EB-5 (Investment Immigration)
(1) Overview
Unlike the E-2 nonimmigrant visa, the EB-5 program allows investors to apply for Legal Permanent Residence immediately by making a qualifying capital investment in the U.S. As obtaining Legal Permanent Residence becomes increasingly difficult over time, EB-5 is gaining significant attention as a viable alternative. However, under U.S. immigration law, only investments with inherent risks are considered as legitimate—meaning the return of the principal investment is not guaranteed. For this reason, it is essential to consult an immigration attorney who specializes in investment immigration before making any substantial investment.
(2) Types of EB-5
There are three types of EB-5:
The first type is investing $1,050,000 and operating a business in a major city that employs 10 or more U.S. citizens or U.S. permanent residents (Direct Investment Immigration).
The second type is investing $800,000 and operating a business in a Targeted Employment Area (“TEA”), which is defined as a region with a population of 20,000 or less or an unemployment rate of 150% or more, employing 10 or more U.S. citizens or U.S. permanent residents (Direct Investment Immigration).
The third type is investing $800,000 or $1,050,000 in a Regional Center approved by the USCIS without operating a business directly (Indirect Investment Immigration).
Most EB-5 cases fall under the third type, which involves investing the capital in a Regional Center approved by the USCIS. This is because investing $1,050,000 in a major city or $800,000 in a TEA and operating a business that creates jobs for 10 or more people is not easy.
Regional Centers are not easily designated. Each Regional Center must pass a strict screening and rigorous reviewing process by the USCIS. And every year, they are required to report on their business operations to the USCIS. As a result, amongst many Regional Centers, only a handful of projects actively facilitate investment immigration.
(3) Procedure of EB-5
At this point, the applicant is granted a two-year Conditional Permanent Residence, typically 3-4 years after applying for the EB-5 program. However, the timeline may vary depending on the project. Then 21 months after the issuance of the Conditional Permanent Resident Card, the application for Legal Permanent Residence (petition to remove condition and obtain Legal Permanent Residence) can be filed. The reason for granting Conditional Permanent Residence first is simple: it is for the USCIS to review if the project or business is well-operated and if the job creation requirement has been satisfied until the applicant’s Legal Permanent Residence application is reviewed.
Now days, it takes a significant amount of time to become a Legal Permanent Resident through the EB-5 program. Nevertheless, being a Conditional Permanent Resident is not much different from being a Legal Permanent Resident. The Conditional Permanent Resident enjoys the same benefits and rights that a Legal Permanent Resident enjoys. The only difference is that the Conditional Permanent Residence is valid for two years. Therefore, for those who obtained permanent residence through EB-5 program, the five-year period required to apply for U.S. citizenship begins when the Conditional Permanent Residence status is granted—not when the person became a Legal Permanent Resident after removing the condition.
With indirect investment immigration through a Regional Center, investors are not required to operate the business themselves, allowing them the flexibility to reside anywhere in the U.S. For example, an investor who invests through a Regional Center in New York can choose to live in California. In some cases, applicants may have already filed for family-based or employment-based permanent residence before applying for the EB-5 program. Under U.S. immigration law, employment-based immigration, family-based immigration, and investment immigration processes can proceed simultaneously. Once the applicant obtains permanent residence status through one category, the remaining pending applications can be withdrawn.
The most frequently asked questions during the EB-5 program consultations relate to the completion of construction and the possibility of recovering the principal investment. 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 does not qualify as a lawful EB-5 investment.
Completion of construction is of utmost importance, as failure to complete it as planned may result in the applicant being unable to obtain Legal Permanent Residence.
The likelihood of recovering the principal investment in a given project can be assessed by considering various factors. Key considerations include whether the project has successfully returned principal to investors in the past, and whether it is managed by a private company or a (quasi-)government agency. In addition, each project pays annual dividends to investors. However, the interest rates are generally low and vary from project to project. In practice, well-performing or reliable projects tend to offer lower interest rates.
When investors first applied for investment immigration through Regional Centers in the early 1990s, there were no precedents set by USCIS, resulting in some trial and error. However, starting in 2002, new Regional Centers began receiving approval from USCIS under the revised investment immigration law, and a significant number of these centers have been operating successfully to this day. Furthermore, amendments to the investment immigration laws (RIA: Reform and Integrity Act) in 2017 and 2022 have made the investment immigration process even more stringent.
Before making a decision on investment immigration, it is important to receive accurate advice on the pros and cons from an attorney with extensive experience in investment immigration. Applying for investment immigration through a Regional Center with a relatively high likelihood of principal repayment can be one pathway to obtaining Legal Permanent Residence.
(4) Application Process of EB-5
Investment immigration involves two main steps: Immigrant Petition by Regional Center Investor (Form I-526E) and Petition by Investor to Remove Conditions on Permanent Resident Status (Form I-829).
First, Immigrant Petition by Regional Center Investor (Form I-526E) is submitted to USCIS. The key document in this process is the evidentiary document of the investor’s source of funds.
Second, Conditional Permanent Residence is granted. If the applicant applies for the EB-5 program from South Korea, the applicant will receive an immigrant visa stamp in his/her passport after passing the interview at the U.S. Embassy in Seoul. And about three months after entering the U.S. with the immigrant visa, the applicant will receive a physical Conditional Resident Card—valid for two years—mailed to his/her U.S. address. If the applicant applies for the EB-5 program while in the U.S., Application to Register Permanent Residence or Adjust Status (Form I-485) is submitted to USCIS. Upon approval, the applicant will receive a physical Conditional Permanent Resident Card—valid for two years—also mailed to his/her U.S. address. Currently, the USCIS Filing Date for EB-5, as published in the Visa Bulletin, is open. This allows applicants to submit both Step 1 (Form I-526E) and Step 2 (Form I-485) concurrently, enabling them to obtain an Employment Authorization Document and Advance Parole in a relatively short period.
Third, Petition by Investor to Remove Conditions on Permanent Resident Status (Form I-829) can be submitted starting 1 year and 9 months after Conditional Permanent Residence is granted. Currently, the processing time for Form I-829 is approximately 3 to 4 years.
Fourth, you can apply for U.S. citizenship 4 years and 9 months after becoming a Conditional Permanent Resident. However, Legal Permanent Resident status must be granted before U.S. citizenship can be approved.