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Flores Law Firm
7272 Wurzbach Rd
- Suite 901
San Antonio, TX 78240
(210) 340-3800
Fax: (210) 340-5200
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US RESIDENCY FOR FOREIGN INVESTORS IN THE USA
An EB-5 is an employment based category as an immigrant investor which allows for a foreign individual to enter the United States and immediately file for Legal Permanent Residency, therefore becoming a Permanent Resident of the United States with all the rights and tax obligations such status brings. For tax purposes the foreign person is considered a tax resident immediately upon his entry.
An applicant under the EB-5 category may either invest $1 million in a U.S. business or may participate in the pilot program which requires an investment of $500,000 in an approved regional area. The EB-5 programs are investments projects that have been pre-approved by Immigration for EB-5 purposes for investments into certain sectors of the United States. Following is additional information on the EB-5 immigrant category.
Number of Visas
Overview: Each year 10,000 immigrant visas are available to qualified individuals seeking permanent resident status on the basis of their engagement in a new commercial enterprise. Of the 10,000 visas available, 3,000 are set aside for those who apply under the pilot program involving a USCIS-designated “ Regional Center” which is an entity, organization or agency that has been approved as such by Immigration. Alien investors selecting the pilot program option must demonstrate that a “qualified investment” is being made in a new commercial enterprise located within an approved Regional Center; and must 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 pilot program.
Eligibility
Investors may obtain permanent resident status based on EB-5 eligibility either alone or coming with their spouse and unmarried children (under the age of 21). In general “eligible individuals” include those who establish a new commercial enterprise and who have invested, or who are actively in the process of investing, in a new commercial enterprise and whose engage in said new commercial enterprise will benefit the United States economy and create full-time employment for not fewer than 10 qualified individuals during the 2 year conditional residency period; 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.
Types of Investments
The investment can be in the form of cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the alien provided that he or she is personally and primarily liable and the assets of the new commercial enterprise are not sued to secure any of the indebtedness. The definition specifically excludes capital acquired by unlawful means.
Legal Permanent Resident
The EB-5 Category is intended for Legal Permanent Residency and in order to seek such status as an Immigrant Investor, the applicant must file a Form 1-526, Immigrant Petition by Alien Entrepreneur. The form I-526 must be filed with supporting documentation which clearly demonstrates that the individual’s investment establishes a new commercial enterprise, is of the required capital amount, comes from a lawful source of funds, creates at a minimum 10 full-time jobs, and that the investor is actively participating in the business; and if applicable, is creating employment within a targeted employment area. Once the form I-526 is approved, Immigrant Investors may apply to obtain status as a conditional resident by filing form I-485, Application to Register Permanent Residence or Adjust Status, if residing within the United States. The final step to becoming a legal permanent resident is to file a Form I-829 within 90 days before the second anniversary of the Immigrant Investor’s admission to the United States as a conditional resident.
Evidence Required
With regard to the enterprise, the EB-5 visa applicant should provide the following: Articles of incorporation, partnership agreements, organizational documents, lease agreements; or authorization to do business in state or municipality. Evidence of the investment may be demonstrated by bank statements, evidence of purchased assets; evidence of property transferred from abroad; stock certificates given for investment; or loan or mortgage agreements.
Job Creation
Proof of job creation may be established by I-9s, tax records if employees have already been hired, including proof that they are working full-time; or a copy of a comprehensive business plan demonstrating where the 10 employees will be hired and giving approximate dates within the next 2 years.
Management Duties
Furthermore, the petitioner must be engaged in business on day-to-day basis or through policy formation 8 C.F.R. §204.6(j)(5), which may be established by providing petitioners title and description of his or her duties; evidence that s/he is corporate officer and director; or if partnership, the partners management or policy making activities are consistent with the rights, powers and duties normally granted to limited partners under the Uniform Limited Partnership Act, 8 C.F.R. §204.6(j)(5)(iii).
Conclusion
In conclusion, through making a substantial investment in the amount of either $1 million or $500,000 (pilot program option), an individual can obtain legal permanent resident status in the United States. However, the individual must meet the aforementioned requirements, of which, in addition to the substantial investment, the creation of employment opportunities and benefit to the economy of the United States are of utmost importance. A person who invest into a business in the United States but who wished to remain as a non-resident of the United States may apply for one of the employment based visas available as is the E Visa.
This information is a general summary of the regulations and should not be used in place of individualized legal, tax or investment advise for any investment or transaction. We strongly recommend you consult your attorney or tax and investment adviser regarding your particular case. Should you need additional information it will be our pleasure to assist you.
As requirement of the United States Treasury Regulations, you should be conscious of the fact that this notice has not been written to be used and it should not be used by the recipient to prevent penalties that could be imposed by U.S. Federal Law.
For more information contact us at:
Ruben Flores, CPA, JD
The Flores Law Firm
7272 Wurzbach Rd. Suite 901
San Antonio, TX 78240
Tel. (210)340-3800
Fax (210)340-5200
e-mail: rflores@taxadvisors.com
www.floresattorneys.com
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