USCIS Releases Draft Memo on EB5 Job Creation and Investment Requirements

On August 10, 2015, the U.S. Citizenship and Immigration Services (USCIS) released a draft memorandum regarding certain legal requirements for the employment-based, fifth preference (EB5) immigrant investor category. The memo specifically addresses two key EB5 requirements: job creation and sustaining the EB5 investment over the two-year period after initial conditional approval of the green card. The draft memo also addresses how a material change in an EB5 project may impact a corresponding EB5 case, depending upon the circumstances. As this is a draft memorandum, the USCIS is accepting comments from the public on the memo through September 8, 2015.

Overview of EB5 Requirements

Under the EB5 investor program, a foreign national may apply to become a permanent resident of the United States (commonly, “green card” holder) based upon an investment of $1,000,000 in a U.S. commercial enterprise, or a $500,000 investment, if the enterprise is in a targeted employment area (TEA). The investment must create at least ten full-time jobs for U.S. workers. But, if the EB5 investment is made in a regional center, the job creation requirement can be met by showing the creation of indirect jobs, rather than solely through direct hires of the EB5 investment vehicle.

If the initial immigrant petition by alien entrepreneur (form I-526) is approved, the immigrant investor is allowed to apply for a conditional green card valid for two years. Near the end of that two-year period, the investor must then file form I-829 to apply to remove the conditions and receive a permanent green card. In order for the I-829 to be approved, the investor must show compliance with the EB5 program requirements during the two-year conditional residence period.

Job Creation Requirement

One of the fundamental requirements for the EB5 criteria is that the investment must create at least ten full-time jobs for U.S. workers. This requirement is addressed when filing of the I-526 application by submitting official documentation of employees who have already been hired. If the required employees will be hired in the future, the applicant must submit a detailed business plan establishing how the business will support the ten required workers.

After the two-year conditional residence period, the applicant must submit documentation with the I-829, proving that the ten full-time jobs have been created, or can be expected to be created, within a “reasonable period of time.” Typical documentation includes I-9 forms, employee tax records, and related documents.

Counting the Two-Year Conditional Period: Retrogression Issues

Current USCIS policy holds that the two-year conditional residence period begins six months after approval of the I-526. The USCIS explains that this period was chosen based on the average processing times for an EB5 green card application following approval of the I-526. In the memo, however, the USCIS acknowledges that EB5 green card processing times will sharply increase due to visa retrogression. Yet, the USCIS expressly declines to alter the six-month rule for the start of the two-year conditional residence period. Per the draft memo, the justification for this position is that the “… USCIS cannot predict when and to what extent visa retrogression will occur, or whether visa retrogression will have any significant adverse effect on the ability of EB5 petitioners to demonstrate continued eligibility.”

Guidelines for Deciding EB5 Removal of Conditions on Job Creation

As explained above, when the I-829 form is filed to “remove the conditions” on the green card, the USCIS determines whether ten full-time jobs have been created, or can be expected to be created within a reasonable period of time. In the memo, the USCIS restates and clarifies its policies in this regard.

Jobs Need Not Remain in Existence When I-829 is Decided

The memo makes it clear that, if the EB5 business created the ten full-time jobs required by the EB5 category, the positions need not still be in existence at the time that the I-829 application is decided. Rather, the applicant must show only that the jobs were created, and were “considered to be permanent jobs” when they were created. The EB5 classification does not allow jobs to be considered if they are “intermittent, temporary, seasonal, or transient in nature.” However, per the memo, jobs that are “expected to last for at least two years” will generally be considered “permanent.” Thus, jobs for construction laborers on a project expected to last for several years can be used to meet the EB5 job-creation requirement. Likewise, the memo instructs that jobs in industries that are, by their nature, seasonal or intermittent, such as construction or tourism, may be considered for purposes of meeting this requirement.

Job Creation Requirement Focuses on the Position

The memo also reaffirms the USCIS policy that the new job requirement focuses on the position, not on the employee. The fact that more than one individual may fill a particular position does not mean that it cannot be counted toward the ten-job requirement. For example, a project requiring ten full-time construction laborers could still meet the EB5 requirements, even if different people filled some of those positions on different days.

Definition of a “Reasonable Period of Time”

If the required jobs have not been created at the time that the I-829 is decided, the USCIS may also consider jobs that will be created “within a reasonable period of time.” The USCIS clarifies in the memo that it will continue to consider the three-year period after an applicant is admitted to the United States as a conditional resident, or after adjustment of status to conditional residence, to be a reasonable period of time. Jobs expected to be created beyond this time period normally will not be considered.

Sustainment of the Investment during the Two-Year Period

When filing the I-829, the investor must prove that the required amount has actually been invested into the commercial enterprise, or that the individual is actively in the process of making the investment. According to the memo, the investor must also show that s/he 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.”

Must Remain in the Same Commercial Enterprise

The memo clarifies that the required investment must remain in the “single, new commercial enterprise” throughout the two-year conditional residence period. The funds must remain in the same enterprise throughout the entire period. In other words, the investment cannot be allocated among different, unrelated enterprises.

The Investment Must Remain “At Risk” for the Two-Year Period

The EB5 classification requires that the funds invested remain “at risk” during the two-year conditional residence period; in short, there must be a “risk of loss and a chance of gain.” During the processing of the initial I-526 petition, it is sufficient that the investment be placed in an escrow account, pending a decision on the I-526 and conditional green card approval. However, the memo clarifies that, during the processing of the I-829 application, the USCIS will require proof that the escrowed funds have been released and placed at risk during the two-year conditional period.

The draft memorandum notes that the investor can receive a return on the investment (i.e. receive a distribution of profits) as long as the return is not part of the initial investment and was not guaranteed. Also, the memo states that if the all of the invested funds were lost as a result of the investment, the I-829 can still be approved, if the investor can demonstrate that the full amount of the required capital was invested in the enterprise and lost as a direct result of the investment.

Material Change in the Investment

Finally, the memo addresses the possibility that visa retrogression may result in long delays for some applicants between the time of filing the I-526 and eligibility for a grant of conditional permanent residence. The conditions or structure of the qualifying EB5 investment may change unavoidably during this extended waiting time. The memo addresses two variations of this possibility.

Investors who Have Not Received Permanent Residence

The memo restates earlier USCIS guidance in this regard – changes that are considered material that occur after filing the I-526 will result in ineligibility for the applicant if s/he has not received conditional permanent residence. A new I-526 must be filed in this situation to reflect the changed conditions. A material change that occurs after the I-526 is approved, but before the applicant receives conditional permanent residence, will constitute grounds for revoking the approved I-526. A change is considered material if it would have a tendency to influence the USCIS decision on the I-526.

The USCIS notes, however, that “changes that occur in accordance with a petitioner’s business plan as filed” normally will not be considered material. For example, if no jobs have been created at the time the I-526 is filed, but the business plan predicts the creation of ten jobs, the actual creation of the predicted jobs before the I-526 approval will not be considered material.

It would not be acceptable to allocate investment proceeds to a project that is different from the job-creating project set out in the I-526. This type of change will lead to denial of the I-526. However, if the funds actually were applied to the original project, and the required jobs created, the enterprise could reassign the funds to a different project after completion of the original project. As long as the investment is still at risk, this is acceptable and will not prompt denial of the application.

Investors who Have Already Obtained Conditional Permanent Residence

The memo restates USCIS position that the conditions still may be removed if there have been material changes after the grant of conditional permanent residence. The requirements are that the original I-526 was filed in good faith and with an intention to follow through with the business plan presented in that application. If the USCIS concludes that the I-526 was not filed in good faith, then the I-829 may be denied, and the applicant’s permanent residence may be terminated.


The memorandum provides important guidance regarding the EB5 program, in a time when visa retrogression is resulting in increased delays for a large percentage of EB5 applicants. Those interested in learning more about the EB5 program are encouraged to contact the Murthy Law Firm to reach an attorney experienced in EB5 matters by eMailing


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Disclaimer: The information provided here is of a general nature and may not apply to any specific or particular circumstance. It is not to be construed as legal advice nor presumed indefinitely up to date.