U.S. Citizenship and Immigration Services (USCIS), as part of a general effort to consolidate its policies and procedures, has issued a draft memorandum for the EB-5 investor visa, which allows immigrant investors and entrepreneurs to obtain green cards if they meet certain benchmarks. The new memorandum does not necessarily change existing policies or procedures related to the EB-5 program, but rather collects the existing policies and procedures in a single document.
Beginning in November 2011, USCIS Director Alejandro Mayorkas called on the agency to “improv[e] its administration of the…EB-5 program.” In a memo dated November 9, 2011, he announced reforms to the EB-5 adjudication process, including the addition of “economists with business analysis expertise” to augment the EB-5 adjudicators and a consulting firm to improve adjudication efficiency. The final step of the the process, he announced in that memo, is consolidation of the EB-5 policies into a “single overarching agency policy memorandum.” The recently released memorandum represents that final step.
The latest memorandum, dated February 14, 2013, provides a broad and comprehensive overview of the EB-5 visa program, with in-depth descriptions of the program’s three components: investment, “new commercial enterprises,” and job creation. The first component, investment, requires a petitioner to invest at least $1 million in capital, which could be cash or almost any other tangible property or secured indebtedness, with the value determined based in fair market value in U.S. dollars at the time of investment. “Invest” includes any exchange of the capital for equity, but not a note, bond, or other form of indebtedness. The goal, according to the memo, is to find investors from abroad willing to risk their own capital in the U.S. market. The creation of indebtedness, by effectively guaranteeing that the investor will recoup some or all of the capital, does not serve that goal.
The one exception to the requirement of a $1 million investment involves commercial enterprises in “targeted economic areas,” for which the petitioner must invest at least $500,000. States may designate rural areas or areas with high unemployment rates as targeted economic areas.
The second EB-5 component requires investment in a “new commercial enterprise.” A “commercial enterprise” is any lawful, for-profit business activity. This could include a sole proprietorship, general partnership, or legal business entity like a corporation. “New” generally means formed after November 29, 1990, an increasingly easy goal to attain. It may also include an older enterprise, if the purpose of the investment is to substantially expand or restructure the enterprise. The investor must remain engaged in the management of the enterprise, as opposed to remaining a passive investor.
The final component, job creation, requires the petitioner, through the investment of capital, to create at least ten full-time jobs for qualified U.S. workers. U.S. citizens, permanent residents, and nonimmigrant visa holders with employment authorization count as qualified workers. The jobs must involve direct employment by the enterprise for at least thirty-five hours per week. In certain cases, the preservation of existing jobs could meet the job creation requirement. In a “troubled business,” defined as a business in existence for at least two years with at least twelve months of net losses equal to or greater than twenty percent of net worth, the preservation of ten jobs could meet the EB-5 requirement. A combination of job creation and preservation would also work, provided the total is at least ten.
The employment immigration attorneys of Samuel C. Berger, P.C. help immigrants seeking visas to work for, or invest in, a New York or New Jersey business, and help businesses petition for skilled immigrant employees. To schedule a consultation with a member of our legal team, contact us today online or at (212) 380-8117.
Policy Memorandum, EB-5 Adjudications Policy (PDF file), U.S. Citizenship and Immigration Services, February 14, 2013
A Work in Progress: Towards A New Draft Policy Memorandum Guiding EB-5 Adjudications (PDF file), U.S. Citizenship and Immigration Services, November 9, 2011
More Blog Posts:
First Volume of USCIS’s Planned 12-Volume Policy Manual Addresses Citizenship and Naturalization, New York & New Jersey Immigration Lawyer Blog, March 7, 2012
U.S. Senate Passes Extension of EB-5 Investor Visa Pilot Program, New York & New Jersey Immigration Lawyer Blog, September 7, 2012
USCIS Launches Initiative to Promote Immigrant Entrepreneurship, New York & New Jersey Immigration Lawyer Blog, March 1, 2012
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