must provide the USCIS with substantial documentation proving the business will satisfy the EB-5 rules.  The investor’s capital investment must be “at risk” in that it is available for or already has been spent by the job creating entity. The investor must also show that his investment will directly create or in some cases save ten jobs at the firm he/she creates.  Then form I-526, the first step toward obtaining an EB-5 investor visa, may be filed.

Unless an investor can get a temporary work visa (such as an E-2), he or she must hire a manager to run the new enterprise until USCIS issues the investor’s EB-5 visa and green card.  In some cases, the investor can present a detailed business plan and set up the enterprise so that it is ready to begin operations as soon as the investor immigrates.

Investing in a "new" business

An investor may make his investment in a business that he did not create but which is “new” in that it is a firm established after November 29, 1990. This firm must be a "commercial" enterprise created for ongoing conduct of lawful, for-profit business.

Many types for firms qualify as "commercial" enterprises. This includes sole proprietorships, partnerships (whether limited or general), joint ventures, corporations, business trusts, or other entities publicly or privately owned. This definition also includes holding companies and their wholly owned subsidiaries. However, an investor engaged in noncommercial activity like owning and operating a personal residence or buying stock on the stock exchange will not qualify for an EB-5 investor visa.

Investing in an "existing" business

In two situations, an investor may make an investment in an "existing" business formed prior to November 29, 1990 and obtain an EB-5 visa and green card. 

First, the investor may substantially reorganize or restructure the “existing” business, thereby transforming the nature of the business. These changes must constitute the establishment of a new commercial enterprise.

Second, an investor may expand an “existing” business by a 40% increase in net worth or a 40% increase in the number of employees.

In both situations, USCIS requires evidence of the change in business.  Such evidence includes income tax returns, financial statements, employment tax returns, and other documents.

Martin Lawler is pleased to talk with investors about the processes and advantages of both Regional Centers and individually created businesses. He helps people file both types of EB-5 cases.

Investing in a “troubled” Business

An investor may invest in a business that is at least two years old and is deemed “troubled” in that it has had a 20% net loss of the business's previous net worth for the past one or two years.  In such a case, no new jobs need be created.  Instead, all of the jobs that existed before the investment was made must be preserved for two years.
If, for example, only 8 jobs existed before the investment was made, two more must be created to amount to 10 jobs.  If there were more than ten existing jobs, then the investor must preserve all of those jobs to get a green card – not just ten.

Source of Funds

Each investor must prove the invested funds come from a legal source.  Martin Lawler will assist the investor with this.  We have helped document the source of funds for over 60 successful EB-5 applications.

Conditional Residence Explained

An EB-5 immigrant is granted a “Conditional Green Card” which is a temporary Green Card valid for two years. One year and nine months after it is issued, a three-month window opens up during which an individual must file another application (Form I-829) with USCIS to verify that all of the funds have remained invested and 10 jobs were directly or indirectly created or in some cases saved. When the conditions on the permanent resident status are lifted, the investor has full permanent resident status and receives a permanent Green Card.  Not long after one is usually able to apply for naturalization to become a U.S. citizen and receive a U.S. passport.

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