As a comprehensive immigration firm, we represent families, corporations, refugees, and individuals in deportation proceedings. We lead clients through recognized, although still often very challenging, paths to temporary status and U.S. permanent residence. We also have more focused experience in the relatively new practice area of investor immigration, including traditional E-2 nonimmigrant investor and EB-5 immigrant investor programs.
The temporary E-2 visa does not lead directly to permanent residence. Because EB-5 requirements are so difficult to meet, the vast majority of EB-5 petitions are being filed through EB-5 regional centers, which are established entities to promote regional economic growth and job creation. Through these regional centers, foreign investors are able to meet the difficult EB-5 job creation requirement based on indirect job creation without having to be involved in managing a U.S. business.
Our approach to EB-5 cases is different. We work directly with E-2 investors who develop their own businesses to meet higher EB-5 capital investment and job creation requirements. Having already run their own business, clients with E-2 visas are more comfortable pursuing EB-5 immigration through businesses they manage and control, rather than as passive investors in regional center projects.
E-1/E-2 TEMPORARY VISAS
The temporary E-2 classification is often a more realistic alternative to the EB-5 category for permanent residence that also allows for self-employment and long-term stays in the U.S. Both the E-2 treaty investor and related E-1 treaty trader visas require a treaty of Freedom, Commerce, and Navigation (FCN) or bilateral investment treaty (BIT) between the U.S. and the applicant’s country that are intended to facilitate economic and commercial interaction between the United States and the treaty country.
E-1/E-2 visa applicants must meet certain requirements, including:
- Nationality: applicants must possess the nationality of the treaty country.
- Substantial trade or investment: E-1 applicants must carry on substantial trade in services or technology between the U.S. and the applicant’s foreign state. E-2 applicants must invest a substantial amount of capital that is placed at risk with the objective of generating a profit.
- Proportionality: the proportionality test for E-2 visas compares the amount of qualifying funds invested and the cost of creating the type of business. The test considers the percentage or amount of funds required for establishing the appropriate investment level.
- Marginality. The marginality test means the investment must have the capacity to be more than marginal, either by generating more than enough income to support the investor and his or her family, or by making a significant economic impact through job creation for U.S. workers.
- Develop and direct: investors must have the ability to control the enterprise through majority ownership.
EB-5 IMMIGRANT INVESTORS
Congress established the EB-5 program in 1990 to attract foreign investment capital and create jobs for U.S. workers. EB-5 visas have been underused because the statutory requirements are so difficult to meet. The popularity of the program has been growly lately in part because the financial crisis has made it harder for U.S. investors to get loans from commercial banks and foreign nationals accumulating their wealth abroad want permanent residence in the U.S. and have funds to invest. EB-5 regional centers allow foreign investors to get visas without having to get involved in the U.S. business, but investors need to be cautious in pursuing this immigration strategy. Some regional centers and investment brokers have been known to play down risky investments or misrepresent how the program works. Investments that fail or don’t create the required number of jobs leave investors without money or a green card.
Our firm has successfully represented a number of immigrant investors in getting green cards through EB-5 petitions. These clients usually already have temporary E-2 investor visas. Their immigrant investor petitions are based on their own U.S. businesses.
U.S. immigration law makes up to 10,000 visas available each year to those who invest in a new commercial enterprise that employs at least 10 full-time qualifying U.S. workers. The EB-5 program is based on: (1) the immigrant’s investment of capital, (2) in a new commercial enterprise, (3) that creates jobs.
- New commercial enterprise: To qualify as new, the enterprise must be formed after November 29, 1990. A business formed before this date can still qualify as new if the investor restructures or expands an existing business.
- Management: The investor must be engaged in the management of the investment, as opposed to having a purely passive role.
- Capital: The word capital is defined as cash, cash equivalents, equipment, inventory, and other tangible property. Capital doesn’t include loans, unless the investor is personally and primarily liable and the loan isn’t secured by assets of the investor’s business.
- Invest: The investor must place his or her capital at risk for the purpose of generating a return. There must be a risk of loss and a chance for gain. If more than one investor is involved, investors allocate the number of jobs created among one or more investors seeking permanent residence, and each petitioner must have personally invested the required amount.
- Amount of capital: The usual amount of the investment is $1 million, but it’s adjusted to $500,000 if the new commercial enterprise creates jobs in a targeted employment area, which is defined as a rural area or an area with unemployment of at least 150 percent of the national average. To qualify as a targeted employment area, the investor must submit evidence that the MSA or specific country has experienced an average unemployment rate of 150% of the national average or a letter from the state certifying that the area has been designated as a high unemployment area.
- Lawful Means: You can’t use drug proceeds. The investor needs to show the lawful origin of the funds being invested through business registration, tax returns, and judgments going back 15 years.
- Job creation: An EB-5 investment must create full-time jobs for at least 10 U.S. citizens, permanent residents, or other immigrants authorized to be employed. The investor, the investor’s spouse, and the investor’s children don’t count toward the 10 jobs. Non-immigrants also don’t count. Jobs don’t need to exist at the time of the investment, since the petition can be supported by a comprehensive business plan that shows a need for at least 10 employees within 2 years. For a troubled business, saving jobs count as job creation.
The petitioner files for EB-5 classification with evidence that the investment was made in a qualified commercial enterprise, the required amount of capital was placed at risk, the capital was legally acquired, and the new enterprise will create at least 10 full-time positions for qualified employees. With an approved EB-5 petition, the investor then files to become a conditional resident, a status that lasts for two years. The investor needs to file another application to remove the conditions during the initial two-year period of residence. At this stage, USCIS needs concrete proof of job creation. To remove conditions on permanent residence, the investor needs to show again that he or she invested the required capital, sustained the investment during the conditional period, and created 10 full-time jobs for qualifying U.S. workers. Failure to file for removal of the conditional status or denial of the petition to remove condition leads both to automatic termination of conditional resident status and deportation proceedings.
Gaining permanent residence through the EB-5 program is a long process that is full of potential challenges. It’s hard enough to get an EB-5 petition approved, but that’s only the beginning. The investor needs to sustain the business. The process of removing conditions is intended only to deter fraud, but it has turned into a re-adjudication of the initial EB-5 filing. Our firm has the experience to anticipate and address challenges throughout the process of gaining EB-5 approval and later removing conditions in order to help investor clients achieve their long-term immigration objectives.