FAQ – California State Regional Center

General Questions

What is a USCIS EB-5 Regional Center?

An entity, organization or agency that has been approved as such by the USCIS;
Focuses on a specific geographic area within the United States; and ,
Seeks to promote economic growth through increased export sales, improved regional productivity, creation of new jobs, and increased domestic capital investment.

Who is eligible?

Permanent resident status based on EB-5 eligibility is available to investors, either alone or coming with their spouse and unmarried children under the age of 21. Eligible aliens (Foreign Nationals) are those who have invested or are actively in the process of investing the required amount of capital into a new commercial enterprise that they have established (under the “million dollar” green card program); or through a Regional Center under the “Pilot” program. The prospective investor must document that the capital was legally earned and satisfies general eligibility requirements (e.g. medical, criminal). The investor’s spouse and minor children (under 21) also qualify. The age of the minor children is “frozen” at the time of the application so, for example, a 20 year old dependent is not in danger of “aging out” during the process.

They, or the Regional Center, must further demonstrate that this investment will benefit the United States economy and create the requisite number of full-time jobs for qualified persons within the United States.

In general, “eligible individuals” include those:

1. Who establish a new commercial enterprise by:

creating an original business; purchasing an existing business and simultaneously or subsequently restructuring or reorganizing the business such that a new commercial enterprise results; or expanding an existing business by 140 percent of the pre-investment number of jobs or net worth, or retaining all existing jobs in a troubled business that has lost 20 percent of its net worth over the past 12 to 24 months; and

2. Who have invested — or who are actively in the process of investing — in a new commercial enterprise:

at least $1,000,000, or

at least $500,000 where the investment is being made in a “targeted employment area,” which is an area that has experienced unemployment of at least 150 per cent of the national average rate or a rural area as designated by OMB (Office of Management & Budget); and

3. Whose engagement in a new commercial enterprise will benefit the United States economy and:

create full-time employment for not fewer than 10 qualified individuals; or
maintain the number of existing employees at no less than the pre-investment level for a period of at least two years, where the capital investment is being made in a “troubled business,” which is a business that has been in existence for at least two years and that has lost 20 percent of its net worth over the past 12 to 24 months.

4. Invest in a USCIS approved Regional Center under the Pilot Program.

The Immigrant Investor Pilot Program (commonly referred to as the Regional Center Program) was established pursuant to Section 610 of Public Law 102-395 on October 6, 1992 and differs in certain aspects from the basic EB-5 investor program.

To become designated as a Regional Center, a proposed program has to evidence the following basic requirements:

Specific focus on a geographic region
Promotion of economic growth through increase in export sales, if applicable
Promotion of improved regional productivity
Creation of a minimum of 10 direct or indirect jobs per investor
Rise in domestic capital investment
Promotion and publicity to reach prospective investors
Positive impact on regional and national economy through rise in household earnings
Increase in demand for business services, utilities, maintenance and repairs and construction projects

The benefits:

Investing in an approved project makes it easier to satisfy the requirements of the EB-5 Visa program.
This ease of satisfying requirements results because the Regional Center is allowed to count both jobs that were created as a direct result of the investment and as an indirect result.
The investor is not required to take an everyday role in the management of his or her investment.
The investor has the opportunity to “pool” investment funds with other investors in a project.
The investor may live and work anywhere in the United States.
Direct Job Creation – These are those jobs that establish an employer-employee relationship between the newly established commercial enterprise and the persons that they employ.
Indirect Job Creation – These are the jobs held by persons who work outside the newly established commercial enterprise. For example, indirect jobs include employees of the producers of materials, equipment, and services that are used by the commercial enterprise. There is also a sub-set of indirect jobs that are calculated using economic models that are known as induced jobs. Induced jobs are those jobs created when direct and indirect employees go out and spend their increased incomes on consumer goods and services.

Do I need to speak English?

No. The investor should obtain the services of a translator (friend, attorney, family member) to read our materials and contact our office for additional information

Can I travel?

A conditional or permanent resident is entitled to travel freely for less than 6 months at a time outside of the United States. If such an individual needs to be outside of the U.S. for more than six months, he/she may apply (up to three times) for a travel permit, that is good for 2 years. This travel permit establishes that the resident is not abandoning U.S. residency, despite the extended absence. However, time spent outside of U.S. is counted against the 30 month physical presence requirement for citizenship.

Must I be in good health?

Yes. You must submit to and pass a health screening as part of the Consular review process before a conditional EB-5 Visa is granted.

Who may receive the permanent residency (“green card”)?

An individual or immediate family member (husband, wife and any unmarried children under the age of 21) may receive permanent residency. It is also possible for adopted children to be included in the immediate family designation.

How long does USCIS take to process the visa petition?

Processing times can vary considerably depending upon the backlog of the processing center and the complexity of the petition. The average processing time is approximately three to six months, but the entire process could take over one year.

USCIS EB-5 Program Overview

What is Section 203(b)(5) of the Immigration and Nationality Act?

Congress created this immigrant visa category in 1990 to encourage foreign investment in the United States. The program is commonly called the EB-5 Immigrant Investor Visa Program. It requires that foreign entrepreneurs invest either $1 million or $500,000 in a new United States business to create 10 full-time jobs.

How do I Seek Status as an Immigrant Investor (“Million Dollar” route)?

In order to seek status as an immigrant investor, you must file CIS Form I-526, Immigrant Petition by Alien Entrepreneur. The Form I-526 must be filed with supporting documentation which clearly demonstrates that the individual’s investment meets all requirements, such as:

establishing a new commercial enterprise; investing the requisite capital amount; proving the investment comes from a lawful source of funds; creating the requisite number of jobs; demonstrating that the investor is actively participating in the business; and, where applicable, creating employment within a targeted employment area.

What is the Pilot Program?

The Pilot Program allows immigrant applicants to file a petition with the USCIS for a new business within a designated Regional Center, by filing within a Regional Center project area. The business owner must prove that 10 indirect jobs were created as a result of the new business’ operations. The business owner does not have to directly hire 10 employees.

How many immigrant visas are allotted for this classification?

The EB-5 program allots 10,000 visas per year for aliens and family members whose qualifying investments result in the creation or preservation of at least ten (10) full-time jobs for U.S. workers.

What is the difference between “conditional” and “unconditional” green cards?

Under the regulations, an investor who is approved for the EB-5 immigrant visa receives a “conditional” green card, which must be reissued after two years, subject to removal of conditions. Otherwise, the two cards offer the same rights and privileges.

A conditional Green Card is a temporary Green Card valid for two years. After the two year conditional period, a three-month window opens up during which an individual must file another application with the USCIS to verify that all of the funds have been invested and the required employment has been created. When the conditional resident status has been lifted, full resident status is granted and a permanent Green Card is issued.

What must the Regional Centers demonstrate to lift the “conditions” of the investor at the I-829 stage?

Show, using reasonable methodologies, that 10 or more jobs are actually created either directly or indirectly by the new commercial enterprise through revenues generated from increased exports, improved regional productivity, job creation, or increased domestic capital investment resulting from the project developed through the EB-5 Regional Center pilot program.

If my I-526 petition is approved by USCIS, what is the purpose of the Consulate application and Interview, and how soon do I get my “Green card”?

Upon approval of I-526 Petition, you must wait for notification from the US Consulate in your home country to prepare documents for the Visa interview. The purpose of this procedure is to ensure that the investor and his or her family undergo medical, police, security and immigration history checks before the conditional permanent resident visas are issued. At the interview, the consulate officer may address these issues and information printed on the I-526 application, including asking the investor to summarize the nature of his or her immigrant investment. If the investor and his or her family are in the United States, then the investor may apply for adjustment of status by filing form I-485, and supporting documents, the application may be filed at the appropriate office of the USCIS.

Can I apply if I have been rejected or terminated in the past by USCIS for an L-1, E-2, B, or other visa?

Rejection in the past does not disqualify the applicant, unless the reasons are related to fraud or other major problems. It is most important that all criminal, medical, or U.S. immigration history problems be disclosed to the limited partnership and legal counsel in advance of the application.

What is the difference between permanent residency and citizenship?

Once you obtain a green card, and become a legal permanent resident, you have most of the rights and obligations of U.S. citizens, except that you cannot vote and are not entitled to some public benefits. You are subject to the same tax filing requirements and entitled to the same tax rates and deductions as U.S. citizens. Your “green card” is your most important travel and identification document. When your green card arrives, please look at it carefully. You may need to extend it in 10 years. If you need to replace it before then because it is lost, stolen or dilapidated, you may file a form with the USCIS.

One of the most important rights legal permanent residents possess is the right to obtain U.S. citizenship after five years. There are two ways to become a U.S. citizen. One is by being born in the U.S. or being born to a U.S. citizen. The other way is by naturalization. The first step in becoming a U.S. citizen through naturalization is to become a Legal Permanent Resident (LPR). Being an LPR for 5 years is one of the basic requirements for qualifying for naturalization. A second requirement is being physically present in the U.S. for 30 months during the 5 years prior to the naturalization application. Once becoming a U.S. citizen, an individual is entitled to all U.S. citizenship benefits including the right to vote and hold public office.

EB-5 Investor Questions

Do I have to personally manage the new enterprise to qualify for my visa?

No, investments in a Regional Center are passive and do not require an active management role.

Must I have previous business experience or education?

The investor is not required to have any prior business experience. Likewise, the investor is not required to demonstrate any minimum level of education. The only requirement for the investor is that he or she has the required net worth and capital and can prove that the funds are legal, through proper documentation.

What is the most common reason for rejection of an EB-5 visa application?

In most cases when an EB-5 visa application is rejected, the applicant failed to demonstrate that he/she had legally earned the investment capital.

What is the amount of required capital for participation for a Regional Center program?

As long as the Regional Center operates within a “targeted employment area” as defined by the USCIS the legal capital requirement is $500,000.

What is the likely return on my $500,000 of capital?

The law states that the $500,000 must be “at risk”, and that providing a guaranteed minimum return and/or a guaranteed return of investment funds does not meet the requirements of the law and is expressly prohibited. Any guarantee by any regional center would invalidate the EB-5 visa petition.

What is meant by qualifying investment “capital?”

The regulations define capital as cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien entrepreneur. A debt will qualify as capital only when the alien entrepreneur is primarily and personally liable for the indebtedness. The regulations permit indebtedness secured by the alien’s own assets to count as “capital.”

This rule allows bank loans and provides greater flexibility for the investor who may have assets that are being used for other personal and business purposes and are not immediately available for investment in an immigration program. The bank loan also broadens the number of investors eligible for the EB-5 program.

The Investment Visa Program meets all investment capital requirements through the use of initial cash investments complemented by a bank loan secured by the assets of the investor. For this reason, the investor in this Program must demonstrate to the bank a total net worth of at least US$500,000 that will meet the standard requirements of the bank for financing. This may include real estate or other real property, ownership of business assets, cash, stocks, bonds and other assets located inside or outside the United States or in the country of origin.

Does investing in a TEA mean taking more investment risk?

Understanding the unique characteristics of the particular sub-market is paramount to assessing the risk of making any real estate investment, particularly one within an area that, by definition, has experienced higher than average rates of unemployment.

What is meant by the requirement that the investor’s assets be “lawfully gained”?

Under USCIS regulations, the investor must demonstrate that his assets were gained in a lawful manner. This requires the investor to prove his investment funds were obtained through lawful business, salary, investments, property sales, inheritance, gift, loan, or other lawful means.

Can money gifted by a parent or other relative be used for an EB-5 Investment?

Yes, provided that any applicable gift taxes are paid. It must be demonstrated that the gift is an actual arms length transaction and is a not a mere ruse or that the gifted funds will be given back after permanent resident status is granted.

What are the obligations of the investor to participate in the investment?

For the “Million Dollar” green card, or original EB-5 investment, the investor must be active in the management of the investment by engaging in the management of the new commercial enterprise, either through day-to-day managerial control or through policy formation.

For the Regional Center investor, however, the law does specifically allow that an investor will qualify as a “limited partner” as defined in the Revised Uniform Limited Partnership Act if the project meets all the regulation requirements by enrolling the investor in the investment as a limited partner. This role allows the investor to continue to engage in their own business without participating in the investment operations. Additionally, this allows the investor to live where he pleases, and gives him the option to enter and exit the United States without any obligation to manage the investment. Most importantly, the limited partner, like the corporate shareholder, is only liable to the enterprise to the extent of the agreed-upon investment.

What corporate structures are used in the EB-5 Program?

Corporation: formed by filing a charter with a state government owned by shareholders. The corporation is taxed on its income. The shareholders are only taxed on dividends paid to them by the corporation. Shareholders do not pay tax on the corporation’s income. The shareholders only risk the cost of their investment in the corporation. They bare no responsibility for the general affairs of the corporation.

Partnership: is comprised of two or more people or entities coming together for an enterprise, without any particular state charter. The partnership does not pay tax, but passes through all items of income and loss to the partners. The partners pay tax on partnership earnings. Each partner, unlike a corporate shareholder, undertakes responsibility for the entire operations of the partnership. If the partnership were to be sued and judged liable, each partner bares full responsibility for the damages. A corporate shareholder has no such direct liability.

Limited Partnership: combines corporate limited liability with partnership taxation. The limited partnership, formed by filing a charter with a state government, consists of a general partner and one or more limited partners. The charter details the rights and powers of the limited and general partners, percentages of ownership, and distributions of profits. The general partner manages the business. As in a corporation, the limited partners are passive investors liable only for the value of their investment. As in a general partnership, limited partnership income is taxed at the partner level, not at the entity level.

Limited Liability Company: a corporation that passes through income and loss to the shareholders but offers shareholders the same limited liability as a limited partner or corporate shareholder. You could say a limited liability company is a corporate version of a limited partnership.

Will I be subject to U.S. Tax laws?

The United States charges income tax on all US Citizens and Permanent Residents and taxes are based upon worldwide income. Foreign Investors should consider the tax implications and review matters with their professional advisors before making any investment.

Will I need Pre-immigration Tax Planning?

Before you become a resident of the United States you may wish to consider reducing or eliminating some of the United States income, gift and estate tax consequences which would be applicable to you once you become a United States taxpayer. These objectives may be accomplished through utilizing some common planning techniques such as:

making gifts
accelerating income and gains
deferring deductions and losses
creating, amending and/or revoking wills and trusts
creating and/or reorganizing entities

How does the bank “escrow” account protect me against the risk of losing my money?

The initial cash deposit from the investor is placed in an Escrow Bank Account. This account serves to keep the investor’s money protected and separate until such time as the I-526 Conditional Visa application is approved. The funds continue to belong to the investor; however, they are committed to be placed into the investment upon petition approval. The attorney or bank has an agreement with the investor that requires the funds to be released from the account only when the petition is approved by the USCIS. The funds are deposited pursuant to a Private Placement Memorandum and Subscription Agreement.

Family Issues

If I get a green card, do I have to live in the U.S.?

Yes, an applicant for conditional or permanent residence to the U.S. must intend to immigrate to the U.S. and maintain as their primary residence a home in the United States.

Can I bring my family and do they get permanent residency (a green card) if I invest in the U.S.?

A qualifying immigrant investor is eligible to sponsor his/her immediate family, which includes a spouse and all children under the age of 21 years old. All members of the immediate family are granted conditional permanent residency upon approval of the I-526, and all are eligible to apply to remove the conditions after two years.

How long does it take for me and my family to receive the “green card”?

The average processing time for clients of the EB-5 Program can take up to a year or possibly longer. The initial application and petition are usually approved in 2 – 5 months, with the balance of the time being required for completing other Immigration and Naturalization Services (USCIS) and Department of State forms and for scheduling the interview.

Do I have to stay in the U.S. once I receive my EB-5 visa?

No. As a permanent U.S. resident, you will be able to travel freely within and outside of the United States, the same as any citizen. The USCIS EB-5 regional center program has the added advantage that you may be a passive investor – you are not required to work in or actively manage your investment.

Can I sponsor my 21 year old or over child?

While a child who is 21 years old, or more, can not apply for residency under the parent’s immigrant investment application, a parent may gift that child the required investment funds in order for the child to apply individually as an immigrant investor.

After petition approval, can members of the family interview in different countries?

Family members can interview in different countries. The country of origin or where the family has current ties is the standard interview site. Often one member of the family is located in another country, such as a student attending school in the U.S. The student does not have to return to the country of origin and can adjust status in the United States at the district office of the USCIS.

Who receives the permanent residency (“green card”)?

A husband, wife and any unmarried children under the age of 21. It is possible for adopted children to be included in the family. Upon approval you will receive a form evidencing approval, a travel document and your green card.

Legal Questions

What if I am already in the U.S. on another visa status?

An individual may file an I-526 petition if they live abroad or are already in the U.S. The I-526 petition process remains the same. If, however, you are already in the U.S., after the I-526 is approved, you may then file an I-485 Application for Adjustment of Status to Permanent Resident, as opposed to filing for a visa with your local U.S. consulate. Of course, if you are not yet in the U.S., you must file for an immigrant visa with your local U.S. consulate.

Can I hire my own attorney or only one recommended by the Regional Center?

The regional center can suggest qualified attorney’s that specialize in the intricacies of immigration through the EB-5 program. However, you are free to retain the attorney of your choice.

Will my investment in a Regional Center be returned if my application is denied by the U.S. Citizenship and Immigration Services?

Yes. California State Regional Center has created an escrow account in which your investment is frozen until the I-526 application is approved by the USCIS. In the event that your application is denied, your investment will be returned to you in full minus certain administrative expenses.

What makes this program different from the L-1 (manager transfer) or E-1/2 (Treaty Trader/Investor)?

Participation in the Immigrant Investor programs yields Permanent Resident status. The E-1/2 Treaty Investor or Treaty Trader programs allow for nonimmigrant status only. When the qualifying trade PR investment ends, so does the non-immigrant status that has been granted to the alien. Likewise, the L-1 is a non-immigrant classification. Unlike E-1/2, an L-1 alien can apply for classification as a Multinational Executive or Manager. If such a case is approved, which is becoming more difficult due to the high number of fraudulent cases and a subsequent tightening of the review process, the alien may apply for Permanent Resident status.

How long is a Green Card valid for?

If you received your Green Card through investment (EB-5), you should have a conditional Green Card for two years. You must apply for removal of the conditions within a “90 day window” when you have reached the two year conditional time period.

If you do not have the condition removed, the Green Card will become invalid at the end of two years, and your permanent resident status will be terminated.

Unconditional Green Cards are good for ten years. This does not mean that after ten years, you stop being a legal permanent resident – only the card itself becomes invalid. You must apply for a new one using form I-90. Without a current Green Card, you cannot use the Green Card to travel out of the USA, and you also cannot use the Green Card as evidence that you are permitted to work.

Can my Green card be taken away from me?

Once you receive a green card, there are only two conditions required to keep it for life. First, you must not become removable or inadmissible. The most common way of doing this is to be convicted of a serious crime. The second requirement is that you not abandon the United States as your permanent residence. As a general rule, if you have a green card and leave the United States for more than one year, you may have a difficult time re-entering the country. That is because the USCIS feels an absence of longer than one year indicates a possible abandonment of U.S. residence. To avoid a full-scale inspection, you should return within six months. It is a common misconception that to keep your green card all you need to do is enter the United States at least once a year.

If you ever leave with the intention of making some other country your permanent home, you give up your U.S. residency when you go. The USCIS will look to your behavior for signals that your real place of residence is not the United States. On the other hand, remaining outside the United States for more than one year does not mean you have automatically given up your green card.

If your absence was intended from the start to be only temporary, you may still keep your permanent resident status. However, you may no longer use your green card as a U.S. entry document. You must either apply at a U.S. consulate for a special immigrant visa as a returning resident or you must get what is known as a reentry permit.

I have a Green Card and plan on traveling out of the US for a long time. Can I keep my Green Card?

The primary rule surrounding Green Cards is that you lose it if you give up your US residence. The more common criterion, though, is time based. There are three important time limits:

If you are absent for less than six months, you will rarely have a problem. It is to USCIS to prove that you abandoned your residency. Absent that, you are considered to never really have left.

If you are absent for more than six months but less than a year, the burden of proof changes. It becomes your job to prove that you are still a permanent resident. This is based on the concept that after six months, you have to be readmitted and have to prove that you are still admissible.

If you are absent for more than a year, your Green Card will be considered almost automatically abandoned. Once that happens, there is usually no recourse. However, if by chance the immigration officer didn’t ask you how long you have been out of the USA when you return, then you may be in luck and able to keep your Green Card after all. You should in this case not leave the USA for a very long time, and make it your bona fide residence again.

How long must I remain in the United States each year?

The first requirement of any investor after they receive the visa at the United States overseas consulate office is to enter into the United States within 180 days of visa issuance from the consulate. The investor must then establish residency in the United States. Evidence of intent to reside includes opening bank accounts, obtaining a driver’s license or social security number, paying state and federal income taxes, renting or buying a home.

The United States resident may work overseas if required based upon the nature of the business or profession. For those permanent residents living outside the United States, we suggest the investor and family re-enter the United States no less than once every six months.

The longer the investor and family are present in the United States, the less likely the government is to claim that the investor “abandoned” the United States as a permanent residence – thereby endangering his green card status. In some cases, investors may seek the issuance of a “reentry permit” which allows the Investor permission to remain outside the United States for as long as two years without having to reenter the country to maintain permanent resident status.

I need to travel out of the US for more than a year. Is there nothing I can do?

You can apply for a reentry permit (on form I-131) before you leave the US. You can depart before the reentry permit is approved. With such a reentry permit, you can return to the US even after one year until the reentry permit’s expiration date. Reentry permits are issued for two years. You cannot renew a reentry permit, but you can return to the US for a short time and apply for a new one. The second such reentry permit will be granted, but subsequent ones may only be approved for one year at a time.

Where can I find more information about the EB-5 visa program?

Further information regarding the application process, requirements, and benefits of the EB-5 visa program can be found on the website of the U.S. Citizenship and Immigration Services http://www.uscis.gov

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