The EB-5 Immigrant Investor Program allows foreign nationals to apply for permanent resident status after making an investment in a qualifying U.S. business. An EB-5 business can be located anywhere in the United States. However, EB-5 investments must be made in either new commercial enterprises (NCEs) or troubled businesses. NCEs are for-profit businesses that were created or restructured after November 29, 1990. They are usually structured as newly formed partnership entities in which each EB-5 investor registers as a limited partner. On the other hand, troubled businesses are enterprises that have experienced a net loss of at least 20% during the last 12 to 24 months.
In addition to requiring that EB-5 investments be made in NCEs or troubled businesses located within the country, United States Citizenship and Immigration Services (USCIS) has set out several guidelines regarding the nature of EB-5 capital. EB-5 investors must create at least 10 full-time jobs for qualifying U.S. workers, invest the required minimum amount in their EB-5 projects, and carefully document the sources of their funds to prove their legality. Further, all EB-5 investment capital must remain at risk. The investor’s I-526 petition should prove that these criteria were met.
The minimum investment amount for EB-5 projects located in a targeted employment area (TEA) and for infrastructure projects designated by the secretary of the Department of Homeland Security is $800,000. Other EB-5 projects require a minimum investment of $1,050,000. Historically, most EB-5 investors have preferred to fund projects located in TEAs to benefit from the lower amount requirement. A TEA is either an area with high unemployment or a rural area. To qualify as a high unemployment TEA, an area must have an unemployment rate greater than 150% of the national average. Rural TEAs are designated as such only if they are not located inside a metropolitan statistical area (MSA) or on the borders of a town or city with more than 20,000 residents. These data must agree with the most recent 10-year U.S. Census.
