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Monday, 12 February 2018 12:08

EB-5 Status As of February 12, 2018

It looks like we could be about to experience some movement on the immigration debate in the United States Senate.

The status of the EB-5 program remains unchanged with the passing of a continuing resolution that extends the program (along with many other federal programs) until March 23, 2018. The status of the program beyond that point remains uncertain.

However, Congress will be addressing proposed immigration reform this week as Senate Majority Leader Mitch McConnell (R-KY) will open debate on H.R. 2579 (Broader Options for Americans Act) on the Senate floor this afternoon (February 12, 2018).

Although the bill deals primarily with healthcare matters, “the measure is expected to be the vehicle for immigration legislation” during the period of open debate.

As usual, it is too early to speculate what might transpire, although DACA and other immigration concerns will likely hold the most general attention from the media and the public.

There are generally two potential areas considered ripe for change. The first is the minimum investment amount for EB-5 Investment Immigration Visa petitioners. The second is the status of the Regional Center Program in which investments are aggregated into a single fund as a new commercial enterprise and become part of the funding stack for multi-million-dollar projects.

A change to the minimum investment would affect both the direct and indirect investments. Changes to the Regional Center program could affect petitioners who are already at points in the process. It is likely that the definition of Targeted Employment Areas will be addressed as well.

The highly-publicized DACA protections end on March 5, 2018, so the matter of addressing the virtual plethora of long-standing immigration issues seems, at long last, to have a deadline. Some observers believe that lawmakers want to get the entire matter resolved in one fell swoop. Should this not be accomplished, we are likely to see another omnibus bill extending funding for the EB-5 program through the end of the current fiscal year (September 30, 2018).

On a final note, there may be an unexpected boon for EB-5 investors. If Congress should eliminate the Diversity Visa program and maintain the same total number of visas, 50,000 will become available. It is possible that some of these could be allocated to EB-5 investors.

Whatever changes are made – if any – would be implemented with an effective date at least 60 to 90 days after signed into law by the President.

While the outcome remains uncertain, Americans and foreign national investors, have a reasonable expectation of some resolution.

Published in EB-5 program

The EB-5 entrepreneurial business visa was introduced in 1990 for the express purpose of stimulating the U.S. economy by using private foreign investments as capital expenditures to create jobs.

The EB-5 Direct Investor Visa program is still in effect and is not in danger of being eliminated. Should the U.S. Congress fail to extend the EB-5 Regional Center program, the Direct Investor program will remain.

Direct investors are required to:

  • Invest USD 1 million that was proven to be lawfully sourced.
    • Or, alternatively, invest USD 500,000 in a lawfully designated Target Employment Area (TEA). A TEA was defined primarily as a rural area or an existing area where the jobless rate was 50% higher than the national average.
  • Invest in a new commercial enterprise that creates 10 new, full-time jobs.
  • Have their funds entirely at risk (just as any business owner would).
  • Be involved in the management of the enterprise.

This is the second in a series of articles that will address and clarify the EB-5 Direct Investor Visa program. Our previous article explained “new commercial enterprise.”

What Are the Job Creation Requirements for EB-5 Direct Investors?

Simply stated, the job creation requirement is the same for both Direct and Indirect EB-5 Investors. While Indirect Investors participate in the Regional Center Program in which their funds are pooled to provide funds for major, multi-million dollar projects, 10 new jobs must be created per investor. That rule is the same for the original EB-5 Direct Investor Visa program. Each individual investor must participate in funding a new commercial enterprise that creates at least10 new full-time jobs for “qualifying employees.”

The USCIS defines a qualifying employee as:

  • A U.S. citizen, or
  • A lawful permanent resident (Green Card holder), or
  • Any temporary or conditional resident who is legally authorized to work in the U.S.

The job creation requirement count may not include investor, his family, or foreign nationals working in the U.S. under an employment visa program.

Just as the investment is direct to the new commercial enterprise, so must the 10 new jobs be direct employees of the new commercial enterprise. The new job must provide for a minimum of 35 hours per week for a minimum of two years. During this two-year period the EB-5 investor and family members are granted conditional permanent residence.

Ninety days prior to the end of the two-year period, the investor may file an I-829 Petition by Entrepreneur to Remove Conditions. The investor must be able to provide evidence that the job creation requirement has been fulfilled. The investor will be expected to submit I-9 forms, payroll records, and copies of tax payments as evidence of meeting the job creation requirement.

If you have questions, we have answers. Contact us. We are here to help you.

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Published in EB-5 program
Monday, 23 October 2017 14:24

The EB-5 Dream for Direct Investors

The EB-5 entrepreneurial business visa was introduced in 1990 for the express purpose of stimulating the U.S. economy by using private foreign investments as capital expenditures to create jobs.

The EB-5 Direct Investor Visa program is still in effect and is not in danger of being eliminated. Should the U.S. Congress fail to extend the EB-5 Regional Center program, the Direct Investor program will remain.

Direct investors are required to:

  • Invest USD 1 million that was proven to be lawfully sourced.
    • Or, alternatively, invest USD 500,000 in a lawfully designated Target Employment Area (TEA). A TEA was defined primarily as a rural area or an existing area where the jobless rate was 50% higher than the national average.
  • Invest in a new commercial enterprise that creates 10 new, full-time jobs.
  • Have their funds entirely at risk (just as any business owner would).
  • Be involved in the management of the enterprise.

This is the first of a series of articles that will address and clarify the EB-5 Direct Investor Visa program.

What Is a New Commercial Enterprise?

It is important to understand how the U.S. Citizenship and Immigration Services (USCIS) defines “New Commercial Enterprise” because they USCIS must approve the business activity as part of the application process.

Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business.”

A commercial enterprise may be in the form of a sole proprietorship, a partnership, a corporation, a joint venture, a business trust, or a holding company. It may also include any other publicly or privately-owned business entity approved by the USCIS.

It is the New Commercial Enterprise that must bear the burden of creating a minimum of 10 new, full-time jobs. It is important to distinguish this factor as opposed to the common supposition that it is the Direct Investor’s responsibility. The 10-job minimum was established to help ensure that the program would have the desired economic effect.

Given an employee base that includes supervisors and managers, it is not unreasonable to assume that payroll, exclusive of ownership, would be in the area of $175,000 to $250,000. That’s enough to stimulate the economy in a small town – which is exactly what the original Direct Investment program was designed to do. We’ll discuss more about that in an upcoming article.

If you have questions, we have answers. Contact us. We are here to help you.

Published in EB-5 program

Direct Investment vs. Regional Center Investment

Published in EB-5 program

What the GAO Really Said About EB-5 Job Creation

Published in EB-5 program
Friday, 23 September 2016 07:37

EB-5 Reform: Keep the Jobs, Fix the Problems

EB-5 Reform: Keep the Jobs, Fix the Problems

Published in EB-5 program

Volunteer Opportunity for EB-5 Industry Forum Los Angeles, CA

Published in EB-5 program
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