Investment Requirements for Green Card investors- US EB5 Investor Immigration Visa
The investor is required to invest a minimum of $1 million; however, if the investment for US Investor Immigration Visa is located in a Targeted Employment Area (TEA), then the EB5 applicant may invest a reduced amount of $500,000. Some Regional Center investments are located in TEA’s and qualify for the lower threshold investment, while others are not located in a TEA and require the full $1,000,000 investment. United States law defines a high unemployment area as 150% of the national average unemployment level. This law applies to Direct Investment EB5′s as well
Each foreign national EB5 Investor must create at least ten full-time American jobs. If the investment is not located in an approved Regional Center the jobs must be directly within the specific entity that receives the EB5 investment. If the investor uses a Regional Center to make the investment, the job creation requirement of ten jobs still exists; however, the investor may utilize both direct and indirect job creation to fulfill the USCIS job creation requirement. Additionally, the Regional Center may use reasonable economic methodologies to prove the indirect job creation. For direct investment EB5 investors the job creation has no indirect or induced jobs.
The investor must demonstrate that the capital is in fact from a legal source. For example, the funds cannot be derived from a criminal enterprise. An investor may receive a gift of funds; however, the USCIS will require information and will track the source of the funds from the person who granted the gift. Loans are also credible source of funds, but the investment in the enterprise cannot be used as collateral or be pledged in any way.
The EB5 applicant’s capital investment must be truly at risk. Guarantees of return of any capital are strictly prohibited. Any guarantee of the return of capital investment will negate the “at risk” requirement of the EB5 law and the investor’s petition will be denied. Further, there can be no redemption agreements or reserve accounts.
A new commercial enterprise business is defined as one that was formed after November 29, 1990; and it must be a for-profit enterprise formed for the ongoing conduct of any lawful business. Under certain circumstances the law allows for expanding an existing business.
The EB5 investor must have some involvement in the management of the new commercial enterprise. This is the reason most Regional Centers investments are formed through limited partnerships; the act of being a participant in a limited partnership satisfies the USCIS requirement of having a role in management of the partnership. Nearly all L.P.’s require the limited partner to vote on certain key issues.
The USCIS wants investors to be sophisticated enough to understand the sometimes complex issues involved with this type of investment. Therefore the investors must meet the requirements as set forth for defining an accredited investor. An "accredited" investor, as that term is defined by Regulation D of the Securities Act, which means any investor meeting at least one of the following conditions:
The USCIS wants investors to be sophisticated enough to understand the complex issues involved with this type of investment. Therefore, the investors must meet the requirements defining an accredited investor. An “accredited” investor, as that term is defined by Regulation D of the Securities Act, means any investor meeting at least one of the following conditions:
Any natural person (investor) whose individual net worth (or joint net worth with that person’s spouse, if applicable) at the time of purchase exceeds US $1,000,000; or
any natural person who had an individual income in excess of US $200,000 or joint income with that person’s spouse in excess of USA $300,000 in each of the two most recent years and who reasonably expects an income in excess of USA $300,000 in the current year; or any other “accredited investor” as that term is defined in Regulation D as adopted by the Securities and Exchange Commission; or
Has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of an investment in the Units, and of making an informed investment decision, and does not require the use of a Purchaser Representative.
There are other requirements for the EB5 investor program that deal with the filing and what must be presented to the USCIS. Every immigrant investor will hire an attorney who will work with the Regional Center to insure these regulations are followed in the submission of the investor’s EB5 application.