Investors and Entrepreneurs

At the Law Office of Matthew I. Hirsch, we recognize the critical economic role of immigrant investors and entrepreneurs. We have worked with individuals and organizations to secure the immigration status they need to establish and grow their business in the United States. Our satisfied clients include investors in real estate, retail, restaurants, lodging and other businesses. Whether you are an individual investor seeking a temporary visa (E-1 or E-2) or a person seeking to pursue lawful permanent residence through investment in a U.S. enterprise (EB-5), we are prepared to provide expert guidance and support.

Introduction to the Employment-based Fifth Preference:

The EB-5 visa provides a means of obtaining a green card for foreign nationals who invest money in the United States.  The EB-5 visa was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors.  For facts, figures and statistics on EB-5 cases filed over the past several years, click here.

The EB-5 category requires an investment of $1.0 million (or $500,000 in a rural or high unemployment area) in a commercial enterprise that will employ 10 full-time U.S. workers.  The investor must be able to document the lawful source of investment funds, whether his or her own or funds given as a gift.  The investor may invest in his or her own commercial enterprise or in a commercial enterprise owned by other parties.  The investor may also choose to invest in a CIS pre-approved investment vehicle, known as a “Regional Center.”

Regional centers are pre-approved investment entities which meet CIS requirements for job creation.  Virtually all regional centers are established in geographical areas which qualify for the reduced investment threshold of targeted employment areas.  In a regional center investment, the investor/applicant takes no active role in the management of the enterprise.  To see a list of CIS-approved Regional Centers, click here.  More information on stand-alone investments vs. regional centers is included below.

Procedures:

The EB-5 application for is made on Form I-526, Petition by Alien Entrepreneur.  The Form I-526 is accompanied by evidence addressed to the various regulatory criteria.  In general, this would include documents demonstrating source of funds, transfer of funds and availability of funds, additional documents relating to the enterprise, including financial projections, contracts, leases and agreements, a business plan showing capital outlay, monthly expenses and plans for job creation, documents showing the qualifications and experience of the investor and other documents demonstrating the commercial viability of the business venture.

At present, it is taking the CIS more than one year to adjudicate the Form I-526.  The approval of the I-526 does not confer lawful permanent residence; it is not a “green card.” Rather, it is a determination of the applicant/investor’s eligibility to immigrate.  Once the I-526 is approved, then the applicant can proceed with the final stage of the green card process.  For persons in the U.S., that final stage is the Form I-485, Application for Adjustment of Status.  For persons living outside the U.S., the final stage is the Application for Immigrant Visa Processing, filed with the U.S. Dept. of State’s National Visa Center, leading to an in-person interview at the U.S. Embassy/Consulate serving the area where the applicant resides.  After the I-526 is approved, the investor/applicant’s spouse and children under the age of 21 can also file for permanent residence in the U.S. Separate applications are required for each family member.

Following the approval of the Form I-485 or the issuance of the Immigrant Visa, the applicant becomes a “conditional” permanent resident of the U.S. This is a temporary, two-year status.  Within the 90 day period prior to the end of the two-year period, the investor/applicant is required to follow an additional procedure, called the Form I-829, Petition by Entrepreneur to Remove Conditions.  The Form I-829 is required to show that the investor/applicant has followed through with the investment plan, that the investment is still on-going and that the investment has created at least ten jobs.  Once the Form I-829 is approved, the applicant/investor and his/her family members are lawful permanent residents of the U.S.

Regional Centers vs. Stand-alone EB-5s:

As mentioned, there are two options when applying for an EB-5 visa: investing in your own commercial enterprise, or investing in a pre-approved regional center.  Investing in one’s own commercial enterprise is the best option when the investor’s driving force is starting and managing the business, and the investor knows that the business will create at least ten jobs within the two years following the approval of the I-526.  This is also a good option for individuals who want to have control over the investment, and who want to have a business and maximize profits from the investment.

On the other hand, the regional center often meets the needs of investors who are only interested in investing for immigration purposes.  More specifically, this is the better option for investors who are not interested in starting a business, who do not want to be responsible for creating or managing the business and who do not want to be responsible for creating jobs for U.S. employees.  This is also a better option for an individual who wants to spend a significant amount of his or her time outside of the U.S.  In general, the use of a regional center means high entry costs and low or negligible returns on investment.

Requirements:

1. Amount of Investment

Individual EB-5 investments are generally $1,000,000.  However, if the investor can prove that the investment is in a “rural area” or in a targeted-employment area i.e. an area which has experienced unemployment of at least 150% of the national average rate, then the investment can be $500,000.  Most approved regional centers are in “targeted employment areas”, thus qualifying for the reduced $500,000 investment requirement.

2. Job Creation

An individual EB-5 petition requires proof that the investor has provided “full-time employment” to ten U.S. workers.  This means U.S. citizens or lawful permanent residents.  However, the regional center can fulfill this requirement based upon indirect employment creation generated in the community through the regional center investment.  In order for the investor to have conditions removed after the end of the two-year conditional period, USCIS will have to be satisfied that the direct or indirect employment creation has actually taken place or will occur in a “reasonable time”.

3. Management

As part of the pre-approval process, a regional center must satisfy USCIS that the investors are engaged in the “management” of the enterprise as opposed to maintaining a “purely passive role.”  Most regional centers are set up as limited partnerships.  If the petitioner is a limited partner and the limited partnership agreement provides the petitioner with the rights, powers and duties normally granted to limited partners under the Uniform Limited Partnership Act, the investor will be considered sufficiently engaged in the management of the enterprise.  As a practical and legal matter, this requirement can be met by a limited partner without the necessity of the investor committing to any specific amount of time or engaging in any day-to-day management, since such activities are performed by the general partner.

4. Source of Funds

It is critically important that the investor be able to document the lawful source of investment funds.  More specifically, substantial documentation is required to prove that the investor did not acquire the funds through unlawful means.  If the funds are the result of a gift, this requirement must be met for the person giving the gift.  If the funds are the result of a loan from an individual, this requirement is applicable to the creditor.  Such documentation may include tax returns, real estate transactions, securities transactions, inheritance documentation, stock dividends, employment records, bank records, etc.  To see examples of the kinds of evidence which can be used to show source and availability of funds, click here.

In addition, the investor is also required to trace the path of the funds from the individual investor to the new commercial enterprise.  In some cases, this is as simple as a wire transfer document from an individual’s bank account to the investment enterprise.  In other cases involving countries with restrictions on outbound currency transfers, this can be extremely complex, often involving transfers to multiple parties.  It is important to note that the investment must come from the individual investor.  An investment from a corporate entity, including a wholly-owned corporate entity, may not qualify.

Legal Services:

The Law Office of Matthew I. Hirsch provides legal support for your EB-5 case.  For a stand-alone investment, the attorney’s fee includes:

  • On-going consultation by telephone and e-mail with Matthew Hirsch,
  • any and all necessary legal research associated with filing of Form I-526,
  • any and all analysis of legal, financial and business documents associated with filing of Form I-526,
  • drafting of all necessary forms,
  • consultation with outside attorneys, accountants and other financial/business professionals,
  • preparation of attorney cover letter and related documents,
  • organization of documents required for filing of Form I-526,
  • in the event of a request for supplemental evidence, preparation of timely response to RFE,
  • preparation of documents relating to Applications for Adjustment of Status or Applications for Immigrant Visas.

Fees do not include filing fees, licensing or registration fees, taxes, overnight or international express mail charges, formation of business entity, accounting work, preparation of business or financial plans, attorney’s or filing fees associated with an appeal or unsuccessful result or fees for third-party consultants, vendors or providers.  Fees do not include attorney’s fees or filing fees associated with Petition to Remove Condition.

Conclusion:

At the Law Office of Matthew I. Hirsch, we have experience working with high-net worth clients on investment-related immigration.  Whether you are interested in lawful permanent residence through the EB-5 category or in temporary status through the E-1 or E-2 category, we can help.  Unlike many immigration law firms, we have the background in business law to help you achieve your investment-related immigration goals.  Please contact us with your questions on immigration through investment.