An EB-5 Investor’s Guide to Form I-526

Filing Form I-526, Immigrant Petition by Alien Investor, is a crucial juncture in the EB-5 capital investment process. This visa petition demonstrates to United States Citizenship and Immigration Services (USCIS) that a qualifying EB-5 investment has been made and that the applicant is eligible for a two-year conditional residency, which precedes the investor’s receiving a permanent Green Card from the National Visa Center. Therefore, it is essential for EB-5 investors to understand each section of the I-526 petition and compile all of the necessary evidence.

Steps To Take Before Submitting the I-526 Petition

In essence, the EB-5 Immigrant Investor Program awards Green Cards to foreign nationals who make qualifying investments in U.S. businesses—also referred to as new commercial enterprises (NCEs)—and create at least 10 jobs per investor. Before filing Form I-526, a foreign national must already have invested in an NCE. An NCE is defined as any for-profit enterprise established after November 29, 1990, and businesses in virtually any industry can qualify for EB-5 funding.

Differences Between Direct Investment and the Regional Center Program

The process of making an EB 5 investment in an NCE differs between the two investment options available to foreign nationals. In the direct investment model, the funds are invested straightaway into an NCE, which will be in charge of creating the needed jobs and is thus considered the job-creating entity (JCE) as well. In contrast, the regional center program allows economic entities known as regional centers to manage EB-5 funding across several NCEs. Regional center investors inject their capital into one of the regional center’s funds, and the NCE and JCE are typically separate.

Minimum Investment Amount

The minimum investment amount for the EB-5 program is $800,000 for projects located in targeted employment areas (TEAs); all other projects require an investment of at least $1,050,000. A TEA is either rural or has an unemployment rate 150% of the U.S. national average.

How to Prepare Form I-526

The three basic purposes of the I-526 petition are to prove that

  1. A qualifying EB-5 investment was made in an NCE.
  2. The investment was made using lawfully sourced funds.
  3. The NCE has a credible business plan and employment creation projections.

We now examine how investors can submit the appropriate evidence in Form I-526. This application is typically prepared with an immigration attorney’s assistance.

Proof of Investment in an NCE

The evidence used to prove that an investment has been made may include the NCE’s bank statements, loan certificates, promissory notes, or escrow account records (EB-5 capital is often stored in an escrow account until the investor’s I-526 petition is approved).

If the NCE is located in a TEA and therefore qualifies for the reduced investment amount, evidence of TEA designation must be submitted along with Form I-526. USCIS is responsible for delineating high-unemployment TEAs, whereas data supporting rural TEA status can be obtained from the most recent 10-year national census and the U.S. Office of Management and Budget.

Lawful Source of Funds

One of the most challenging aspects of preparing the I-526 petition is proving that the EB-5 investment was sourced lawfully. USCIS has high evidentiary standards for source-of-funds documentation, and it expects investors to trace the flow of their capital as accurately and thoroughly as possible. This information enables USCIS to filter out EB-5 applicants with checkered pasts.

Of course, each investor’s source of funds will differ; many EB-5 applicants use funds from salary payments, real estate sales, secured loans, stocks proceeds, or gifted capital, but USCIS allows virtually any legal source. An immigration attorney’s guidance will be vital in determining what kind of documentation is needed.

Potential for Job Creation

Form I-526 must demonstrate that the invested capital will be used to create at least 10 qualifying jobs within two years after the investor begins their conditional residency. To this end, the NCE’s business plan should include a description of the business’s purpose, its operational plan, and financial projections, as well as background information on the management team. USCIS will find the business plan more credible if each projected job position is described in detail and a hiring timetable is provided.

Investors must also be cognizant of the significant differences in the way job creation is calculated by direct and regional center-sponsored EB-5 offerings. The direct investment model requires NCEs to create full-time, W-2 positions that appear on the company’s payroll. These positions must be sustained for at least two years and filled by workers authorized for employment in the U.S.

In contrast, NCEs in the regional center program can also count indirect and induced employment. Indirect jobs are a result of the NCE’s overall economic impact: for instance, if a construction project purchases materials and services for local companies, these expenditures may count as indirect jobs. Similarly, induced employment occurs when an NCE’s employees spend their wages in the area. Even though calculating these forms of employment from an econometric model and not from payroll records is certainly advantageous, USCIS allows indirect and induced positions to constitute no more than 90% of a regional center NCE’s total job creation. Businesses in the regional center program are thus required to create at least one direct position.

The Investor’s Managerial Role

The EB-5 program requires investors to actively participate in managing their NCEs, and the extent to which an investor is involved in day-to-day operations largely depends on the company’s management structure. Generally, regional center investors, who sign on as limited partners, have lighter managerial duties than direct investors.

Submitting the I-526 Petition

An investor’s immigration attorney typically submits Form I-526 to USCIS. As of April 9, 2022, the filing fee is $3,675. Upon adjudication, USCIS may either approve the I-526 petition, deny the form, or send a request for evidence. As long as the applicant shows that the funds were sourced legally and provides sufficient evidence of compliance with USCIS standards, the agency’s decision should be favorable. Nevertheless, processing times for Form I-526 can be unpredictable.

Processing Times for Form I-526

It takes several years for a foreign national to receive U.S. permanent resident status through the EB-5 program, and USCIS processing times can be very lengthy. The agency’s Historical National Median Processing Time page lists the I 526 processing time for the past five fiscal years.

Recent I 526 Processing Time Statistics (In Months)

  • 2017: 16.6
  • 2018: 17.9
  • 2019: 19.0
  • 2020: 31.1
  • 2021: 32.5

The above figures show an increase in EB 5 visa processing times in 2020 and 2021, but investors should note that USCIS processing capacity was diminished by the COVID-19 pandemic during that period. To the disappointment of prospective investors, USCIS’s estimated I-526 processing times are 35 to 58.5 months as of April 2022—an increase from 2021. Investors from China, which is currently subject to cutoff dates shown in the monthly Visa Bulletin, can expect a longer wait. (The Visa Bulletin shows which countries are experiencing a backlog in EB 5 visa processing.)

Possible Improvements Under the Biden Administration

Still, as the pandemic draws to a close in 2022, many industry analysts expect processing times to decrease. New leadership may also contribute: Ur Jaddou, who became the director of USCIS on July 30, 2021, has said that she will work to improve processing times and efficiency. The Biden administration as a whole seems comparatively friendly toward immigration, and it may take additional measures to shorten the EB 5 visa processing times.

How Will the EB-5 Reform and Integrity Act of 2022 Impact I 526 Processing Time?

Prospective investors have another reason to expect positive changes in the EB-5 industry; on March 15, 2022, President Biden enacted the EB-5 Reform and Integrity Act of 2022, which modifies several key policies and increases transparency in regional centers and NCEs. For instance, the bill grants priority processing times and reserves 20% of the annual EB5 visa pool for investors in rural TEAs. And, as a result of the increased funding that USCIS will receive for the EB-5 program, the I 526 average processing time may decrease in the coming months. This is undoubtedly exciting news for the EB-5 program.

Form I-526: The First Step Toward An EB-5 Green Card

Obtaining approval for Form I-526 requires doing careful research, choosing a USCIS-compliant EB-5 offering, and providing detailed evidence. This crucial hurdle in the EB-5 process is the first step a foreign national takes toward obtaining U.S. permanent resident status. Any prospective investor interested in immigrating through the EB 5 visa should contact EB5 Affiliate Network (EB5AN) for industry-leading expertise on how to find a safe offering and file the I-526 petition. We have helped more than 1,900 families get started on the EB-5 immigration system, and our high-quality projects have enjoyed an I-526 petition approval rate of 100%.

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