Overview of the EB5 Immigrant Investor Category

The employment-based, fifth preference (EB5) immigrant investor program provides an avenue for foreign nationals to become U.S. permanent residents (“green card” holders) based on a qualifying investment in a U.S. commercial enterprise. This category, established in 1990, was once underutilized, but has become a popular option in recent years, in part due to over-subscription in other employment-based categories. The program was significantly reformed by the EB5 Reform and Integrity Act of 2022 (RIA), which updated investment thresholds, revised the targeted employment area (TEA) designation process, and introduced new integrity and oversight measures.

Overview of EB5 Requirements

Under the EB5 investor program, a foreign national may apply for a green card based upon an investment of at least $1,050,000 placed at-risk in a U.S. commercial enterprise. The minimum investment is reduced to $800,000 if the enterprise is located in a targeted employment area (TEA). A TEA is a rural area or an area with high unemployment. Under the RIA, TEA designations are now made by USCIS rather than by individual states, as was the practice under the prior framework.

Job creation is a key goal of the investor visa program. At least ten new full-time jobs for U.S. workers must be created by the business investment. If made through a designated regional center, however, the EB5 requirement for job creation can be met by showing the creation of indirect and induced jobs, in addition to direct jobs. A regional center is defined as an “economic entity … involved with the promotion of economic growth, improved regional productivity, job creation, and increased domestic capital investment.” Regional centers pool investors’ capital and apply the funds toward projects to improve the economy in the approved area. Regional centers may directly own and operate businesses utilizing the invested capital, or they may loan money to projects operated by other entities.

EB5 Application: Three-Step Process

The EB5 process consists of three steps. First, an immigrant investor petition is filed, either Form I-526E for regional center investments or Form I-526 for direct investments. Once this is approved, the immigrant investor either applies for an immigrant visa at a U.S. embassy or consulate or, if in the United States, may file an application to adjust status (Form I-485). In certain cases, when a visa number is immediately available, the Form I-485 may be filed concurrently with the immigrant investor petition. The green card generally is issued with a validity period of two years. Toward the end of this two-year period, the final stage involves filing a petition to remove conditions (Form I-829).

Step One: Form I-526E / I-526

Before filing the immigrant investor petition, the investor generally must either invest the funds in the commercial enterprise, or else commit the funds for investment by placing them in escrow; placing the investment funds in escrow will only suffice, however, if the escrowed funds are scheduled to be released automatically and irrevocably to the commercial enterprise, contingent upon approval of the petition and issuance of an immigrant visa or approval of an I-485 application.

The immigrant investor petition must be accompanied by supporting evidence regarding the commercial enterprise, the enterprise’s projected capacity to create ten full-time positions for U.S. workers, and the investor’s role in the management of the enterprise. If the investment is made through a regional center, however, the EB5 investor is not required to be involved in the day-to-day management of the enterprise.

The petition also must provide evidence of the source of the investment funds. The investor must be able to demonstrate that the money was obtained lawfully and that the full minimum investment amount belongs to the individual investor. Each investor must independently satisfy the investment threshold; however, in the regional center context, individual investments commonly are pooled together to fund larger projects. Funds that are obtained lawfully as a gift can also be used to meet the EB5 investment requirement.

Step Two: Consular Processing or Adjustment of Status

Once the immigrant investor petition is approved, and assuming the priority date is current, the immigrant investor, along with the investor’s spouse and children under the age of twenty-one, may apply for conditional green cards valid for two years. If the immigrant investor filed for adjustment of status concurrently, then the adjustment of status applications for each family member will be processed separately.

Step Three: Form I-829

As mentioned, the EB5 applicant receives a conditional green card valid for two years. In order to remove these conditions, approximately 90 days before the conditional green card is scheduled to expire, Form I-829 must be filed. The I-829 must be accompanied by evidence that the investment funds have remained in the project and that the requisite ten jobs were created. Once approved, the immigrant investor will receive a permanent, unconditional green card.

Conclusion

The EB5 immigrant investor program can be quite complex and has a number of rigid requirements. But it can provide an excellent path to obtaining a green card, especially for those facing extensive backlogs in one of the oversubscribed employment or family-based immigrant visa categories. Readers who would like to pursue an EB5 case or learn more about the program are encouraged to schedule a consultation or contact a Murthy Law Firm attorney at EB5@murthy.com.

Originally posted 01.Jun.2016, this MurthyDotCom article has been updated to reflect changes introduced by the EB5 Reform and Integrity Act of 2022. While some aspects of immigration have changed significantly in the years since MurthyDotCom began publishing articles in 1994, much remains relevant. Murthy Law Firm clients and visitors to MurthyDotCom often are referred to articles, like this one, which has been updated for our readers.

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