USCIS administers the EB-5 Program. Under this program, investors (and their spouses and unmarried children under 21) are eligible to apply for a Green Card (permanent residence) if they:

• Make the necessary investment in a commercial enterprise in the United States; and
• Plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers.

This program is known as EB-5 for the name of the employment-based fifth preference visa that participants receive.

Congress created the EB-5 Program in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. In 1992, Congress created the Immigrant Investor Program, also known as the Regional Center Program, which sets aside EB-5 visas for participants who invest in commercial enterprises associated with regional centers approved by USCIS based on proposals for promoting economic growth.

USCIS policy on EB-5 adjudications is in Volume 6, Part G of the USCIS Policy Manual.

All EB-5 investors must invest in a new commercial enterprise that was established:

• After Nov. 29, 1990; or
• On or before Nov. 29, 1990, that was:
  • Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results; or
  • Expanded through the investment, resulting in at least a 40% increase in the net worth or number of employees.

Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business, including:

• A sole proprietorship;
• Partnership (whether limited or general);
• Holding company;
• Joint venture;
• Corporation;
• Business trust; or
• Other entity, which may be publicly or privately owned.

This definition includes a commercial enterprise consisting of a holding company and its wholly owned subsidiaries, if each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business.

This definition does not include noncommercial activity, such as owning and operating a personal residence.

Job Creation Requirements

An EB-5 investor must invest the required amount of capital in a new commercial enterprise that will create full-time positions for at least 10 qualifying employees.

• For a new commercial enterprise not located within a regional center, the new commercial enterprise must directly create the full-time positions to be counted. This means that the new commercial enterprise (or its wholly owned subsidiaries) must itself be the employer of the qualifying employees.
• For a new commercial enterprise located within a regional center, the new commercial enterprise can directly or indirectly create the full-time positions.
  • Direct jobs establish an employer-employee relationship between the new commercial enterprise and the persons it employs.
  • Indirect jobs are held outside of the new commercial enterprise but are created as a result of the new commercial enterprise.
• In the case of a troubled business, the EB-5 investor may rely on job maintenance.
  • The investor must show that the number of existing employees is, or will be, no less than the pre-investment level for a period of at least two years.

A troubled business is one that has been in existence for at least two years and has incurred a net loss during the 12- or 24-month period before the priority date on the immigrant investor’s Form I-526. The loss for this period must be at least 20% of the troubled business’ net worth before the loss. When determining whether the troubled business has been in existence for two years, USCIS will consider successors in interest to the troubled business when evaluating whether they have been in existence for the same period of time as the business they succeeded.

A qualifying employee is a U.S. citizen, lawful permanent resident, or other immigrant authorized to work in the United States, including a conditional resident, temporary resident, asylee, refugee, or a person residing in the United States under suspension of deportation. This definition does not include immigrant investors; their spouses, sons, or daughters; or any noncitizen in any nonimmigrant status (such as an H-1B nonimmigrant) or who is not authorized to work in the United States.

Full-time employment means employment of a qualifying employee by the new commercial enterprise in a position that requires a minimum of 35 working hours per week. In the case of the regional center program, full-time employment also means employment of a qualifying employee in a position that has been created indirectly that requires a minimum of 35 working hours per week.

A job-sharing arrangement where two or more qualifying employees share a full-time position will count as full-time employment provided the hourly requirement per week is met. This definition does not include combinations of part-time positions even if, when combined, the positions meet the hourly requirement per week.

Jobs that are intermittent, temporary, seasonal, or transient do not qualify as permanent full-time jobs. However, jobs that are expected to last at least two years are generally not considered intermittent, temporary, seasonal, or transient.

Capital Investment Requirements

Capital means cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by immigrant investors, if they are personally and primarily liable and the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. All capital will be valued at fair-market value in U.S. dollars. Assets acquired, directly or indirectly, by unlawful means (such as criminal activities) will not be considered capital for the purposes of section 203(b)(5) of the Act.

Note: Immigrant investors must establish that they are the legal owner of the capital invested. Capital can include their promise to pay (a promissory note) under certain circumstances.

Future adjustments will be tied to inflation (per the Consumer Price Index for All Urban Consumers, or CPI-U) and occur every five years.

A targeted employment area can be, at the time of investment, either:

• A rural area; or
• An area that has experienced high unemployment (defined as at least 150% of the national average unemployment rate).

A rural area is any area other than an area within a metropolitan statistical area (MSA) (as designated by the Office of Management and Budget) or within the outer boundary of any city or town having a population of 20,000 or more according to the most recent decennial census of the United States.

A high-unemployment area may be any of the following areas, if that area is where the new commercial enterprise is principally doing business and the area has experienced an average unemployment rate of at least 150% of the national average unemployment rate:

• An MSA;
• A specific county in an MSA;
• A county in which a city or town with a population of 20,000 or more is located; or
• A city or town with a population of 20,000 or more outside of an MSA.

A high-unemployment area may also consist of the census tract or contiguous census tracts in which the new commercial enterprise is principally doing business, which may include any or all directly adjacent census tracts, if the weighted average unemployment for the specified area based on the labor force employment measure for each tract is 150% of the national unemployment average.

On March 10, 2022, as part of the FY 2022 Consolidated Appropriations Bill, the Senate approved a reauthorization of the EB-5 Regional Center Program – the EB-5 Reform and Integrity Act of 2022 (“Integrity Act”). The House passed the same bill the night before. The EB-5 Regional Center Pilot Program had lapsed last June 30, 2021. The measure was sent to President Biden, and he signed it on March 15, 2022.

The Integrity Act reauthorizes the EB-5 Regional Center Program through September 2027. It is the first long-term reauthorization the EB-5 Regional Center Program has received since 2015. The Act makes various changes to the program, such as imposing various oversight requirements.

Oversight-related provisions include requiring each center to (1) notify the Department of Homeland Security (DHS) of proposed changes to the center’s structure, (2) maintain certain records and make such records available to DHS for audits, (3) obtain approval for each particular investment offering, and (4) annually report to DHS. More importantly, the Act provides various enforcement authority to DHS and U.S. Citizenship and Immigration Services, including the ability to permanently bar an individual from participating in the regional center program. It also establishes the EB-5 Integrity Fund to fund program enforcement activities.

The EB-5 Regional Center Program allows federally authorized “Regional Centers” to pool EB-5 visa applicants’ investments to exponentially fuel U.S. local and regional economies with projects that create and save thousands of American jobs. EB-5 visas provide permanent resident status to qualified alien investors. Among other beneficial changes, the Integrity Act contains integrity measures to increase transparency and protect foreign investors.

The Integrity Act includes the following important reforms to the EB-5 program:

• A five-year reauthorization of the EB-5 regional center program through September 30, 2027.
• A new section authorizing the grandfathering of any petitions on file in the event the program was to lapse again in the future.
• The new minimum investment amount will be $1,050,000, which is reduced to $800,000 if the EB-5 project is located in a Targeted Employment Area (TEA) or is an infrastructure project. A TEA includes an area of high unemployment or a rural area, and must qualify under the same requirements as the previous EB-5 regulations that were introduced in 2019. An infrastructure project is a public works project in which a governmental entity is the job-creating entity that receives the EB-5 capital from the new commercial enterprise.
• Specific visa set-asides for rural, high-unemployment, and infrastructure projects.
• Language to prioritize the processing and adjudication of rural petitions.
• Language eliminating geographic limitations on investor capital redeployment.
• Language allowing investors to count both indirect and direct positions for job creation purposes.
• The Act includes numerous stringent new requirements for regional centers in relation to securities compliance, record keeping, ownership, and administration.
• All regional centers will undergo a USCIS audit at least once every 5 years.
• Additionally, a new integrity fund has been created in which regional centers must contribute $10,000-$20,000 annually (depending on the size of the regional center) to allow the USCIS to investigate and monitor the all of the parties within the EB-5 industry to ensure compliance.

Although the Integrity Act reauthorized the EB-5 Regional Center Program that had lapsed last year, the Act also puts the Direct EB-5 and Regional Center programs on the same footing, and therefore, both Regional Centers and Direct EB-5 companies will have to reorganize and rethink their business plans to deal with the new rigorous oversight and audit requirements of the new law.

The Integrity Act included in the Consolidated Appropriations Act has major implications for existing and future foreign investors, Regional Centers, developers, and promoters of the EB-5 Program.