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EB5 Visa Program Policy by USCIS for how it works!!!

eb5-visa-program-policy-by-uscis

EB5 Visa Program Policy by USCIS for how it works!!!

EB5 Visa Program Policy by USCIS: How does EB5 Visa Program Works?

EB5 Visa Program Policy In-site for Immigrant Investors

Few Insight Point form Policy Memorandum PM-602-0083. 

PM-602-0083 

Policy Memorandum 

 

SUBJECT: EB5 Visa Program Adjudications Policy

 

The purpose of the EB5 Visa Program is to promote the Immigration of people who can help Create Jobs for U.S. Workers through their Investment of Capital into the U.S. Economy. 

  • Congress established the EB5 Visa Program in 1990 to bring New Investment Capital into the Country and to Create New Jobs for U.S. Workers. The EB5 Visa Program is based on Nation’s Interest in promoting the Immigration of people who invest their Capital in New, Restructured, or Expanded Businesses and Projects in the United States and Help Create or Preserve needed Jobs for U.S. Workers by doing so. 
  • In the EB5 Visa Program, Immigrants who invest their Capital in Job-Creating Businesses and Projects in the United States receive Conditional Permanent Resident status in the United States for a Two-Year Period
  • After Two years, if the Immigrants have satisfied the conditions of the EB5 Visa Program and other Criteria of Eligibility, the conditions are removed and the Immigrants become Unconditional Lawful Permanent Residents of the United States. 
  • Congress created the Two-Year Conditional Status Period to help ensure compliance with the Statutory and Regulatory PM-602-0083: EB5 Visa Program Adjudications Policy requirements and to ensure that the infusion of Investment Capital is sustained and the U.S. Jobs are created
  • The 1990 Legislation that created the EB5 Visa Program envisioned Lawful Permanent Resident Status for Immigrant Investors who invest in and engage in the management of Job-creating Commercial Enterprises. 
  • In 1993, the Legislature enacted the “Immigrant Investor Pilot Program” that was designed to encourage Immigrant Investment in a range of Business and Economic Development Opportunities within designated Regional Centers. 
  • In 2012 Congress reaffirmed its commitment to the Regional Center Model of Investment and Job Creation by removing the word “Pilot” from the now Twenty-Year Old Program, and by providing a Three-Year Reauthorization of the Regional Center Model through September 2015
  • Goal at U.S. Citizenship and Immigration Services (USCIS) is to make sure that the Potential of the EB5 Visa Program, including the Immigrant Investor Program, is fully realized, and that the Integrity of the EB5 Visa Program is protected

Ensuring Program Integrity: 

It is critical to USCIS mission to ensure that they administer the EB5 Visa Program with Utmost Vigilance to Program Integrity. USCIS operational teams work in collaboration with the Fraud Detection and National Security Directorate and cases presenting issues relating to Fraud, National Security, or Public Safety should be referred as appropriate to Law Enforcement and Regulatory Authorities. 

The Three Elements of the EB5 Program: 

The EB5 Visa Program is Based on Three Main Elements: 


The Investment of Capital: 

The EB5 Visa Program is based in part on the fact that the United States Economy will Benefit from an Immigrant’s Contribution of Capital. It is also based on the view that the Benefit to the U.S. Economy is Greatest when Capital is placed At Risk and invested into a New Commercial Enterprise that, as a result of the Investment, Creates at least Ten Jobs for U.S. Workers. 

“Capital” Defined: 

The definition of “Capital” has been clarified in Regulations and in Precedent Decisions that our Administrative Appeals Office (AAO) has issued: 

First, the definition of “Capital” is sufficiently Broad that it includes not only such things of value as Cash, Equipment, and other Tangible Property, but it can also include the Immigrant Investor’s Promise to Pay (a Promissory Note), as long as the promise is secured by assets the Immigrant Investor Owns, the Immigrant Investor is liable for the Debt, and the assets of the Immigrant Investor do not for this purpose include assets of the Company in which the Immigrant is investing. 

Second, all of the Capital must be valued at Fair Market Value in United States Dollars. 8 C.F.R. § 204.6(e) (definition of “Capital”). The Fair Market Value of a Promissory Note depends on its Present Value, not the Value at any Different Time. 

“Invest” Defined (8 C.F.R. § 204.6(j)(3)(i)-(iv). )  

The Immigrant Investor in the EB5 Visa Program is required to Invest his or her Capital. The Petitioner must Document the Path of the Funds in order to establish that the Investment was his or her Own Funds. 8 C.F.R. § 204.6(e). 

The Regulation also provides that, in order to qualify as an Investment in the EB5 Visa Program, the Immigrant Investor must actually place his or her Capital “At Risk” for the purpose of Generating a Return, and that the mere intent to invest is not sufficient.   

The Regulation provides as follows:  

  • To show that the Petitioner has Invested or is Actively in the Process of Investing the required Amount of Capital, the Petition must be accompanied by evidence that the Petitioner has placed the Required Amount of Capital At Risk for the purpose of Generating a Return on the Capital placed At Risk. Evidence of Mere Intent to Invest, or of Prospective Investment Arrangements entailing no Present Commitment, will not suffice to show that the Petition is actively in the Process of Investing. The Alien must show Actual Commitment of the required Amount of Capital. 8 C.F.R. § 204.6(j)(2). 
  • The EB5 Visa Program is seeking to Attract Individuals from other Countries who are willing to put their Capital At Risk in the United States, with the Hope of a Return On their Investment, to Help Create U.S. Jobs. The Law does not specify what the Degree of Risk Must Be; the Entire Amount of Capital need only be At Risk to Some Degree
  • An Investor’s Money may be held in ESCROW until the Investor has obtained Conditional Lawful Permanent Resident Status, if the Immediate and Irrevocable release of the Escrowed Funds is contingent only upon Approval of the Investor’s Form I-526 and Subsequent Visa Issuance and Admission to the United States as a Conditional Permanent Resident or, in the case of Adjustment of Status, approval of the Investor’s Form I-485
  • An Investor’s Funds may be held in Escrow within the United States to Avoid Any Evidentiary Issues that may arise with respect to issues such as Significant Currency Fluctuations and Foreign Capital Export Restrictions. Use of Foreign Escrow Accounts however is not prohibited as long as the Petition establishes that it is more likely than not that the Minimum Qualifying Capital Investment will be transferred to the New Commercial Enterprise in the United States upon the Investor obtaining Conditional Lawful Permanent Resident Status. 
  • At the Form I-829 Stage, USCIS will require Evidence Verifying that the Escrowed Funds were released and that the Investment was sustained in the New Commercial Enterprise.  

The Amount of Capital That Must be Invested:  

The Statute Governing the EB5 Visa Program provides that the Immigrant Investor must invest at least $1,000,000 in Capital in a New Commercial Enterprise that creates not fewer than Ten Jobs. As discussed above, this means that the present Fair Market Value, in United States Dollars, of the Immigrant Investor’s Lawfully-Derived Capital must be at least $1,000,000. 8 U.S.C. § 1153(b)(5)(C)(i). 

An exception exists if the Immigrant Investor invests his or her Capital in a New Commercial Enterprise that is principally doing Business in, and Creates Jobs in, a “Targeted Employment Area.” In such a case, the Immigrant Investor must invest a minimum of $500,000 in capital. 8 U.S.C. § 1153(b)(5)(C)(ii); 8 C.F.R. § 204.6(f)(2).  

 “Targeted Employment Area” – TEA Defined:  

The Statute and Regulations governing the EB5 Visa Program defines a “Targeted Employment Area” as, at the time of Investment, a Rural Area or an Area that has experienced unemployment of at least 150 percent of the National Average Rate. 

8 U.S.C. § 1153(b)(5)(B)(ii), (iii); 8 C.F.R. § 204.6(e)In other words, a Rural Area must be both outside of a Metropolitan Statistical Area and outside of a City or Town having a population of 20,000 or more. 

The Immigrant Investor may seek to have a Geographic or Political Subdivision designated as a Targeted Employment Area. To do so, the Immigrant Investor must demonstrate that the Targeted Employment Area meets the Statutory and Regulatory criteria through the submission of: 

  • Evidence that the area is outside of a Metropolitan Statistical Area and outside of a City or Town having a Population of 20,000 or more; 
  • Unemployment Data for the relevant Metropolitan Statistical Area or County; or 
  • A letter from the State Government Designating a Geographic or Political Subdivision located outside a Rural Area but within its own boundaries as a High Unemployment Area. 8 C.F.R. § 204.6(j)(6).   

A State’s Designation of a Targeted Employment Area (TEA):  

  • The Regulation provides that a State Government may designate a Geographic or Political Subdivision within its boundaries as a Targeted Employment Area (TEA) based on High Unemployment. Before the State may make such a designation, an official of the state must notify USCIS of the Agency, Board, or other Appropriate Governmental Body of the State that will be delegated the authority to certify that the Geographic or Political Subdivision is a High Unemployment Area. 
  • The State may then send a letter from the Authorized Body of the State Certifying that the Geographic or Political Subdivision of the Metropolitan Statistical Area or of the City or Town with a population of 20,000 or more in which the Enterprise is principally doing business has been designated a High Unemployment Area. 8 C.F.R. § 204.6(i)
  • Consistent with the regulations, USCIS defers to State determinations of the appropriate boundaries of a Geographic or Political Subdivision that constitutes the Targeted Employment Area. However, for all TEA designations, USCIS must still ensure compliance with the statutory requirement that the proposed area designated by the State in fact has an Unemployment Rate of at least 150 percent of the National Average Rate. For this purpose, USCIS will review State Determinations of the Unemployment Rate and, in doing so, USCIS can assess the method or methods by which the State Authority obtained the Unemployment Statistics. 
  • Acceptable data sources for purposes of calculating Unemployment include U.S. Census Bureau Data (including data from the American Community Survey) and data from the Bureau of Labor Statistics (including data from the Local Area Unemployment Statistics)

There is no provision that allows a State to designate a Rural Area.  

 


New Commercial Enterprise:  

As discussed at the beginning of this PM, the EB5 Visa Program Eligibility Requirements are based on the fact that the U.S. Economy will benefit from an Immigrant Investor’s Investment of Capital into a New Commercial Enterprise that, as a result of the Investment, Creates at least Ten Jobs for U.S. Workers.  

 

“Commercial Enterprise” Defined:  

The regulation defines a “Commercial Enterprise” as follows: 

Any For-Profit Activity formed for the ongoing conduct of Lawful Business. 8 C.F.R. § 204.6(e)

The Regulation provides a list of examples of Commercial Enterprises. It specifically states that the list is only of examples, and is not a complete list of the many forms a Commercial Enterprise can have. The examples listed are: 

  • [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. 8 C.F.R. § 204.6(e)
  • [B] Finally, the regulation provides that the Commercial Enterprise must be one that is designed to Make a Profit, unlike, for example, some Charitable Organizations, and it does not include “a Noncommercial Activity such as Owning and Operating a Personal Residence.” 8 C.F.R. § 204.6(e).   

“New” Defined:  

In its effort to spur Job Creation through a wide variety of Businesses and Projects, the EB5 Visa Program has presented a broad definition of what constitutes a “New” Commercial Enterprise into which the Immigrant Investor can invest the required amount of Capital and help Create Jobs. 

  • The EB5 Visa Program defines “New” as “Established after November 29, 1990.” 8 C.F.R. § 204.6(e). The Immigrant Investor can invest the required amount of Capital in a Commercial Enterprise that was established after November 29, 1990 to qualify for the EB5 Visa Program, provided the other eligibility criteria are met
  • In addition, in the EB5 Visa Program a “New” Commercial Enterprise also means a Commercial Enterprise that was established before November 29, 1990 if the Enterprise will be Restructured or Expanded through the Immigrant Investor’s Investment of Capital.  

The Purchase of an Existing Business, that is Restructured or Reorganized:  

  • The Immigrant Investor can Invest in an Existing Business, regardless of when that business was first created, provided that the Existing Business is simultaneously or subsequently Restructured or Reorganized such that a New Commercial Enterprise results. 8 C.F.R. § 204.6(h)(2). 
  • The facts of Matter of Soffici—where an Investor purchased a Howard Johnson Hotel and continued to run it as a Howard Johnson Hotel—were not sufficient to establish a qualifying Restructuring or Reorganization. 22 I&N Dec. 158, 166 (Assoc. Comm’r 1998) (“A few cosmetic changes to the decor and a New Marketing Strategy for success do not constitute the kind of Restructuring contemplated by the Regulations, nor does a simple change in Ownership.”). 
  • On the other hand, examples that could qualify as Restructurings or Reorganizations include a plan that converts a Restaurant into a Nightclub, or a plan that adds substantial Crop Production to an existing Livestock Farm.  

The Expansion of An Existing Business:  

The Immigrant Investor can invest in an Existing Business, regardless of when that business was first created, provided that a Substantial Change in the Net Worth or Number of Employees results from the Investment of Capital. 8 C.F.R. § 204.6(h)(3).  

 

“Substantial Change” is defined as follows:  

[A] 40 percent increase either in the Net Worth, or in the Number of Employees, so that the new Net Worth or Number of Employees amounts to at least 140 percent of the Pre-Expansion Net Worth or Number of Employees. 8 C.F.R. § 204.6(h)(3). 

Investment in a New Commercial Enterprise in this manner does not exempt the Immigrant Investor from meeting the requirements relating to the Amount of Capital that must be invested and the number of jobs that must be created. 8 C.F.R. § 204.6(h)(3).  

Pooled Investments in Non-Regional Center Cases:  

The EB5 Visa Program provides that a New Commercial Enterprise can be used as the basis for the petition of more than one Immigrant Investor. Each Immigrant Investor must invest the required amount of Capital and each Immigrant Investor’s investment must result in the required number of Jobs. Furthermore, the New Commercial Enterprise can have Owners who are not seeking to enter the EB5 Program, provided that the source(s) of all Capital invested is (or are) identified and all invested capital has been derived by Lawful Means. 8 C.F.R. § 204.6(g).  

Evidence of the Establishment of a New Commercial Enterprise:  

To show that the New Commercial Enterprise has been established, the Immigrant Investor must present the following evidence, in addition to any other evidence we deem appropriate: 

  • As applicable, Articles of Incorporation, Certificate of Merger or Consolidation, Partnership Agreement, Certificate of Limited Partnership, Joint Venture Agreement, Business Trust Agreement, or other similar Organizational Document for the New Commercial Enterprise; or 
  • A Certificate evidencing Authority to do Business in a State or Municipality or, if the form of the Business does not require any such Certificate or the State or Municipality does not issue such a Certificate, a Statement to that effect; or 
  • Evidence that, as of a date certain after November 29, 1990, the required amount of Capital for the area in which an Enterprise is located has been transferred to an Existing Business, and that the Investment has resulted in a Substantial Increase in the Net Worth or Number of Employees of the Business to which the Capital was transferred. This evidence must be in the form of Stock Purchase Agreements, Investment Agreements, Certified Financial Reports, Payroll Records, or any similar Instruments, Agreements, or Documents evidencing the Investment in the Commercial Enterprise and the resulting Substantial Change in the Net Worth or Number of Employees. 8 C.F.R. § 204.6(j), (j)(1)(i)-(iii).  

Evidence of the Investment in a New Commercial Enterprise:  

In order for the Immigrant Investor to show that he or she has committed the required Amount of Capital to the New Commercial Enterprise, the evidence presented may include, but is not limited to, the following: 

  •  Bank Statement(s) showing Amount(s) deposited in United States Business Account(s) for the Enterprise; 
  •  Evidence of Assets which have been purchased for use in the United States Enterprise, including Invoices, Sales Receipts, and Purchase Contracts containing Sufficient Information to identify such Assets, their Purchase Costs, Date of Purchase, and Purchasing Entity; 
  • Evidence of Property transferred from abroad for use in the United States Enterprise, including United States Customs Service Commercial Entry Documents, Bills of Lading, and Transit Insurance Policies containing Ownership Information and Sufficient Information to identify the Property and to indicate the Fair Market Value of such Property. 
  • Evidence of Monies transferred or committed to be transferred to the New Commercial Enterprise in exchange for Shares of Stock (Voting or Non-voting, Common or Preferred). Such Stock may not include terms requiring the New Commercial Enterprise to redeem it at the Holder’s request; or 
  • Evidence of Any Loan or Mortgage Agreement, Promissory Note, Security Agreement, or other Evidence of Borrowing which is secured by Assets of the Petitioner, other than those of the New Commercial Enterprise, and for which the Petitioner is Personally and Primarily Liable. 8 C.F.R. § 204.6(j)(2)(i)-(v).  

The Requirement that the Immigrant Investor be engaged in the Management of the New Commercial Enterprise:  

The EB5 Visa Program requires the Immigrant Investor to be engaged in the Management of the New Commercial Enterprise, either through the Exercise of Day-To-Day Managerial Responsibility or through Policy Formulation. It is not enough that the Immigrant Investor maintain a purely passive role in regard to his or her investment. 8 C.F.R. § 204.6(j)(5). To show that the Immigrant Investor is or will be engaged in the exercise of Day-To-Day Managerial Control or in the exercise of Policy Formulation, the Immigrant Investor must submit: 

  • A Statement of the Position Title that the Immigrant Investor has or will have in the New Enterprise and a complete description of the Position’s Duties; or 
  • Evidence that the Immigrant Investor is a Corporate Officer or a Member of the Corporate Board of Directors; or 
  • If the New Enterprise is a Partnership, either Limited or General, evidence that the Immigrant Investor is engaged in either Direct Management or Policy Making Activities. If the Petitioner is a Limited Partner and the Limited Partnership Agreement provides the Immigrant Investor with certain Rights, Powers, and Duties normally granted to Limited Partners under the Uniform Limited Partnership Act, the Immigrant Investor will be considered sufficiently engaged in the Management of the New Commercial Enterprise.8 C.F.R. § 204.6(j)(5)(i)-(iii).  

The Location of the New Commercial Enterprise in a Regional Center:  

As previously mentioned, there is a Regional Center Model within the EB5 Visa Program that allows for not only “Direct Job” creation, but “Indirect Job Creation” as demonstrated by reasonable Methodologies. 

Originally introduced as a “Pilot Program” and now titled the “Immigrant Investor Program,” the Program provides Investors with Expanded Opportunities to demonstrate Job Creation in accordance with a series of Job Creation rules discussed below.  


“Regional Center” is defined as follows:  

Regional Center means any Economic Unit, Public or Private, which is involved with the promotion of Economic Growth, including Increased Export Sales, Improved Regional Productivity, Job Creation, and Increased Domestic Capital Investment. 8 C.F.R. § 204.6(e). 

A Regional Center that wants to participate in the Immigrant Investor Program must submit a Proposal using Form I-924, that: 

  • Clearly describes how the Regional Center focuses on a Geographical Region of the United States, and how it will Promote Economic Growth through Increased Export Sales, Improved Regional Productivity, Job Creation, and Increased Domestic Capital Investment
  • Provides in verifiable detail how Jobs will be created Directly or Indirectly
  • Provides a detailed statement regarding the Amount and Source of Capital which has been committed to the Regional Center, as well as a description of the Promotional Efforts Taken and planned by the Sponsors of the Regional Center; 
  • Contains a detailed prediction regarding the manner in which the Regional Center will have a positive impact on the Regional or National Economy in general as reflected by such factors as increased Household Earnings, Greater Demand for Business Services, Utilities, Maintenance and Repair, and Construction both within and without the Regional Center; and 
  • Is supported by Economically or Statistically sound valid Forecasting Tools, including, but not limited to, Feasibility Studies, Analyses of Foreign and Domestic Markets for the Goods or Services to be Exported, and/or Multiplier Tables. 8 C.F.R. § 204.6(m)(3)(i)-(v).  

A Regional Center can contain One or More New Commercial Enterprises.  

Form I-924 Applications that are based on Actual Projects may require more details than a Hypothetical Project in order to conclude that the Proposal contains verifiable details and is supported by Economically or Statistically sound Forecasting Tools. Determinations based on Actual Projects, however, will be accorded deference to subsequent filings under the Project involving the same Material Facts and Issues. While an amended Form I-924 Application is not required to perfect a Hypothetical Project once the Actual Project details are available, some Applicants may choose to file an amended Form I-924 Application with a Form I-526 exemplar in order to obtain a favorable determination which will be accorded deference in subsequent related Filings, Absent Material Change, Fraud, Willful Misrepresentation, or a Legally Deficient Determination (discussed in more detail below).  


The Creation of Jobs:  

In developing the EB5 Visa Program, Congress intended to promote the Immigration of people who Invest Capital into our Nation’s Economy and help Create Jobs for U.S. Workers. Therefore, the Creation of Jobs for U.S. Workers is a Critical Element of the EB5 Visa Program. 

It is not enough that the Immigrant Invests Funds into the U.S. Economy; the Investment must result in the Creation of Jobs for Qualifying Employees. As discussed fully below, the EB5 Visa Program provides that each Investment of the required amount of Capital in a New Commercial Enterprise must result in the Creation of at least Ten Jobs. 

It is important to recognize that while the Immigrant’s Investment must result in the creation of Jobs for Qualifying Employees, it is the New Commercial Enterprise that creates the Jobs. 

In the Regional Center context, if the New Commercial Enterprise is not the Job-Creating Entity, then the full amount of the Capital must be first invested in the New Commercial Enterprise and then made available to the Job-Creating Entity.  

Full-Time Positions For Qualifying Employees:  

The EB5 Visa Program requires that the Immigrant Investor Invest the required Amount of Capital in a New Commercial Enterprise in the United States that “will Create Full-Time Positions for not fewer than 10 Qualifying Employees.” 8 C.F.R. § 204.6(j).  

An “Employee” is defined as follows:  

Employee means an Individual who provides Services or Labor for the New Commercial Enterprise and who receives wages or other remuneration directly from the New Commercial Enterprise. 8 C.F.R. § 204.6(e). The employee must be a “Qualifying Employee” for the purpose of the EB5 Visa Program’s Job Creation requirement.  

A “Qualifying Employee” is defined as follows:  

Qualifying Employee means a United States Citizen, a Lawfully Admitted Permanent Resident, or other Immigrant Lawfully Authorized to be Employed in the United States including, but not limited to, a Conditional Resident, a Temporary Resident, an Asylee, a Refugee, or an Alien remaining in the United States under suspension of Deportation. This definition does not include the Alien Entrepreneur [Immigrant Investor], the Alien Entrepreneur’s Spouse [Immigrant Investor’s], Sons, or Daughters, or Any Nonimmigrant Alien. 8 C.F.R. § 204.6(e). 

The EB5 Program’s Job creation requirement provides that it is “Full-Time Employment” that must be created for the Ten or more Qualifying Employees. INA § 203(b)(5)(A)(ii), 8 U.S.C. 1153(b)(5)(A)(ii).  

“Full-Time Employment” is defined as follows:  

Full-time Employment means Employment of a Qualified Employee by the New Commercial Enterprise in a position that requires a minimum of 35 Working Hours Per Week

A Full-Time Employment position can be filled by Two or More Qualifying Employees in a Job Sharing Arrangement as long as the 35-Working-Hours-Per-Week Requirement is met. However, a Full-Time Employment Position cannot be filled by combinations of Part-Time Positions, even if those Positions when combined meet the Hourly Requirement. 8 C.F.R. § 204.6(e). 

Direct Jobs that are Intermittent, Temporary, Seasonal, or Transient in Nature do not qualify as Full-Time Jobs for EB5 Program Purposes. Consistent with Prior USCIS Interpretation, however, Jobs that are expected to last for at least Two Years generally are not Intermittent, Temporary, Seasonal, or Transient in Nature. 

Due to the Nature of Accepted Job Creation Modeling Practices, which do not distinguish whether Jobs are Full- or Part-Time, USCIS relies upon the Reasonable Economic Models to determine that it is more likely than not that the Indirect Jobs are created and will not request Additional Evidence to Validate the Job Creation Estimates in the Economic Models to prove by a greater level of certainty that the Indirect Jobs Created, or to be Created, are Full-Time or Permanent. 

USCIS may, however, request Additional Evidence to Verify that the Direct Jobs will be or are Full-Time and Permanent, which may include a review of W-2s or similar Evidence at the Form I-829 Stage.  

Job Creation Requirement:  

As previously discussed, the Centerpiece of the EB5 Visa Program is the Creation of Jobs. The Immigrant Investor seeking to enter the United States through the EB5 Visa Program must Invest the required amount of Capital in a New Commercial Enterprise that will Create Full-Time Positions for at least Ten Qualified Employees. 

There are Three Measures of Job Creation in the EB5 Visa Program, depending on the New Commercial Enterprise and where it is located:  

Troubled Business:  

The EB5 Visa Program recognizes that in the case of a Troubled Business, our Economy Benefits when the Immigrant Investor Helps Preserve the Troubled Business’s Existing Jobs. Therefore, when the Immigrant Investor is investing in a New Commercial Enterprise that is a Troubled Business or, in the Regional Center context, is placing Capital into a Job-Creating entity that is a Troubled Business, the Immigrant Investor must only show that the Number of Existing Employees in the Troubled Business is being or will be maintained at no less than the Pre-Investment Level for a period of at least Two Years. 8 C.F.R. § 204.6(j)(4)(ii). 

This regulatory provision, while allowing Job Preservation in lieu of Job Creation, does not decrease the Statutory Numeric Requirement; in the case of a Troubled Business, Ten Jobs must be Preserved, Created, or some combination of the two (e.g., an Investment in a Troubled Business that creates Four Qualifying Jobs and Preserves all Six Pre-Investment Jobs would satisfy the Statutory and Regulatory requirements).  

A Troubled Business is defined as follows:  

[A] Business that has been in existence for at least Two Years, has incurred a Net Loss for Accounting purposes (determined on the basis of Generally Accepted Accounting Principles) during the Twelve- or Twenty-Four month period prior to the Priority Date on the Alien Entrepreneur’s [Immigrant Investor’s] Form I-526, and the Loss for such period is at least Equal to Twenty Percent of the Troubled Business’s Net Worth prior to such Loss. For purposes of determining whether or not 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. 8 C.F.R. § 204.6(e).   

New Commercial Enterprise Not Associated With a Regional Center:  

For a New Commercial Enterprise that is not associated with a Regional Center, the EB5 Visa Program provides that the Full-Time Positions must be created directly by the New Commercial Enterprise to be counted. This means that the New Commercial Enterprise (or its Wholly-Owned Subsidiaries) must itself be the Employer of the Qualified Employees who fill the New Full-Time Positions. 8 C.F.R. § 204.6(e) (definition of Employee).  

New Commercial Enterprise Located Within and Associated With a Regional Center:  

For a New Commercial Enterprise that is located within a Regional Center, the EB5 Visa Program provides that the Full-Time positions can be created either Directly or Indirectly by the New Commercial Enterprise. 8 C.F.R. § 204.6((j)(4)(iii). 

Investors investing in a Regional Center are subject to all the same program requirements except that they may rely on Indirect Job Creation as demonstrated through reasonable Methodologies. 8 C.F.R. §§ 204.6(m)(1), (7). 

Indirect Jobs are those that are held outside of the New Commercial Enterprise but are created as a result of the New Commercial Enterprise. For Indirect Jobs, the New Full-Time Employees would not be employed Directly by the New Commercial Enterprise. For example, Indirect Jobs can include, but are not limited to, those held by Employees of the producers of Materials, Equipment, or Services used by the New Commercial Enterprise. Indirect Jobs can qualify and be counted as Jobs Attributable to a Regional Center, based on Reasonable Economic Methodologies, even if they are located outside of the Geographical Boundaries of a Regional Center. 

For purposes of demonstrating Indirect Job Creation, Petitioners must employ reasonable Economic Methodologies to establish by a preponderance of the evidence that the required Infusion of Capital or Creation of Direct Jobs will result in a certain number of Indirect Jobs.  

Evidence of Job Creation:  

In order to show that a New Commercial Enterprise will create not fewer than Ten Full-Time Positions for Qualifying Employees, an Immigrant Investor must submit the following evidence: 

  •  Documentation consisting of photocopies of Relevant Tax Records, Form I-9, or other similar documents for Ten (10) Qualifying Employees, if such Employees have already been hired following the establishment of the New Commercial Enterprise; or 
  •  A copy of a Comprehensive Business Plan showing that, due to the nature and projected size of the New Commercial Enterprise, the need for not fewer than Ten (10) Qualifying Employees will result, including approximate dates, within the Next Two Years, and when such Employees will be hired.8 C.F.R. § 204.6(j)(4)(i). 

For purposes of the Form I-526 Adjudication and the Job Creation Requirements, the Two-Year Period described in 8 C.F.R. § 204.6(j)(4)(i)(B) is deemed to commence six months after the Adjudication of the Form I-526. 

The Business Plan filed with the Form I-526 should reasonably demonstrate that the requisite number of Jobs will be created by the end of this Two-Year Period.  

USCIS will Review a Business Plan:  

  • The Plan should contain a Market Analysis, including the names of Competing Businesses and their Relative Strengths and Weaknesses, a Comparison of the Competition’s Products and Pricing Structures, and a Description of the Target Market/ Prospective Customers of the New Commercial Enterprise
  • The Plan should list the required Permits and Licenses obtained
  • If applicable, it should describe the Manufacturing or Production Process, the Materials required, and the supply Sources. 
  • The Plan should detail any Contracts executed for the Supply of Materials and/or the Distribution of Products. 
  • It should discuss the Marketing Strategy of the Business, including Pricing, Advertising, and Servicing
  • The Plan should set forth the Business’s Organizational Structure and its Personnel’s Experience. 
  • It should explain the Business’s Staffing Requirements and Contain a Timetable for Hiring, as well as Job Descriptions for all Positions
  • It should contain Sales, Cost, and Income Projections and detail the bases therefore. Most importantly, the Business Plan must be Credible
  • Matter of Ho, 22 I&N Dec. at 213. USCIS will Review the Business Plan in its Totality to determine if it is more likely than not that the Business Plan is Comprehensive and Credible
  • Business Plan is not required to contain all of the detailed elements described above, but the more details the Business Plan contains, as described in Matter of Ho, the more likely it is that the Plan will be considered Comprehensive and Credible. 
  • In the case of a Troubled Business, a Comprehensive Business Plan must accompany the other required evidentiary documents. 8 C.F.R. § 204.6(j)(4)(ii). In the case of a New Commercial Enterprise within a Regional Center, the Direct or Indirect Job creation may be demonstrated by the types of documents identified above or by Reasonable Methodologies. 8 C.F.R. § 204.6(j)(4)(iii). 
  • When there are multiple Investors in a New Commercial Enterprise, the Total Number of Full-Time positions created for Qualifying Employees will be allocated only to those Immigrant Investors who have used the establishment of the New Commercial Enterprise as the basis for their entry in the EB5 Program. 
  • An allocation does not need to be made among persons not seeking classification in the EB5 Visa Program, nor does an allocation need to be made among Non-Natural Persons (such as among Investing Corporations). 8 C.F.R. § 204.6(g)(2). 
  • In general, multiple EB5 Visa Investors Petitioning through a Regional Center or on a standalone Basis may not claim Credit for the Same Specific New Job. Thus, as a General Matter, a Petitioner or Applicant may not seek credit for the same specifically identified Job Position that has already been allocated in a previously approved case.  

Procedural Issues:  

The EB5 Visa Program provides that the Immigrant Investor will file an Initial Petition and supporting documentation to be classified as eligible to apply for an EB5 Visa through USCIS’s adjustment of status process within the United States or through the Department of State’s Visa Application process Abroad. 

Upon Adjustment of Status or Admission to the United States, the Immigrant Investor is a Conditional Lawful Permanent Resident. INA § 216A(a). The EB5 Visa Program further provides that if, Two Years after obtaining Conditional Permanent Resident Status, the Immigrant Investor has sustained the Investment, created or can be expected to create within a reasonable period of time Ten Full-Time Jobs to Qualifying Employees, and is otherwise conforming to the EB5 Visa Program’s requirements, the conditions generally will be removed and the Immigrant Investor will be an Unconditional Lawful Permanent Resident. INA § 216A(d)(1); 8 C.F.R. § 216.6(c).  

The Sequence of Individual Investor Filings:  

An Immigrant Investor seeking Admission into the United States as a Lawful Permanent Resident will proceed in the following sequence:  

The Form I-526 Petition:  

For an Immigrant Investor who is investing in a New Commercial Enterprise that is not part of a Regional Center, the Immigrant Investor will file a Form I-526 that, together with the supporting Evidence, Demonstrates by a Preponderance of the Evidence that the Immigrant Investor has invested, or is actively in the Process of Investing, Lawfully obtained Capital in a New Commercial Enterprise in the United States that will Create Full-Time positions for not fewer than Ten Qualifying Direct Employees. 

For an Immigrant Investor who is investing in a New Commercial Enterprise that is part of a Regional Center: 

  • The Entity seeking Designation as a Regional Center will file a Form I-924 that, together with the Supporting Evidence, Demonstrates by a Preponderance of the Evidence that the requirements for a Regional Center have been met. The Individuals who establish the Regional Center can be, but need not be, the Immigrant Investors themselves; and 
  • Once USCIS designates the Entity as a Regional Center, each Immigrant Investor will file a Form I-526 that, together with the Supporting Evidence, Demonstrates by a Preponderance of the Evidence that the Immigrant Investor has invested, or is actively in the process of investing, Lawfully obtained Capital in a New Commercial Enterprise in the United States that will create Directly or Indirectly Full-Time Positions for not fewer than Ten Qualifying Employees. 

It is important to note that at this preliminary Form I-526 filing stage, the Immigrant Investor must demonstrate his or her Commitment to Invest the Capital but need not establish that the required Capital already has been invested; it is sufficient if the Immigrant Investor demonstrates that he or she is actively in the process of investing the required Capital. However, evidence of a mere intent to invest or of prospective Investment Arrangements entailing no present commitment will not suffice. 8 C.F.R. § 204.6(j)(2); see Matter of Ho, 22 I&N Dec. at 210. Similarly, at this preliminary stage the Immigrant Investor need not establish that the required Jobs already have been created; it is sufficient if the Immigrant Investor demonstrates in a Business Plan that it is more likely than not that the required jobs will be created. 8 C.F.R. § 204.6(j); 8 C.F.R. § 204.6(m).  

The Form I-829 Petition:  

Within Ninety Days Prior to the Two-Year Anniversary of the date on which the Immigrant Investor obtained Conditional Lawful Permanent Resident Status, the Immigrant Investor will file a Form I-829 to Remove the Conditions

The Form I-829 Petition to Remove Conditions must be accompanied by the following Evidence: 

  • Evidence that the Immigrant Investor Invested or was Actively in the Process of Investing the required Capital and Sustained this Action throughout the Period of the Immigrant Investor’s Residence in the United States. The Immigrant Investor can make this showing if he or she has, in Good Faith, Substantially met the Capital Investment Requirement and continuously maintained his or her Capital Investment over the Two Years of Conditional Residence. At this stage the Immigrant Investor need not have invested all of the required Capital, but must have substantially met that Requirement. The Evidence may include, but is not limited to, an Audited Financial Statement or other Probative Evidence such as Bank Statements, Invoices, Receipts, Contracts, Business Licenses, Federal or State Income Tax Returns, and Federal or State Quarterly Tax Statements; and 
  • Evidence that the Commercial Enterprise Created or can be expected to Create, Within a Reasonable Time, Ten Full-Time Jobs for Qualifying Employees. In the case of a Troubled Business, the Immigrant Investor must submit evidence that the Commercial Enterprise maintained the number of existing employees at no less than the pre-investment level for the period following his or her admission as a Conditional Permanent Resident. At least Ten Jobs must be Preserved or Created per Immigrant Investor. The evidence may include, but is not limited to, Payroll Records, Relevant Tax Documents, and Forms I-9. See 8 C.F.R. § 216.6(a)(4)(ii-iv). 
  • It is also important to note that the EB5 Visa Program allows an Immigrant Investor to become a Lawful Permanent Resident, without conditions, if the Immigrant Investor has established a New Commercial Enterprise, substantially met the Capital Requirement, and can be expected to create within a Reasonable Time the required number of Jobs. All of the Goals of Capital Investment and Job Creation need not have been fully realized before the conditions on the Immigrant Investor’s Status have been removed. 
  • Rather, the regulations require the submission of Documentary Evidence that establishes that it is more likely than not that the Investor is in “Substantial” compliance with the Capital requirements and that the Jobs will be created “Within a Reasonable Time. 
  • The “Within a Reasonable Time” requirement permits a degree of flexibility to account for the realities and unpredictability of starting a Business Venture, but it is not an Open-Ended allowance. The regulations require that the Business Plan submitted with Form I-526 establish a likelihood of Job Creation “Within the next Two Years, 8 C.F.R. § 204.6(j)(4)(i)(B), demonstrating an expectation that EB5 Projects will generally create Jobs within such a timeframe. Whether a lengthier time frame for job creation presented in a Form I-829 is “Reasonable” is to be decided based on the totality of the circumstances presented, and USCIS has latitude under the law to request additional evidence concerning those circumstances. Because the Law Contemplates Two Years as the baseline expected period in which Job creation will take place, Jobs that will be created within a year of the Two-Year Anniversary of the Alien’s admission as a Conditional Permanent Resident or Adjustment to Conditional Permanent Resident may generally be considered to be created within a reasonable period of time. 
  • Jobs projected to be created beyond that time horizon usually will not be considered to be created within a Reasonable Time, unless Extreme Circumstances, such as force majeure, are presented

Furthermore, nothing in this change in policy relieves an Alien Investor from the requirements for removal of the conditions as set out in 8 U.S.C. § 1186b(d)(1) and 8 C.F.R. § 216.6(a)(4). Thus, even in the event of a change in course, a petitioner must always be able to demonstrate  

  •  That the Required Funds were placed “At Risk” throughout the period of the Petitioner’s residence in the United States, and 
  •  That the Required Amount of Capital was made available to the Business or Businesses most closely responsible for Creating the Employment
  •  That this “At Risk” Investment was “Sustained Throughout” the period of the Applicant’s residence in the United States; and 
  •  That the Investor Created (or Maintained, if applicable), or can be expected to Create within a Reasonable Period of Time, the Requisite Number of Jobs

Accordingly, if an Alien Investor fails to meet any of these requirements, he or she would not be eligible for removal of conditions

While changed circumstances after the Investor has been admitted in Conditional Lawful Permanent Resident Status may not require the filing of an amended Form I-526 Petition in order for the Investor to proceed with and obtain an approval of a Form I-829 Petition, changed circumstances which are material may prevent deference from being accorded to the prior determination and a more extensive review will need to be conducted at the Form I-829 Stage. 

However, there may be advantages to closely adhering to the Business Plan described in the Form I-526. If the Alien Investor follows the Business Plan described in the Form I-526, USCIS will not revisit certain aspects of the Business Plan, including issues related to the Economic Analysis supporting Job Creation. Thus, during review of the Form I-829, USCIS will generally rely on the previous adjudication if the Petitioner claims to have fulfilled the Business Plan that accompanied the Form I-526 petition.  

Conclusion:  

Congress created the EB5 Visa Program to promote Immigrants’ Investment of Capital into New Commercial Enterprises in the United States so that new Jobs will be created for U.S. Workers. The EB5 Visa Program provides for flexibility in the types and amounts of Capital that can be invested, the types of Commercial Enterprises into which that Capital can be invested, and how the resulting Jobs can be created. This flexibility serves the promotion of Investment and Job Creation and recognizes the Dynamics of the Business World in which the EB5 Visa Program Exists.  

 

Note: Information provided herewith, is for educational purpose of Investment based Immigrant investors to help make informed investment decision.

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