Here is what interested investors need to know about the EB-5 Visa Program requirements for receiving I-526 Petition approval.
The I-526 Immigrant Petition by Alien Entrepreneur is the first EB-5 application a foreign national files to USCIS. This petition is for investors who wish to immigrate to the U.S. Once approved, an EB-5 investor becomes eligible to receive a visa when one becomes available.
Reading about the I-526 Petition requirements is a great way to learn about how the EB-5 Program works and if it’s right for you and your family.
To obtain I-526 Petition approval, a qualified foreign national must take several steps after the initial step of finding an experienced EB-5 immigration attorney to file the petition on their behalf. The next EB-5 Visa Program requirements for I-526 Petition approval include:
1. Determining which program is right for you.
There are two different program paths an investor can take. The first path is the older of the two programs. The EB-5 Direct Program was created by Congress in 1990, as a way to stimulate the U.S. economy through foreign capital investment and direct job creation. Later, in 1992, Congress created the EB-5 Regional Center Pilot Program as a way to further stimulate the US economy.
The first program is for investors who want more control over their EB-5 project. These EB-5 investors must be credited with the creation of direct jobs.
The latter program, the Regional Center Program, allows USCIS designated regional centers (public or private organizations involved in economic growth) to sponsor investments for EB-5 applicants. Regional Centers have the unique advantage over the Direct Investment Program of being able count indirect and induced job creation as well as direct job creation.
2. Selecting a qualified project (in a regional center).
The next step is to select a qualified EB-5 project or new commercial enterprise (NCE). There are several factors to consider when selecting an EB-5 project. Here are multiple factors to consider to help investors conduct due diligence into both the project and the regional center.
-Evaluate the project and regional center team’s reputation and history of I-526 approval, I-829 approval and investment pay-back. Avoid any projects/regional centers that do not mention the EB-5 requirement that the investment must be “at-risk.”
-Determine if the project qualifies as a targeted employment area (TEA) under the new EB-5 rules. Projects in TEA designated areas qualify for the new lower investment rate of $900,000. A non-TEA project’s investment rate is $1.8 million.
-How effective is the regional center’s job creation methodology? Do they have a job creation buffer to ensure that all their EB-5 investors will create the requisite number of jobs?
-How does EB-5 capital fit into the regional center project’s capital stack? Does the project have a senior bridge loan? Where are the different sources of funding coming from?
-EB-5 capital must remain at risk. EB-5 investors cannot receive any guarantees that they will get their money back, but there are several ways a regional center can minimize an investor’s risk. Additionally, what is the project’s exit-strategy?
-Have you visited the site of the EB-5 project? Have you investigated the economic impact the project would have on the local economy? Is there demand for the project?
Does the Regional Center have all their documents ready for you to submit along with your I-526 petition? Is the Regional Center working with your EB-5 immigration attorney in a timely manner?
3. Investing the minimum amount required.
Under the new EB-5 Modernization Regulation, which went into effect last month on November 21, 2019, the minimum investment amounts have increased. A project located in a targeted employment area (TEA) may qualify for the $900,000 rate. A non-TEA project’s investment rate is now $1.8 million. The majority of regional centers sponsor projects located in designated TEA in order to qualify for the lower investment rate of $900,000.
Once an investor has selected an EB-5 project they must then invest the minimum amount required into an EB-5 escrow account prior to filing their I-526 Petition. The I-526 must show evidence that the petitioner made the irrevocable investment commitment. This capital must be placed “at-risk” into the new commercial enterprise or project for the purpose of job creation.
Note: Each EB-5 principal investor can include their spouse and all their unmarried children under the age of twenty-one on their application. If approved, each individual will receive their own visa.
4. Proving that the capital invested came from lawful sources.
Investors must submit evidence along with their I-526 petition showing that any capital invested came from lawful sources. Lawful sources can include sale of assets, employment income, investment earnings, inheritance, gifts, loans, business disbursements, or other lawful sources.
5. Showing sufficient involvement in the new commercial enterprise.
Investors who intend to manage the day-to-day operations of their investment will want to invest in the EB-5 Direct Investment Program. Investors who do not wish to be involved in the day-to-day management of their investment will want to invest in a regional center project where they can elect a policy-making position to fulfill the EB-5 Regional Center Program’s involvement requirements.
6. Creating or saving 10 full time jobs for U.S. workers.
Each EB-5 investor must create or save 10 full time jobs for qualified U.S. workers. If 5 EB-5 investors have invested in an EB-5 project, a minimum of 50 full-time jobs for U.S. workers must be created by the project in order for those investors to qualify to remove the conditions on their green cards at the I-829 Petition stage. At the time of filing the I-526 Petition, a project business plan may need to be submitted to show the project’s plan for hiring and creating the required number of jobs along with when the positions are expected to be filled.
With the Direct Investment Program, investors must be credited with the creation of 10 full-time direct jobs. Direct jobs are usually W-2 employees.
With the Regional Center Program, investors can count indirect and induced job creation in addition to direct job creation for fulfilling job creation requirements. Indirect jobs are jobs created as a result of the project spending money on vendors and service providers. Induced jobs are created as a result of the EB-5 project’s workers spending money within the local community.
In some cases, if an investor invests in a troubled business, jobs may be saved instead of created.
- New York
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