Green Cards Through Investment Typically In Less Than A
For foreign investors looking for freedom and flexibility to live
and work in the United States in a way accommodating to their
lifestyles, the little-known EB-5 investor category can provide an
excellent opportunity to accomplish this goal through the obtaining
of Green Cards. Since this regulation first became law in 1990, EB-5
case adjudications have gone through several modifications,
withdrawals and other hiccups before implementation of the latest
statute in 2002.
There are essentially two EB-5 programs, i.e. the Regular program
and the Regional Center program. In order for an applicant to
qualify under the Regular program, the following three basic
requirements must be met: investment in a new commercial enterprise;
investment of at least $1 million (or $500,000 in certain cases)
into the business, and creation of full-time employment for at least
10 full-time U.S. workers.
Additionally, to satisfy CIS’ (formerly INS) standards of a bona
fide “new commercial enterprise,” a business can qualify in one of
three ways: investment in a business formed after November 29, 1990;
substantial restructure of business formed before November 29, 1990;
or substantial expansion of business formed after November 29, 1990.
The investment may consist of the contribution of various forms
of capital, including cash, equipment, inventory, property, and
other tangible equivalents. An investment amount of $1 million is
generally the minimum. However, $500,000 is acceptable if the
business is situated in a “targeted” employment area, i.e. one that
has experienced unemployment of at least 150 per cent of the
national average rate or a rural area, as designated by the U.S.
Office of Management and Budget. The final Regular program
requirement is that at least 10 full-time jobs are subsequently
created for U.S. workers.
The second program within the EB-5 category, i.e. the Regional
Center program, is ideal for the retiree or inactive investor due in
large part to the “indirect employment” feature of this program. The
Regional Center program advantageously removes the 10 employee
requirement of the Regular program and substitutes the
less-restrictive “indirect employment creation,” which allows the
investor to qualify for an EB-5 Green Card without hiring 10 people
in the company that the investor has invested in. So, a nutshell,
under a Regional Center program, the investor can qualify by
presenting evidence that 10 jobs will be created throughout the
Regional Center economy, typically supported by an economist’s
The EB-5 management requirement is minimal in that the investor
can be a limited partner and still qualify. Thus, for those who are
not interested in day-to-day management or running an active
business, Regional Center programs offer a more acceptable inactive
form of investment, than do most Regular program investments.
Another advantage of Regional Center programs that adds to the
flexibility of this Green Card category is that the investor is not
required to live in the place of investment; rather, he or she can
live wherever he/she wishes in the United States. For example, the
investor may invest in a Regional Center in the state of Washington,
but choose to live in upstate New York.
Under mandate by Congress, Regional Center EB-5 petitions are
given priority by CIS which, among other benefits,
often results in a quicker path to approval. The official CIS
definition of a Regional Center is “any economic unit, public or
private, which is involved with the promotion of economic growth,
including increased export sales, improved regional productively,
job creation, or increased domestic capital investment.” Each
Regional Center program must be pre-approved by CIS in order to be
eligible for EB-5 Green Cards. Currently, there are 3 primary CIS
approved Regional Center programs available, including:
- A real estate limited partnership program that offers an
investment in industrial properties in a specified major
city. This program, which was granted CIS designation as a
Regional Center in 1996, generally involves purchasing
low-yielding warehouse properties with invested funds and
converting them into higher-value mixed used properties,
including office space, retail shops and storage
space. Investors participate as limited partners of a limited
partnership, and can earn regular monthly income from tenant
rentals, as well as a share of future appreciation from the
project, when sold. Investment periods vary, but cannot end
before receipt of the permanent Green Card by the investor.
- A limited partnership program that makes low interest loans
to businesses in a specified major city. Business investment and
development in this program, a CIS Regional Center designee
since 2003, targets industry sectors that demonstrate strong
indications of expansion, growing employment needs, and returns
on investments. The Regional Center directs its efforts at
financing projects and developing enterprises within targeted
sectors, including hospitality and tourism, trade, technology,
higher education, and transportation. The investment period of
this program is 5 years.
- Ownership of 80-acre almond farms in a specified location in
California. The investment is used to create a business in
California that is 100% owned by the immigrant investor. The
business purchases 80 acres of land where almonds are developed,
grown and harvested for export. It also purchases raw
agricultural stock (almond trees), an irrigation system, plant
nutrients and all necessary harvesting equipment and services to
develop the land and export the harvested almonds for
profit. The investment period for this program, which received
CIS designation as a Regional Center in 2002, is 7 years.
The procedure for obtaining an EB-5 Investor Green Card is
relatively straightforward. The investor must produce 5 years of tax
returns to substantiate the source of investment funds. The funds
can be in the form of a loan or gift, which would allow a parent to
gift a son or daughter. Gift taxes, if required in the investor’s
home country, must be paid. He or she must also present evidence
that traces the capital, through bank transfers and other
documentation, from the investor directly to the enterprise. This
provision of the regulation, which requires clear evidence that the
source of funds was procured by legal means, arose from earlier
concerns of Congress over money laundering issues.
After the investor completes a thorough business and financial
due diligence analysis of the viability of the business, the
investment is made and a petition is filed by the foreign investor
with the CIS, requiring CIS to certify that the applicant and the
investment are eligible for EB-5 status. The approval of the
petition takes, on average, a mere 1-2 months.
If the investor is already in the U.S., he or she then applies
for a Green Card through CIS. No interview customarily is required,
and approval has been taking approximately 8 months. If the investor
resides abroad, an application for the Green Card is generally made
at the U.S. Embassy or Consulate of the investor’s home country;
however, in this case, for Consular processing purposes, an
interview is necessary. Approval of the Green Card in this case
takes on average about 10-11 months.
In either of the above two scenarios, in most Regional Center
cases, the entire process generally takes less than one year. This
is the situation for most applicants based on current CIS and State
Department Consular processing times.
Once CIS approves the investor’s Green Card, it is conditional
for a period of two years.
Conditional Green Card status confers the same rights as the
permanent unconditional Green Card.
Between 21-24 months after the conditional Green Card has been
approved, the investor must reconfirm that the investment has been
made or is still in place and that the employment requirement has
been fulfilled or maintained. An application to remove the
conditional Green Card status is then filed with CIS.
Once the condition has been removed, a full Green Card is granted
for indefinite permanent resident status and work permission in the
United States. From the time the conditional Green Card is approved
until approval of the removal of condition usually takes about two
and a half years. Thereafter, in approved Regional Center programs,
depending on the terms of their agreement, the investment may be
sold, and the investor will still maintain the permanent Green
Card. U.S. Citizenship is possible two and a half years later, five
years after approval of the conditional Green Card, upon
satisfaction of residence and other criteria.
In summary, freedom to live anywhere in the United States, a
passive form of investment with no required direct management
responsibilities, priority standing within the Immigration process,
and an accelerated path to Green Card procurement – all are
important factors which make the little-known EB-5 Green Card
category (and the approved Regional Center programs) an ideal
investment vehicle for the inactive investor or retiree who wishes
to live and work in the United States.
As with other U.S. Immigration visas, applicants also need to
take into account U.S. and foreign tax and other business and
personal planning considerations.