How Does EB-5 Financing Work for Immigrant Investors?

The EB-5 Immigrant Investor Program offers a pathway to U.S. permanent residency for foreign investors. Established by Congress in 1990, the program aims to stimulate the U.S. economy through capital investment and job creation or preservation for U.S. workers.

Core Components of EB-5 Financing

EB-5 financing requires a qualifying capital investment in a new commercial enterprise. The standard minimum investment amount is $1,050,000. However, this amount is reduced to $800,000 if the investment is made in a Targeted Employment Area (TEA) or an infrastructure project. Most EB-5 investments occur within TEAs to leverage this lower threshold.

A Targeted Employment Area is defined as either a rural area or an area experiencing high unemployment. A rural area is not within a metropolitan statistical area and has a population of fewer than 20,000 people. A high unemployment area must demonstrate an unemployment rate of at least 150% of the national average.

In addition to the capital investment, the EB-5 program mandates the creation or preservation of at least 10 full-time jobs for qualifying U.S. workers. These jobs must be full-time, requiring a minimum of 35 working hours per week. Qualifying employees are U.S. citizens, lawful permanent residents, or other authorized workers; the investor and their immediate family do not count towards this requirement.

The method of counting jobs differs based on the investment structure. For direct investments, only direct jobs count, meaning employees must be on the payroll of the new commercial enterprise. In contrast, investments made through USCIS-designated regional centers can count direct, indirect, and induced jobs. Indirect jobs are those created as a result of the enterprise’s spending on goods and services, while induced jobs arise from the spending of employees in the surrounding area.

The “at-risk” requirement means invested capital must be subject to potential gain or loss, ensuring a genuine commercial undertaking. The full investment must be placed at risk when filing the initial petition and remain invested for at least two years for petitions filed after March 15, 2022.

EB-5 investments can generally follow one of two paths: direct investment or regional center investment. A direct investment involves the investor placing capital directly into a commercial enterprise and often taking an active management role. This model requires the investor to demonstrate direct job creation through payroll records. It offers greater control but typically demands more active involvement from the investor.

Alternatively, investors can participate through a regional center, which is an entity designated by USCIS to manage pooled investor funds for larger-scale projects. Regional centers often handle project development, compliance, and job creation documentation, allowing investors to take a more passive role. The regional center model is popular because it permits the inclusion of indirect and induced jobs, often making it easier to meet the job creation threshold.

The EB-5 Investment Process

The EB-5 visa process begins with project selection, due diligence, and financial documentation. Investors must research and select an EB-5 project, reviewing its business plan, economic analysis, and offering documents. Careful due diligence is essential to align with program requirements and mitigate risk.

Documenting the lawful source of investment funds is a critical step. USCIS requires a clear paper trail proving all funds were legally acquired. Acceptable sources include salaries, business income, property sales, gifts, inheritances, and loans. For example, a property sale requires documentation like purchase agreements, ownership certificates, and proof of tax payments.

To prove the lawful source, investors typically provide detailed narratives supported by authenticated documents such as tax returns, bank statements, and business records, often spanning at least five years. If funds are gifted, the donor must also demonstrate the lawful source of their assets, including their tax returns. Loans used for investment must also show that the loan provider sourced the funds legally, with supporting documentation for the loan’s receipt and authenticity.

After project selection and document preparation, the process begins with filing Form I-526E (for standalone investors) or Form I-526 (for regional center investors) with USCIS. This petition includes all supporting documentation, such as lawful source of funds evidence. Accurate and timely submission is crucial for adjudication.

After the I-526E or I-526 petition is filed, USCIS issues a receipt notice, and the petition enters the adjudication phase. Processing times can vary significantly, depending on factors such as the investment type (direct or regional center) and the investor’s country of origin. While USCIS aims for certain processing targets, actual times can range from approximately 13.5 months for regional center investors to 27.5 months for direct investors, though some rural TEA projects may see faster approvals. During adjudication, USCIS may issue Requests for Evidence (RFEs) if additional information or clarification is needed.

Upon approval of the I-526E or I-526 petition, the investor and their qualifying family members proceed to the next stage, which involves either consular processing abroad or adjustment of status if already in the U.S. Consular processing entails attending an interview at a U.S. consulate or embassy in the investor’s home country. If already in the U.S., an investor may file Form I-485, Application to Register Permanent Residence or Adjust Status, to change their immigration status.

Approval leads to conditional permanent resident status for two years. This conditional green card provides nearly all rights of permanent residency, including living, working, and traveling in the U.S. This interim period requires the investor to demonstrate continued program compliance.

Proving Compliance for Permanent Residency

The final stage involves removing conditions on permanent residency by proving sustained investment and job creation. Investors must demonstrate their full capital investment remained “at risk” and continuously engaged in the new commercial enterprise throughout the two-year conditional residency period. Meticulous financial record-keeping is necessary to show the investment’s ongoing presence.

Evidence for sustained investment typically includes comprehensive financial records, such as bank statements, audited financial statements, tax returns, and contracts related to the enterprise’s operations. These documents must clearly illustrate that the capital was not withdrawn, redeemed, or guaranteed during the conditional period. USCIS examines these records to confirm the investment’s continued commitment to the job-creating entity.

Equally important is demonstrating that the required 10 full-time jobs were indeed created or preserved by the investment. The nature of the documentation depends on whether the investment was direct or through a regional center. For direct investments, concrete evidence like payroll records, W-2 forms, I-9 forms, and employment verification letters are crucial to show direct employment.

For regional center investments, job creation is often proven through updated economic analysis reports, which may rely on economic models to account for direct, indirect, and induced jobs. Supporting documentation for regional center projects can include invoices for expenditures, auditor’s reports, detailed spreadsheets of costs, and the job-creating entity’s tax returns to validate the economic inputs. The goal is to show that the jobs projected in the initial I-526 petition were realized within a reasonable timeframe.

To remove conditional status, the investor must file Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status. This petition, with supporting documentation proving sustained investment and job creation, must be submitted to USCIS within 90 days before the two-year conditional green card expires. Filing within this timeframe is critical to maintain lawful residency.

Upon filing the I-829 petition, USCIS provides a receipt notice that typically extends the investor’s conditional permanent resident status for a period to accommodate processing times. The adjudication process for Form I-829 can be lengthy, often ranging from approximately 22 to 48.5 months. During this period, the investor and their family retain their conditional resident status.

USCIS reviews evidence and may issue Requests for Evidence or require an interview. Once approved, conditions on permanent residency are removed, and the investor and their family receive unconditional permanent resident status, typically a 10-year green card. This signifies successful completion of the EB-5 program.