EB-5
(1) Summary
Unlike the E-2 nonimmigrant visa, EB-5 allows investors to apply for Legal Permanent Residence immediately by investing capital in the United States. As time passes, it is harder for aliens to get Legal Permanent Residence. Therefore, EB-5 is a rising alternative option to obtain Legal Permanent Resident status.
However, U.S. immigration law only acknowledges investments with risk, and as a result, the principal investment capital may not be necessarily repaid. Also, starting from November 21st, 2019, the amount of investment has been sharply increased. Therefore, before investing any large amount of capital, it is necessary to consult with an immigration attorney and receive advisement.
(2) Types of EB-5
There are three types of EB-5:
The first type is investing $1,800,000 and running a business employing 10 or more U.S. citizens or U.S. permanent residents.
The second type is investing $900,000 and running a business in a Targeted Employment Area (hereinafter referred to as “TEA”) that has a population of 20,000 or less, or an unemployment rate of 150% or more, that employs 10 or more U.S. citizens or U.S. permanent residents.
The last type is indirectly investing $900,000 or $1,800,000 in a Regional Center approved by the USCIS without running a business. (In this case, the employment condition requirement of 10 or more U.S. citizens or U.S. permanent residents can be proved by indirect job creation.)
Most of the EB-5 cases are of the last type, which is indirectly investing the capital in a Regional Center approved by the USCIS. It is because investing $1,800,000 in big cities or investing $900,000 in a TEA and running a business that can create jobs for more than 10 people is not easy. Regional Centers also cannot be easily designated, and each Regional Center must pass the strict screening and reviewing process from the USCIS. However, only a few Regional Centers are active projects out of numerous Regional Centers.
(3) Procedure of EB-5
At this point, the applicant will be granted a two-year Conditional Permanent Residence after about four years. Then, 21 months from the date of issuance of the Conditional Permanent Resident card, the application for Legal Permanent Residence can be submitted. The reason why USCIS gives Conditional Permanent Residence is simple: it is to review if the project or business is well-operated and if the job creation requirement has been satisfied until the applicant’s application for Legal Permanent Residence is reviewed.
Nowadays, it takes more than 7 years to become a Legal Permanent Resident through EB-5. Nevertheless, being a Conditional Permanent Resident is not different from being a Legal Permanent Resident. The applicant can enjoy the same benefits and rights that permanent residents can enjoy. The only difference is that the Conditional Permanent Residence is valid for 2 years. Therefore, if someone has obtained a Permanent Residence via EB-5, the five-year period required to apply for U.S. citizenship starts from the time the person obtained Conditional Permanent Residence status, not when the person became a Legal Permanent Resident after removing the conditions.
If an applicant chooses to invest in a Regional Center without running a business through indirect EB-5, the person can live anywhere in the U.S. because there is no requirement to operate the business. For example, even if the EB-5 project is in New York, the person can live in California. Also, the applicant may have already applied for family-based or employment-based permanent residence before applying for EB-5. In this case, the EB-5 case can be processed simultaneously. Immigration law allows the applicant to proceed with family-based permanent residence, other employment-based permanent residence, and EB-5 cases at the same time.
The most frequently asked questions for EB-5 are about payback possibilities and interest rates. If there is a risk-free investment project, it cannot be recognized as a legitimate investment for EB-5 purposes. Accordingly, if a project by a Regional Center guarantees 100% repayment of principle to its investors, it cannot be a legitimate investment.
Whether a project has a high probability of return of initial investment can be determined by considering several factors. For example, whether the principal has been properly returned to the investor and whether the project company is a private company or a (semi) government organization can be important factors to consider. Also, each project pays dividends annually to the investors. However, the interest rate is not high and it varies from project to project. Projects with low-interest rates are considered good projects.
When investors first applied for EB-5 through Regional Centers in the early 1990s, there was no precedent for the USCIS, so some mistakes were made. Yet, under the revised investment immigration law from 2002 onwards, new Regional Centers were approved by the USCIS, and there are now several Regional Centers that have been successfully operating. However, the investment amount has increased since November 21, 2019.
Before deciding on EB-5, an applicant should be advised accurately by an attorney who is experienced with EB-5 cases to learn about the advantages and disadvantages of EB-5. Applying for EB-5 through a Regional Center that has relatively high possibility of return of initial investment can be a way to obtain Legal Permanent Residence.
(4) Application Process of EB-5
EB-5 applications are largely divided into Immigrant Petition by Alien Investor (Form I-526) and Petition by Investor to Remove Conditions on Permanent Resident Status (Form I-829).
First, immigrant Petition by Alien Investor (Form I-526) is submitted to the USCIS. The most important document in this process is the evidentiary document of the investor’s source of funds.
Second, Conditional Permanent Residence status is granted. If an applicant applies for EB-5 in South Korea, the applicant will get an immigrant visa stamp on his/her passport after having an interview at the U.S. Embassy or consulate abroad. About three months after entering the United States with an immigrant visa, a physical Conditional Resident card will be mailed to the applicant’s U.S. address. If an applicant applies in the U.S., Application to Register Permanent Residence or Adjust Status (Form I-485) will be submitted to the USCIS and the applicant will receive a Conditional Permanent Resident card, which is valid for 2 years.
Third, Petition by Investor to Remove Conditions on Permanent Resident Status (Form I-829) can be submitted starting 21 months after the Conditional Permanent Resident card is issued. Currently, the processing time is up to 3 to 4 years.
Lastly, the U.S. citizenship application can be submitted starting 4 years and 9 months after becoming a Conditional Permanent Resident. However, Legal Permanent Resident status must be granted before becoming a U.S. Citizen.