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USA Investor Residence Government Policy

USA Investor Residence

USA Investor Residence

EB-5 Immigrant Investor (USA Investor Residence)

The Employment-Based Fifth Preference Visa (EB-5) was created by the US Congress in 1990 to boost the US economy by allowing foreign investors to make capital investments and create jobs in the United States. The Immigrant Investor Program is administered by the US Citizenship and Immigration Services.

New Commercial Enterprise

An EB-5 investor (USA Investor Residence) must invest in a new commercial enterprise.

A new commercial enterprise is defined as

  1. An enterprise established after Nov. 29, 1990, or
  2. An enterprise established before Nov. 29, 1990 that fulfils either condition given below:
    1. The enterprise is purchased by the investor and subsequently restructured or reorganized in such a way that a new commercial enterprise results, or
    2. The enterprise is expanded by the investment in such a way that results in a minimum 40% increase in the net worth of the business or the number of employees.

Commercial Enterprise

Commercial enterprise refers to a for-profit activity established for ongoing performance of lawful business.

The definition of commercial enterprise includes but is not limited to:

  1. Sole proprietorship
  2. Limited or general Partnership
  3. Holding company
  4. Holding company and its wholly-owned subsidiaries with each subsidiary being a commercial enterprise as defined above.
  5. Joint venture
  6. Corporation
  7. Public or privately owned business trust or other entity

Non-commercial activity like owning or operating a personal residential premise is not a commercial enterprise.

USA Investor Residence: Minimum Qualifying Investment

General : $1 million.

Targeted Employment Area (High Unemployment or Rural Area)  : $500,000.

Job Creation

Job Creation

The investor must:

  1. Within a period of two years of admission into the United States as a Conditional Permanent Resident (or within a reasonable extension after two years under certain circumstances), the investor must create or preserve a minimum of 10 direct or indirect full-time jobs for qualifying US workers.
  2. Definitions concerning the creation or preservation of direct or indirect jobs
    1. Direct Jobs
      • Actual identifiable jobs for qualifying employees within the commercial enterprise in which capital has been directly invested by the investor
    2. Indirect Jobs
      • Jobs created collaterally or resulting from capital that has been invested by the investor in a commercial enterprise. For indirect jobs to be used in the calculation, affiliation with a regional center is

Preservation of jobs can be included in the calculation only if the commercial enterprise is a troubled business.

Definition of a Troubled Business

Definition of a Troubled Business

 

A troubled business is one that fulfils the conditions below.

  1. In existence for at least two years, and
  2. Suffered a net loss of value of at least 20% of the net worth of the business before the loss took place, and,
  3. Aforesaid loss occurred during the 12-month or 24-month period before the priority date on the investor’s form

For purpose of computation of period of existence, successors in interest of the business will be deemed to have been in existence for the same time period as the business they succeeded.

Definition of a Qualified Employee

  1. A US citizen, permanent resident or immigrant authorized to work in the USA, or
  2. A conditional resident, asylum seeker, refugee or person living in the USA under suspension of deportation.

This definition does not include

  1. Immigrant an investor or his or her spouse, sons, or daughters, or
  2. Foreign nationals holding non-immigrant status, or
  3. Foreign nationals not authorized to work in the USA.

Definition of Full Time Employment

Employment of qualifying employee in a position that requires a minimum of 35 working hours per week

A job-sharing arrangement involving sharing of a full-time position by two or more qualifying employees will be appropriate if the requirement regarding hours per week is fulfilled. The employees must be permanent and must share associated benefits like workman’s compensation, unemployment premiums and other benefits normally related to full-time and permanent positions.

The position must be full-time, permanent, and constant.

Part-time or full-time equivalent positions do not qualify even if the requirements concerning hours per week are met.

Capital Investment Requirements

Capital Investment Requirements

Capital means

  1. Cash and Cash Equivalents
  2. Debts secured by personal assets owned by the investor and if assets of the new commercial enterprise are not used to secure the debt.
  3. Equipment
  4. Inventory
  5. Other tangible property

Assets that have been directly or indirectly acquired by unlawful means will not be considered as capital.

Capital shall be valued at fair-market value in US dollars.

Investment capital cannot be borrowed.

Definition of Targeted Employment Area

Definition of Targeted Employment Area

An area that fulfils either of the following conditions at the time of investment:

  1. Rural area i.e. any area outside:
    1. A metropolitan statistical area as defined by the Office of Management and Budget, or
    2. The boundary of any city or town with a population of 20,000 or more according to the decennial census.
  2. Area with an unemployment rate at least 150% of the national average.

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