The EB-5 program, a pathway to U.S. citizenship for foreign investors via the United States Citizenship and Immigration Services’ (“USCIS”) Immigrant Investor Program, has been a vehicle for domestic economic stimulation and a doorway to the U.S. for foreign investors for over twenty years. However, while the program has seen a recent uptick in utilization, its opportunities for both foreign investors and domestic businesses alike have been less than fully realized. In the recent past, only about one-tenth of the 10,000 visas available annually under EB-5 are actually issued, providing tremendous potential and opportunity for a substantial increase of investment under the program. More specifically, EB-5 should be recognized as a mutually-beneficial means through which foreign investors seeking U.S. citizenship and domestic entities in need of financing each can attain their respective goals.

EB-5 Investments

In order to qualify under the EB-5 program, a foreign investor must make a $1,000,000 investment, or a $500,000 investment if in a “Targeted Area,” in a “new commercial enterprise” which creates at least ten new full-time jobs for qualifying U.S. workers, all within a two year conditional period. Targeted Areas are comprised of either (i) a rural area not located within a city having a population of 20,000 or more, or (ii) a high unemployment area enduring an unemployment rate that is at least 150 percent of the national average. As part of the initial application, an immigrant investor must show that the entire $1,000,000 or $500,000 for a Targeted Area investment has been made at the time of application. Such investment may be in the form of cash or cash equivalents, as well as equipment, inventory or other tangible property that is contributed to the business, but a loan to the enterprise from the investor will not qualify. The immigrant investor also must establish as part of the application that he or she has invested in a qualifying commercial enterprise. The investor, however, need not show that he or she established the enterprise; investment in an enterprise established by someone else is sufficient. Typically, a qualifying commercial enterprise is a newly-formed, for-profit business, but an investment in an existing for-profit business, which the investor sufficiently restructures or expands, also will qualify. Additionally, while the regulations require the immigrant investor to maintain an active, controlling or policy-forming position in the business, participating as a corporate officer, board member or limited partner, as applicable to the entity structure, may suffice.