Frequently Asked Questions - EB-5 Law & Related U.S. Law

Dependents would also lose their conditional PR status also. Until the Principal Applicant obtains permanent green card status, dependents' status depends on PA's status.

Interesting question. We think (we are not sure as CSC has not answered this one) that CSC would say "no", because they apparently consider the jobs to be "new", and they would argue that these were existing part-time positions which got "upgraded" to full-time positions and therefore, they are not "new" jobs. Again, one can make a strong argument that there is nothing in the EB-5 statues and regulations prohibiting this kind of "full-time" jobs from being counted, but here is the problem: USCIS can also argue there is nothing in the EB-5 statues and regulations that says you can do this. Who's right? We believe where the issue is grounded in real life situation, and relevant EB-5 statues and regulations do not prohibit specifically, USCIS should follow practical approach and count this kind of full-time jobs.

Does this make sense? We do not think so. Anyway, this question should be posed to CSC directly.

The reason why we believe EB-5 Program has not reached its potential is precisely because there is no clear guidance on this type of questions. It's weird when the EB-5 Program has been in existence for over 15 years but to date, there has been no answers to these kinds of questions. We, as EB-5 practitioners, should not be timid about asking this type of questions.

We believe that USCIS will rule that this is not the "new" commercial enterprise. We believe there was AAO case law on this. Also, common sense would dictate this conclusion. Therefore, unless there is a requisite "expansion" or "restructuring", no "new" commercial enterprise has been established. Basically, under the EB-5 law, "restructuring" is a very hazy concept which USCIS has not bothered to clarify; therefore, it's best to avoid any "restructured" EB-5 project. Also, when it comes to proving "expansion", not that easy in practice.

Even if the above structure qualifies as a "new" commercial enterprise, as readers of the www.eb-5center.com site knows, additional jobs must be created in addition to any existing jobs.

No, you cannot, because direct, individual EB-5 cases require jobs to be created directly. Jobs that are created by making loans to job-creating business(es) are all indirect and/or induced jobs.

This is an interesting question and happens more often that one thinks.

Now, EB-5 law says one holding companies which wholly-owned subsidiaries can be treated as a New Commercial Enterprise for EB-5 purpose. Also, the investment and jobs created in the past can qualify for EB-5 case, as long as the jobs are maintained for a new CPR period after I-526 approval. However, we would not take the case if we were the processing attorney for the following reasons:

1. CSC could argue that not all $1 MM (assuming this is a regular, non-TEA EB-5 case) went towards the job creation. In the instant case, only $400,000 was applied towards the job-creation, and that the remaining two companies (now wholly-owned subsidiaries) did nothing.

2. CSC could argue that since you materially change the original structure, you now have to make an entirely new investment.

All of the above arguments that could be made by CSC might not be practical or fair, but they could and will likely make those arguments and deny your EB-5 case. No, we would not take the above case, given this possibility.

In a direct EB-5 case, the answer is "no", because the underlying new commercial enterprise must create jobs directly, and only for-profit entities can be new commercial enterprises. However, in a regional center EB-5 case where a new commercial enterprise is engaged in making loan(s), i.e., Izumii case, borrower entity creating jobs can be a non-profit organizations such as museums and non-profit hospitals or churches.

In our opinion, USCIS will have some issue with this arrangement, because basically this loan is given on the borrower's good credit or name. It's like Bill Gates going to any bank and getting a loan purely based on his perceived ability to make money. What is a loan collateralized by personal asset is sometimes a grey area, because one could argue that one's good name is personal asset also.

There is no other case or memo, although it is true that the full amount of money must be made available to the entity most closely related to the job-creation. The best guidance for the phrase "make available"is dictionary definition and common sense: either loan (in case of regional center based EB-5 project), invest, give or provide money to the job-creating entity, i.e., restaurant subsidiary in this case and use it some way towards the job creation.

You must have a nice friend. :) The EB-5 regulations state that the capital must have been obtained "through lawful means." 8 CFR 204.6(j)(3). Therefore, the emphasis of proof should be on showing that the giver of this gift made money "lawfully", rather than showing that the gift tax was paid.

It should be noted that different countries have different laws about gifts. Some countries do not impose tax on gifts, while some countries require receivers, rather than givers, to pay tax on the gifts.

USCIS Answer: Yes, the jobs created a number of years ago still count, and yes they must be maintained during the conditional resident period.

If the new commercial enterprise entity just changes its name and EIN number but remains the same in other respects, USCIS will accept the entity as the same entity, but if any additional changes are involved, USCIS will decide on case-by-case basis.

According to USCIS, at the time of filing (not at the time of investment) I-526 petition. Even if TEA designation changes in future, it's OK, as long as this initial requirement has been met.

It's a form used to give up one's permanent residence status in front of a consular office at the American Embassy abroad. Under the U.S. immigration law, a permanent resident can "give up" his or her permanent residence at the American Embassy by giving a written affidavit statement.

In USCIS' own words:

USCIS is in the process of updating the language regarding this issue on the Form I-829 receipt notice which will resolve this issue.

USCIS' answer:

In accordance with 8 CFR 216.6(d)(2), if after review of the petition, the director denies the petition, he or she shall place the investor in removal proceeding by issuing a Notice to Appear (NTA). The investor may seek review of the petition during removal proceedings. Petitions are sent to CSC’s NTA unit after the denial of the petition. The NTA unit prepares the NTA and issues it to the investor via mail. The investor's lawful permanent resident status and that of his or her dependent spouse and children are terminated as of the date of the director's written decision. Generally an NTA is not issued if USCIS determines that an investor or a family member is out of the United States and their status is terminated. If an investor or a family member is out of the United States at the time that their status is terminated, then he or she will be put into removal proceedings at the time of their application for admission. An alien investor retains conditional resident status and is entitled to proof of that status while he or she obtains review of the USCIS termination in removal proceedings.

This is what USCIS stated on this issue.

This question cannot be answered in the abstract without a clear presentation of the facts in the record of proceeding. Whether a particular case with this fact pattern can be approved is dependent upon a review of the specific evidence of record.

Actually, in our opinion, USCIS did not need to hedge their answer. In our opinion, the answer would be "no" based on the USCIS' past rationale on a similar issue and the Izummi precedent AAO case, because the entity closest to job-creation are retail stores and they must be located in TEA; otherwise, the requisite investment should be $1 MM case.

Because this question is very important, USCIS' answer is quoted below in its entirety.

The regulation at 8 CFR 204.6(i) provides that a state government may designate a particular geographic or political subdivision located within a metropolitan statistical area or within a city or town having a population of 20,000 or more within such state as an area of high unemployment (at least 150% of the national average rate.) The following reasoning for involving states in this process was noted in legacy INS’ final rule implementing the initial EB-5 regulations, Employment-Based Immigrants, [56 FR 60897]:
Twelve commenters called for the Service to change the definition of targeted employment area. The Service cannot, of course, alter the statutory definition of targeted employment area. The Service has concluded, however, that the designation of smaller geographic or political areas within metropolitan statistical areas or within cities or towns with a population of 20,000 or more as areas of high unemployment would comport with the intent of Congress regarding targeted employment areas. [emphasis added]

This part of the rule contains a method for the designation of such geographic or political areas as areas of high unemployment. Under the final rule, a state government may delegate to any agency, board, or other appropriate state governmental entity the authority to certify that geographic or political subdivisions of non-rural areas within the state qualify as areas of high unemployment. The delegation must be reported to the Immigration and Naturalization Service through the Associate Commissioner for Examinations prior to the issuance of any area designation. The evidence of such area designations that a state provides to a prospective alien entrepreneur should include a description of the boundaries of the geographic or political subdivision and the method or methods by which the unemployment statistics were obtained.

This part is not intended to place any unnecessary burden upon any state. With respect to geographic and political subdivisions of this size, however, the Service believes that the enterprise of assembling and evaluating the data necessary to select targeted areas, and particularly the enterprise of defining the boundaries of such areas, should not be conducted exclusively at the Federal level without providing some opportunity for participation from state or local government. This part of the rule is merely intended to afford the states a method by which particular areas of high unemployment within their boundaries may qualify as “targeted,” and to allow alien entrepreneurs the opportunity to invest in such areas under the targeted employment area guidelines, including lowered investment amounts.

Based upon the reasoning provided in the final rule, state-issued TEA designations under 8 CFR 204.6(i) must be in accordance with the statutory definition of targeted employment in INA §203(b)(5)(B), which requires that a targeted area either be “rural” or an “area of high unemployment.” Further, 8 CFR 204.6(i) does not provide states with the authority to make TEA designations regarding whether a certain area qualifies as “rural”. Any state TEA designation must involve the assembly and evaluation of data in a manner sufficient to arrive at a defensible finding of high unemployment within the bounds of the area to be designated in a manner that is in keeping with the statutory requirement. That is why 8 CFR 204.6(i) provides that state designations be accompanied by a description of the boundaries of the geographic areas, and explain the method or methodologies by which the unemployment statistics were obtained. While state governments clearly have the authority to make TEA designations, states governments do not have the authority to designate areas as high unemployment that do not in reality qualify as a targeted area under INA §203(b)(5)(B).

It appears that this question solicits confirmation from USCIS that state-sanctioned attempts to “gerrymander” a finding of high unemployment that is not in accordance with the statutory requirement, through the cobbling together of various portions of political subdivisions so that an investment in a commercial enterprise in a location that is not a high unemployment area would ultimately qualify as one, is an acceptable business practice for EB-5 purposes. On its face, this supposition blatantly frustrates the congressional intent behind INA §203(b)(5)(B). As such, USCIS cannot confirm that this is an acceptable business practice for states to use in making TEA designations.

Whew . . . a long answer, huh? Whenever an answer is this long, that means they want to hedge both ways: they want to allow and disallow . . . at the same time.

Let me quote USCIS' answer to this particular question in its entirety:

Yes, as long as the alien investor’s capital is “at risk”, and the indemnity policy does not constitute a redemption agreement or a guaranteed buy-back arrangement for the alien investor’s investment in the commercial enterprise. A determination as to whether a specific indemnity policy is contrary to the statutory and regulatory requirements has to be made on a case-by-case basis.

USCIS, to make sure that EB-5 investors do not rush into buying insurance (assuming they can get an insurance for this kind of thing) states that a "case-by-case basis" determination will be made. This kind of language usually means: "It's legally possible but we don't think it's a good idea."

CSC takes the position that such relocated jobs cannot count. Their rationale is as follows:

This question asks that if a large architecture firm moved offices from New York City to San Francisco, would those relocated jobs count for EB-5 purposes since San Francisco would benefit from an increase in jobs? The answer is no, because jobs that were in existence prior to the alien investor’s capital investment into the commercial enterprise cannot be credited towards the requisite creation of 10 jobs per each alien investor.

This is a curious answer given the fact that USCIS readily admits that

USCIS is unaware of any statutory or regulatory requirement, or of any vetted and published policy guidance that addresses the “discounting of relocated jobs” within a regional center’s economic analysis.

Basically, USCIS had an opportunity to choose a more practical position, but it simply chose to stick to a position which does not jibe with the real world needs, perhaps fearing that it would not have the means to check whether such relocation was truly necessary due to bona-fide business reason.

We believe a federal court will not agree with USCIS on this issue. Common sense wise, if a job is "new" to SF, and there was a bona fide business reason why the relocation was necessary, and there is a nexus between the alien investor's investment in SF and the "new" jobs being relocated to SF, then all EB-5 requirements have been met. Really, the heart of the issue goes to whether the jobs are "new" from the perspective of the United States, or are "new" from the perspective of SF, the underlying region. Where USCIS already stated that indirect jobs created outside the underlying region cannot count towards I-829 petition, it seems incongruous or illogical to state that the jobs relocated into the region should not count: if the jobs are "new" to the underlying region, and such relocation was due to bona fide business reason, then the relocated jobs should count as "new" to the underlying region.

Of course, disagreeing with the USCIS is one thing; spending a lot of money and time to fight USCIS is an entirely different matter.

Yes, because of the Section 11036 of the 21st Century Department of Justice Appropriations Authorization Act, Public Law No. 107-273, the alien investor does not have to have been involved in the creation of the existing commercial enterprise as noted above. Moreover, the alien’s investment would qualify without the need to show that the “new” commercial enterprise was “expanded” or “restructured/reorganized” under 8 CFR 204.6(h)(2) and (3).

However, the alien EB-5 investor still has to create the requisite 10 full-time employment.

Therefore, an EB-5 investor can purchase an existing business, as long as the business was established AFTER November 29, 1990, and meet the "new" commercial enterprise requirement; but the investor still has to create ten, new jobs, and cannot rely on the existing jobs.

By the way, CSC will not like the buyer-investor purchasing just assets (excluding existing employees) and then rehiring the same laid off employees.

In context of a regional center based EB-5 project where a new commercial enterprise engages in making loan(s) to job-creating businesses, while a non-profit cannot act as a new commercial enterprise entity (NCE), as the very definition of NCE precludes non-profits, a NCE can pool money and loan such pooled funds to non-profit which creates jobs. Why, simply because there is no prohibition, and jobs are jobs whether created by a non-profit or a profit entity. For example, a limited partnership can be set up to pool investors' funds and then loan such funds to a non-profit arts organization to construct a museum in a regional center geographic area.

The answer is "no". Don't try it, even though such action would save a lot of tax for the EB-5 investor. USCIS or CSC will deny your case. Their current position is that any transfer of money into a new commercial enterprise other than from the EB-5 investor's personal bank account does not comply with EB-5 law. We do not know if USCIS will allow transfers into a new commercial enterprise from a trust in which the EB-5 investor is a beneficiary.

The key is not get too creative, or you will get slammed.

I assume this is a non-regional center but TEA EB-5 case. The answer is "yes". Since this is a non-regional center EB-5 case, only direct jobs would count; therefore, those direct jobs created should be in the underlying TEA area in which the new commercial enterprise is located in. Otherwise, you can have a new commercial enterprise located in Hawaii and the jobs created in California. USCIS would not like that too much.

Each investor in a “troubled business” must show that the investment will save ten jobs. Therefore, 4 more jobs must be created. Basically, although 6 full-time jobs can be saved, 4 more full-time positions must be created. An EB-5 project involving a "troubled business" may offer some advantages, but from a marketing point of view, potential alien investors are afraid of investing in any business that is considered to be "troubled".

A flippant but not a false answer is "EB-5 law is whatever USCIS decides the EB-5 law is." There are certain broad EB-5 statutes and USCIS regulations promulgated pursuant to these statutes, plus precedent AAO decisions, guidance memos and some federal court cases. The problem is that there is no clear guidance on many of the issues arising from real-world scenarios. Also, if USCIS ever decides to construe adjudications of cases strictly, more denials will occur. Because the EB-5 law is not very clear aside from some basic requirements, you almost have to sacrifice the business side of the new commercial enterprise in order to satisfy the I-829 requirements.

Having said this, there have been some important improvements and efforts made by USCIS in the EB-5 area during the last 5 years, but not enough and not fast enough. Oh well, I sound like a broken record . . .

The relevant issue is as follows. Although it is permissible for the fund to be invested in different businesses and different businesses created different number of jobs, this holding company (to be considered a new commercial enterprise) is contemplated to be formed "after the fact", and the holding company did not exist at the beginning of the investment period. Therefore, my answer would be no.

If the holding company had been formed before the relevant facts have transpired and then the two subsidiaries were formed, received funds and then operated the respective businesses, then the answer would be "yes", but that's not the case here.

People might disagree on the answer, but in our opinion, USCIS denied a majority of I-526 petitions during this "black" period for EB-5 Program primarily for two reasons. First, they did not believe jobs were being created in the applicable region. Second, promissory notes were being used so that eb-5 investors were not investing that much money to begin with, i.e., often deposited around $125,000 of the requisite $500,000 USD and carried the remainder on a promissory note. Third, limited partnerships contained provisions stating that it would guarantee payments, etc.

Like any new program, there were some new programs that just "bent" the rules too much, and honestly, USCIS had also issued inconsistent or conflicting guidelines. This is why USCIS does not want to make the same mistake again and is now being very sensitive about making sure any guidance memos they issue are at least consistent and comply with their interpretation of the EB-5 statutes.

No one knows. We don't even think USCIS itself knows because they are very busy, and they need to think through very carefully before they release anything. Also, such guidance memos need to be reviewed by many USCIS officers and revised before they can be released. Based on how long USCIS took to release the first guidance memo -- the Neufeld memo of June 2009 -- we would not be surprised if it takes several years for next 3 or 4 guidance memos to be released. There is some chance that EB-5 statutes might be amended before then. :)

There is a regulatory provision which specifically prohibits a new commercial enterprise from non-commercial activity such as owning and operating a personal residence. Although legally speaking, you would be using the houses for commercial activities in housing your employees and customers, I would make sure not to count the houses in the capital amount of your investment. It would all depend on the individual examiner reviewing and adjudicating your I-526 and I-829 submissions, but spending 80% of the requisite investment amount towards the purchase of a house (used for whatever purpose) will not look good and raise suspicions all over the place.

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. This definition shall not include a noncommercial activity such as owning and operating a personal residence.

The word "new" in the context of "new commercial enterprise" is defined as any commercial enterprise formed after November 29, 1990. If the commercial enterprise is formed before this date, then to fall within the definition of "new", the existing, i.e., already-established commercial enterprise must be "restructured" or "expanded". No one is sure what is meant by "restructured"; therefore, proceeding through a "restructured" case is not recommended.

The "commercial enterprise" is defined as "any for-profit entity formed for the ongoing conduct of lawful business." Therefore, a limited partnership or corporation can and does qualify as a new commercial enterprise.

No, the approval of I-829 and the U.S. tax obligations are two separate matters. Tax planning, where appropriate, is recommended in advance of obtaining CPR status.

We have no doubt that these cases will be scrutinized more closely from both security and lawful source angles, although there is no formal words from USCIS stating such; and I don't think USCIS will ever make such formal statements.

Our advice is that you immediately sit down with your current EB-5 attorney or with another EB-5 attorney and figure out what are your options. Do not wait until you get a I-829 denial to do this because it may be too late by then: You will be deemed to be "out of status" upon your receiving a I-829 denial notice from USCIS, and this will prohibit you from applying for adjustment or change of status in the United States.

Go to www.eb-5center.com/eb-5_requirements to read an overview of the essential requirements of EB-5 case. Many articles helpful to your understanding of the EB-5 law are posted at "Easy as EB-5" section above.

I am no expert on the U.S. Securities law, but the below is my understanding. Most, if not all, Regional Center EB-5 projects are offered or marketed to potential EB-5 investors without SEC and/or state registration requirements under either Regulation D or Regulation S exemptions, because such registration requirements are onerous. This means they can be (according to my understanding) offered to potential EB-5 investors as follows:

Within the United States: In reliance upon Rule 506 promulgated by the SEC, to only those persons who are deemed to be "Accredited Investors" within the meaning of Rule 501 promulgated by the SEC. Accredited Investor is defined as any person whom the issuer reasonably believes at the time of subscription to be:

• any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1,000,000 USD;

or

• any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of two most recent years, and has a reasonable expectation of reaching the same income level in the current year.

Outside the United States: In reliance upon Regulations promulgated by the SEC, only to those persons who are not "U.S. Persons" within the meaning of such Regulations. U.S. Persons are defined as any natural person "resident" of the United States. "Resident" presumably means who are not physically residing in the United States, and as such, non-immigrants will probably not qualify as "non-U.S. Persons".

Attorney named Jennifer Moseley appears to be very knowledgeable in this area, so we recommend that you talk to her.

I-526 can be filed based on the investment made in the past and requisite jobs created in the past, but those jobs must be maintained during CPR period. In some sense, with the jobs already created, USCIS might be more inclined to approve I-526 without any hassle.

Under the relevant regulation, EB-5 project (whether RC project or non-RC project) can involve a "troubled business".

Troubled business

means 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 Form I-526, and the loss for such period is at least equal to twenty per cent 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.

The regulations confer certain benefit(?) to an EB-5 project involving "troubled business", as follows:

(ii) Troubled business. To show that a new commercial enterprise which has been established through a capital investment in a troubled business meets the statutory employment creation requirement, the petition must be accompanied by evidence that the number of existing employees is being or will be maintained at no less than the pre-investment level for a period of at least two years. Photocopies of tax records, Forms I-9, or other relevant documents for the qualifying employees and a comprehensive business p lan shall be submitted in support of the petition.

The non-legal problem with an EB-5 project involving a "troubled business" is a negative connotation associated with the troubled business. Many potential EB-5 investors may say rightly or wrongly "I don't want to invest in an EB-5 project if it's troubled."

Also, certain undetermined issues related to "troubled business" EB-5 project is whether there must be 10 or more full-time jobs at pre-investment point of time. For example, if there were only 7 full-time jobs at the pre-investment point of time, can this qualify? What if 3 new full-time jobs are created in addition to maintaining 7 full-time jobs that pre-existed? As you can see, the questions remain.

The answer is No. If you had to show lawful source for all 100% of your entire assets, even Bill Gates would not be able to do that. Usually, the only thing that is required is for you to show that you lawfully earned the requisite investment amount for EB-5. Having said this, however, in limited cases, USCIS might ask for additional docs and proof; therefore, a careful planning might be required; and you should discuss in detail with your U.S. immigration attorney.

"Job sharing" is defined as a form of part-time employment in which the schedules of two part-time employees are arranged to cover the duties of a single full-time position. For example, each job sharer may work a portion of the day or week.

Only in a limited circumstances can two part-time waiter/waitress positions be argued to fall under a "job-sharing" arrangement, but I guess one can try to make that argument.

Why do we believe that the above reg. is flawed? Because of the very fact that it is too hard to make a distinction between one regular part-time position and a "job-sharing" part-time position. No matter how you slice an apple, it's still an apple. In addition, 0.5 + 0.5 should equal 1.0. In other words, jobs are jobs, whether they are part-time positions or full-time positions.

We believe that it would make more sense to allow two part-time positions of the same job duties to be combined to count as one full-time position. For example, it does not seem to us to be unreasonable that two "part-time" waitress positions at the same restaurant where each is working 25 hours per week should be allowed to be combined to count as one "full-time" position for EB-5 purpose, regardless of whether they are in a "job-sharing" arrangement?

Let's examine how this "establishment" requirement used to adversely affect both the regular, direct, individual EB-5 project and Regional Center EB-5 project.

In context of regular EB-5 project, the "establishment" clause meant that the investor could not just purchase an existing business even though the business was "new" -- that is, it was created after November 1990. This meant if the investor decided to acquire an existing business, he had to "materially" alter the business, so he could argue that he "established" a new business (or new commercial enterprise). This was the kind of requirement that prohibited bona-fide EB-5 projects to take place, because there is really no reason why you should discourage foreign EB-5 investors to invest in existing U.S. businesses.

In context of Regional Center EB-5 project, since the new commercial enterprise was usually a limited partnership or a like-kind legal entity into which the pooled moneys of individual EB-5 investors were invested, the requirement that an individual EB-5 investor(s) "establish" this Limited Partnership meant that such individual investors had to be the very individuals who initially set up and put in their investment at the beginning. This was totally contrary to the real-world commercial requirements, because in the real world, an incorporator establishes a corporation or limited partnerships and then goes about attracting investments from individual investors. Anyway, this is just one amendment which had to take place to make the Regional Center EB-5 Program work.

Therefore, this was a "hardware" amendments which were made to at least make the RC Program feasible, and some "software" improvements or changes were made, but more are supposedly underway. Of course, some people are concerned that these changes may not really be improvements but rather impairments. We just have to wait and see, but at least now, USCIS is more sensitive to the needs of EB-5 Program, but is vigilantly guarding against any RC Programs that are not bona-fide.

There is INS memo by Weinig, Acting Asst. Comm. Adjudications (Aug 5, 1992), reprinted in 11 AILA Monthly Mailing 776 (Oct. 1992) that says this is allowed. In practice, this should be no problem.

Yes, the regs specifically allow this. Here is the regulation on point.

Employment creation allocation. The total number of full-time positions created for qualifying employees shall be allocated solely to those alien entrepreneurs who have used the establishment of the new commercial enterprise as the basis of a petition on Form I-526. No allocation need be made among persons not seeking classification under section 203(b)(5) of the Act or among non-natural persons, either foreign or domestic. The Service shall recognize any reasonable agreement made among the alien entrepreneurs in regard to the identification and allocation of such qualifying positions.

You should not lose your immigration status if you become divorced after having obtained CPR status, and the viability of I-829 does not depend on your divorce. In fact, the immigration regulations specifically state that "the former spouse of an entrepreneur, who was divorced from the entrepreneur during the period of conditional residence, may be included in the alien entrepreneur's petition [to remove conditions - Form I-829] or may file a separate petition."

Yes, this issue was answered recently by USCIS in a liaison meeting minutes. See below copied content from this liaison meeting minutes on point. Basically, as long as you create 10 new, full-time positions, you can go for an EB-5 case. However, creating 10 new, full-time positions for an existing restaurant is easier said than done. And no, you cannot fire all the existing restaurant employees and then hire new employees to replace the existing employees who were let go. That comes close to a fraud.

ii. Does Congress' deletion of the establishment requirement in 2003 (which did away with the requirement that the alien entrepreneur personally establish the commercial enterprise) mean an EB-5 investor can purchase an existing business that was created after November 1990 (meaning the commercial enterprise is "new"), as long as job requirements are met, without having to restructure the commercial enterprise? Section 22.4(h) of the Adjudicator's Field Manual seems to suggest this interpretation.

Response: Yes, an alien may demonstrate that a new commercial enterprise has been established by proving that it was established after November 29, 1990. In such cases, the alien does not need to further restructure, reorganize, or expand the business in order to meet the requirements of 8 CFR, 204.6(h).

The first requirement of any investor after they receive the visa at the United States overseas consulate office is to enter into the United States within 180 days of visa issuance from the consulate. The investor must then establish residency in the United States. Evidence of intent to reside includes opening bank accounts, obtaining a driver's license or social security number, paying state and federal income taxes, renting or buying a home. The United States resident may work overseas if required based upon the nature of the business or profession. For those permanent residents living outside the U.S., we suggest the investor and family re-enter the U.S. no less than once every six months. The longer the investor and family are present in the U.S., the less likely the government is to claim that the investor "abandoned" the United States as a permanent residence – thereby endangering his green card status. In some cases, investors may seek the issuance of a "reentry permit" which allows the Investor permission to remain outside the U.S. for as long as two years without having to reenter the country to maintain permanent resident status.

An accredited investor is a term defined by various security laws that describes investors permitted to invest in certain types of higher risk investments, limited partnerships, hedge funds and angel investor networks. In the U.S. an individual is considered to be an accredited investor if they have a net worth of at least $1 million US dollars or have made at least $200,000 US dollars each year for the last two years ($300,000 with spouse if married) and have the expectation to make the same amount in the current year.

Yes, if you are currently residing in the US on a non-immigrant visa in order to apply for any Regional Center Program, you must prove to be an accredited investor. The $530,000 US dollars that will be used for the investment can be counted towards the requirement of $1 million US dollars in assets.

There are specific risk factors for each limited partnership, which are included in the offering materials for the limited partnership. Risk factors differ for each partnership but general risks include economic conditions, failure to meet job requirements and denied immigration status under the USCIS EB-5 Immigrant Visa Program.

The above risks are set forth in standard language, similar to the risk disclosure whenever you purchase mutual fund, etc.

Sure. A limited partnership, used by most Regional Center EB-5 project as a New Commercial Enterprise, is a business organization with one or more general partners, who manage the business and assume legal debts and obligations, and one or more limited partners, who are liable only to the extent of their investments. Limited partners also enjoy rights to the partnership's cash flow, but are not liable for company obligations.

No, unlike the Canadian Investor Immigrant Program, the EB-5 investor is not required to have any prior business experience. Likewise, the investor is not required to demonstrate any minimum level of education. The only requirement for the investor is that he or she has the required net worth and capital and prove that the funds are legal, through proper documentation.

The EB-5 program allots 10,000 visas per year for aliens and family members whose qualifying investments result in the creation or preservation of at least ten (10) full-time jobs for U.S. workers. Three thousand (3,000) of these immigrant visas are set-aside for aliens who invest through regional centers. But it should also be noted that additional 3,000 of these immigrant visas are set aside for aliens who invest in TEA area.

Yes, but all CPRs or LPRs are subject to certain parameters of being away from the U.S. for a prolonged period of time. Therefore, you should discuss with your U.S. immigration attorney in detail your need to travel outside the U.S. after you acquire CPR status.

I don't know if it's such a good idea for friends to go into a business together, but even if each of you invest the required amount, each of you also must create the requisite jobs -- meaning each of you must create 10 full-time jobs. As long as you can do that, both of you can process EB-5 cases.

Legally speaking, the regs say the requisite employment must be created within the two-year period immediately following the investor acquiring conditional permanent resident (CPR) status. However, for practical purposes (and in our opinion, the only logical interpretation) is that the requisite jobs must be created by the time I-829 is reviewed, or if USCIS allows in its discretion, within "a reasonable period of time therefrom". In our opinion, the two years definitely is not from the submission or approval of I-526 petition, because that would lead to a totally incongruous results, because CPR acquisition date definitely does not equal the I-526 submission or approval date. Some sort of "reasonable" interpretation must be applied to any statutes and regulations. This is not to say that some portions of EB-5 statutes and regulations are unclear; they are unclear, and read literally, leads to an unworkable results.

The problem might have been created by sometimes inconsistent interpretations of the statutes and regulations utilized by USCIS. An argument can be made that USCIS appears to ignore the literal languages of the statutes and regulations, while at other times, USCIS appears to apply the literal language. This is okay, as long as there is an over-arching philosophy or objective behind where the EB-5 Program should be headed, but often, the principals of USCIS governing EB-5 Program changes. It is sincerely hoped that more consistent, reasonable and practical interpretations of relevant statutes and regulations be applied and implemented by USCIS examiners. After all, it's the examiners who decide each individual I-526 and I-829 cases, not the policy-makers or Congressmen.

No, but your relative or friends can fill the positions, as long as the positions are bona-fide positions, and they really will be working.

"New" means any for-profit entity established after November 29, 1990. For practical purposes "new commercial enterprise" can take any one of four forms: 1) the creation of new business; 2) the purchase of an existing business, which is reorganized to form a new enterprise (you don't want to try this!); 3) the expansion of an existing business; or 4) the saving of a failing business.

Legally, you can show that you have invested or be in the process of investing, but in the latter case, you have to prove availability of the funds and an actual commitment of the required fund. Therefore, it is a lot more difficult route that you should avoid in all cases.

Although both statutes and regulations are silent on this point, the AAO has held, however, that construction jobs do not qualify for direct job creation, but USCIS has stated that it is willing to allow the indirect and induced job creation from construction jobs in EB-5 regional center cases, but of course, not in direct, individual EB-5 case.

The practical difficulty in counting direct, construction jobs is that often these jobs are not full-time and are independent contractors of sub-contractors. Perhaps a certification letter from the General Contractor overseeing the entire project might work for I-526 purpose, but it might be very hard to get all documentation needed to prove Direct jobs at I-829 stage.

No, under the EB-5 law, investor and family members cannot be included in the 10 full-time jobs to be created. Also, only CPR, LPR or USC workers qualify, meaning someone who is on F-1 visa cannot be included in the 10 new positions.

The "EB-5 law" is a term of convenience and has a broad meaning. It refers to the law governing EB-5 under the U.S. immigration law system. This means appropriate immigration statutes must be examined, then immigration regulations promulgated pursuant to these statutes, then agency rules, Department of State or consular regulations, as well as USCIS guidances. The term also includes precedent Administrative Appeals Office (AAO) on EB-5 cases, as well as some federal court cases deciding on some key issues of EB-5 law. Furthermore, the term also includes what is "understood" to be allowed and disallowed by USCIS EB-5 Headquarters. At this time, the USCIS is trying to make their positions more clear on various material issues related to EB-5 projects. Therefore, sometimes it is a challenge for even an an experienced U.S. immigration attorney to keep up with all the nuances and developments within the EB-5 area.

Under the EB-5 law, the EB-5 project has to be either Targeted Employment Area or Rural Area, to permit only $500,000 USD investment. Definitions of these terms are as follows:

Rural area means any area not within either a metropolitan statistical area (as designated by the Office of Management and Budget) or the outer boundary of any city or town having a population of 20,000 or more. Targeted employment area means an area which, at the time of investment, is a rural area or an area which has experienced unemployment of at least 150 per cent of the national average rate.

Since the TEA concept includes rural area concept, the simple answer is that the EB-5 project has to be a TEA area project. Note being a Regional Center EB-5 project has nothing to do with the amount of investment required; it has to do with the way the requisite jobs can be created.

Under the EB-5 law, the principal applicant's spouse and the children who were under 21 years of age at the time I-526 immigrant petition was received by USCIS office can obtain CPR and LPR status. It should be noted that even in case of the principal applicant's death or divorce, the dependents can obtain permanent resident status assuming all conditions, such as job-creation, are met.

Not at all. Since under the EB-5 law, an EB-5 project located in the Targeted Employment Area (TEA) or Rural Area (RA) legally requires only $500,000 rather than the $1 Million USD required in the regular EB-5 project, there are no advantages and disadvantages resulting from the investment amount.

No, EB-5 law does not allow corporations or companies to apply because permanent status can only be given to individuals. Also, the money cannot come from a corporation or company, even though the individual may be the 100% shareholder in the company.

If you are the principal investor and applicant, and then you abandon or get taken away your conditional green card status during the CPR period, then your dependents will also be deemed to have lost their conditional green cards. However, after "permanent" green cards are obtained, one family member's loss of permanent green card status has no adverse effect on the other family members' permanent green card status.

The Canadian Investor Program does not require job-creation, and either the federal program or the regional government guarantees the return of the investment, so there is less risk. However, the Canadian Investor Program requires previous management experience and additional eligibilities of the applicant and takes longer to immigrate under than the U.S. counterpart. The Canadian Investor Program also gives a permanent green card straight away.

The significance of an EB-5 project being located in a Rural Area is that the required investment amount is only $500,000 USD, not $1 Million USD. Therefore, if a particular EB-5 project is located in either TEA or Rural Area (RA), then the required investment amount is only $500,000 USD.

Rural Area (RA): An RA is a geographic area situated outside a metropolitan statistical area, or an area which is part of the outer limits of any city or town with a population of 20,000 or less. In a less densely populated state, an approved statewide probably holds both TEAs and RAs.

TEA is commonly referred to both TEA and RA interchangeably. As the Targeted Employment Area signifies, it's an area where the job-creation is more needed than other areas either because of the 150% or higher unemployment rate or because the area is a Rural Area. The problem with the projects being located in a Rural Area rather than TEA area is that it's hard to create EB-5 projects involving large companies on a continuous basis mainly because there are lack of large demand markets.

It's refers to either a rural area or a geographical area that has experienced unemployment rate of at least 150% of the national average unemployment rate. Of the 10,000 immigrant visas available for investors, 3,000 are set aside for TEA EB-5 cases. In the regulations, TEA is defined as:

A TEA is a geographic area or political subdivision set within a metropolitan statistical area OR inside a city or town with a population of more than 20,000 and an unemployment level at least 150 percent of the national unemployment rate. Governors identify and designate TEAs within a state (except the District of Columbia , where the mayor makes the designation). A typically seeks to include one or more TEAs, which within a large city are those delineated census track areas, identified according to measured population unemployment rates within these locations.

The significance of TEA is that only $500,000 USD investment is required instead of $1 Million USD investment.

That is true only where the subject child wishes to immigrate as a dependent child of the principal alien investor. However, if the child wishes to apply as the principal alien investor, then it does not matter whether the child exceeds 21 years of age.

It stands for Employment-based 5th category. Under the U.S. immigration law, there are five different categories of immigrating through employment-based avenues, and since EB-5 deals with employment-creation, it's been designated as the 5th category of Employment-based methods of immigrating. EB-5 is also commonly referred to as Investor Green Card or Investment Green Card.

No, under the EB-5 law, an individual investor can individually invest in only for-profit entity, such as a for-profit limited partnership entity. In the context of a regional center EB-5 project, however, an individual investor (usually along with numerous other individual investors) may invest in a for-profit limited partnership enterprise, which in turn can loan the money to a non-profit entity, such as a quasi-governmental development agency, creating jobs.

The answer depends on whether the investor has participated in a Regional Center project or Direct Individual EB-5 case. Although there is no specific legal provision on point, it is understood that for Regional Center project, an investor (who acts as a limited partner in a Limited Partnership) or his family members do not need to live in the same area of the Regional Center EB-5 project. But in the latter case, where the investor is taking part in the day-to-day management of the business, the investor will probably have to live in the same geographic area.

You can go to the "Easy as EB-5" section in this site, which has been specifically created for laymen who wish to obtain solid understanding of EB-5 law and requirements. You can click: www.eb-5center.com/easy_eb-5.

Yes, Regional Center and Targeted Employment Area (or Rural Area) are two different concepts. The following four types can result from an interplay between these two concepts: 1. Regional Center and TEA/RA project -- that is a project in which 10 positions can be created indirectly and also requires only $500,000 USD investment instead of $1 Million USD investment. 2. TEA/RA project that is not a regional center -- that is the project requires only $500,000 USD investment but requires Direct job-creation of 10 new positions. 3. A Regional Center project that is not TEA/RA -- that is $1 Million USD investment is required but the requisite jobs can be created Indirectly. 4. A project that is neither Regional Center nor TEA/RA -- that is $1 Million USD investment is required and the requisite jobs must be created Directly. Obviously a good project that falls within the Type 1 category is the best from an EB-5 investor's point of view.

Practically speaking, it is often true, for the following reasons: 1. Direct EB-5 case requires the creation of requisite jobs directly. This means the business has to create ten new (not existing) jobs directly. This is easier said than done. 2. Often, businesses set up are very sensitive to economy, and enough positions may not be created. 3. Often the required jobs may not be created by the time I-829 is adjudicated, since if it involves a new business that is often a small business. For the above reasons, many people are choosing Regional Center Program over regular, direct EB-5 case.

Yes, in theory and practice. For example, there are several EB-5 Programs in Washington state and Washington, DC geographic areas. However, the same kind of regional center in the same area will probably not be allowed, since it will cause too much confusion and will impede the goals of the Regional Center Program.

No, USCIS recently made it clear through an official statement that this kind of arrangement will not be allowed. The released statement reads:

If your clients have pending I-526s at a USCIS Service Center or have had approved I-526s returned by NVC that contain subscription agreements that promise to return their investment if their I-829 is denied then the subscription agreement needs to be amended. That wording has been deemed to constitute a redemption agreement and such an agreement is prohibited.

The above statement makes it clear that such provision will be deemed to constitute a redemption agreement and will be prohibited.

As of January 29, 2009, there are around 30 designated Regional Centers which have been approved by USCIS to put together EB-5 projects which comply with the parameters of their approved Regional Center. Note however that many of the Regional Centers are relatively new, and many of them have scant track records, and some have not even completed a successful project, let alone have any records of successful I-829 conditions removal cases. Therefore, selecting a suitable regional center and a suitable EB-5 project, in itself is an important and difficult task to a layman. Of course, our opinion is a smart and practical layman might do a better job than a lazy and dumb professional any day (see what happened to the Wall Street), but a helping hand of an experienced and capable professional in the U.S. immigration field will probably help. Just like cars, there are better known car companies and lesser-known car companies; but a lesser-known car company does not mean its car is not suitable for you or vice-versa. However, having said this, cars and regional center programs are not the same types of products.

Yes, under the U.S. immigration law, a conditional permanent resident has the same rights and obligations as the "permanent" resident. See below regulation. Sec. 216.1 Definition of conditional permanent resident. A conditional permanent resident is an alien who has been lawfully admitted for permanent residence within the meaning of section 101(a)(20) of the Act, except that a conditional permanent resident is also subject to the conditions and responsibilities set forth in section 216 or 216A of the Act, whichever is applicable, and § 216 of this chapter. Unless otherwise specified, the rights, privileges, responsibilities and duties which apply to all other lawful permanent residents apply equally to conditional permanent residents, including but not limited to the right to apply for naturalization (if otherwise eligible), the right to file petitions on behalf of qualifying relatives, the privilege of residing permanently in the United States as an immigrant in accordance with the immigration laws, such status not having changed; the duty to register with the Selective Service System, when required; and the responsibility for complying with all laws and regulations of the United States. All references within this chapter to lawful permanent residents apply equally to conditional permanent residents, unless otherwise specified. The conditions of section 216 of the Act shall not apply to lawful permanent resident status based on a self-petitioning relationship under section 204(a)(1)(A)(iii) , 204(a)(1)(A)(iv) , 204(a)(1)(B)(ii) , or 204(a)(1)(B)(iii) of the Act or based on eligibility as the derivative child of a self-petitioning spouse under section 204(a)(1)(A)(iii) or 204(a)(1)(B)(ii) of the Act, regardless of the date on which the marriage to the abusive citizen or lawful permanent resident occurred. (Amended 5/23/94; 59 FR 26587 ) (Amended 3/26/96; 61 FR 13061 )

Yes, an applicant is required to first go through the conditional residence status when the alien applies for green card based on his or her marriage to a U.S. citizen. For example, if an alien marries a U.S. citizen in May 2009 and interviews for immigrant visa let's say in December 2009, the alien will be given conditional residence status. Just like EB-5 category, the alien will have to apply for "permanent" residence status or often referred to as "conditions removal" 21 ~ 24 months after the acquisition of conditional permanent residence (CPR) status. The CPR status in context of EB-5 case is necessitated by the real world constraints that the applicant show that his or her investment has been maintained for some time and also necessary job-creation has taken place. USCIS is justifiably trying to prevent a situation where an applicant invests and then pulls out the investment right after obtaining green card.