This document summarizes the EB-5 immigrant investor visa program. It outlines the two types of EB-5 cases (individual and regional center), requirements for family immigration, the four-step process to become a lawful permanent resident, details about regional centers and how they work, differences between individual and regional center EB-5 cases, general requirements around investing capital in a new commercial enterprise and creating jobs, lawful source of investment capital, and considerations for removing conditional status.

2. EB-5 IMMIGRANT
INVESTMENT CATEGORY

3. EB-5 Program Overview
• Two types of EB-5 cases: Individual and Regional
Center (RC)
• Approximately 90-95% of EB-5 cases are filed
through Regional Center Program.
• 10,000 “EB-5” immigrant visas per year
• $500,000 or $1 million investment
• Conditional green card – after 2 years investor
needs to remove conditions if investment is
sustained and jobs are created

4. Family Immigration
• Who can immigrate with the investor
Spouse
Unmarried children under 21
• “Aging out” children

5. EB-5 Structure
There are four steps to becoming a Lawful Permanent
Resident (LPR) through the EB-5 program
1. Form I-526 immigrant petition approval (9 months
adjudication)
2. Adjustment of Status (4-6 months) or Immigrant Visa
Consular Processing (6-10 months)
3. Receive 2-year conditional permanent resident (CPR)
status
4. Between 21-24 months of receiving CPR status, file
Form I-829 petition to remove the conditions (6-8
months)
5. In about 2.5 years, eligible to apply for citizenship

6. Regional Center
• Regional Center – business entity approved by USCIS
that coordinates EB-5 investment
• Multiple Regional Centers in the same geographic
location
• Specific Industries
• Choosing Regional Center:
 Track record of success - I-526 and I-829 approvals
 Return of Investment
 Conditions of Investment
 Reporting on status of investment to investors
 Loan or equity projects

7. Regional Center Exit Strategy
• 5-7 years after investment
• Resale of investment share or the project property
• Outright sale of the property to another public or private
investor
• Non-recourse leveraged refinancing of the property and
distribution to investors of the excess proceeds as “return of
capital”
• Sale of the interest to a third party investor, including another
managed fund, or co-investor or co-developer
• Tax-free exchange or swap
• Exchange with an “UPREIT” (tax-free) for listed shares in a
real estate investment trust or similar public property
investment vehicle

8. Individual v Regional Center EB-5
Individual EB-5
• Investor creates a new
business or buys an existing
business
• $1 million investment
amount unless the business
is in Targeted Employment
Area
• 10 direct jobs (W-2)
• Engagement in the
enterprise (investor cannot
have merely passive role)
Regional Center EB-5
• Investment in a Regional
Center
• $500,000 investment
amount as most RCs are in
TEAs
• Indirect jobs count
• Investor can be a limited
partner, less active role

9. Individual v Regional Center EB-5
Regional Center EB-5
Individual EB-5
 Manage your own business  No need to manage
business
 Control profits
 Creation of jobs possible for  Perfect for retirees
the business
 Immigration is main
concern
 Profits are marginal
 Limited control over
investment
 Easy to show job creation
 RC will take care of most of
the paperwork

10. General Requirements
• Invest capital - $500,000 or $1 million obtained from lawful
source
• In a New Commercial Enterprise:
Created after 11/29/1990; or
Restructured or Reorganized; or
Expand business resulting in 40% increase in net worth or
number of employees
• At risk investment
• Engage in Management or Policy Formulation
• Create or Save 10 full-time jobs for USC, LPR

11. Investment of Capital
• Invested or in the process of investment
• Investment must be maintained throughout conditional
resident period
• Reduced capital threshold of $500,000 if Targeted
Employment Area (TEA)
 “High unemployment area” – at least 150% of
national average, OR
 “Rural area” – not within an MSA and not within
boundary of any city or town having a population of
20,000 or more

12. Lawful Source of Capital
• 5 years of income tax return required (business and personal)
• If foreign country does not have tax return filing requirement
– must prove it
• Evidence of lawful acquisition of capital
 Business earnings
 Salary
 Gifts
 Loans
 Sale of Real Estate
• Tracing of Funds from Investor to Enterprise

13. New Commercial Enterprise
• Any for-profit business
• “New” – means formed after 11/29/1990
• New Commercial Enterprise may be a preexisting business if
was created after 1990
• If formed before, have to show substantial reorganization or
restructuring - complete transformation of nature of business
• Expansion of existing business resulting in 40% increase in net
worth or number of employees

14. “At risk” Investment
• Capital can include cash, equipment, inventory or tangible
property
• Equity interest is required (stock, LLC/LP interest, etc.)
• Commitment of capital without guaranteed return
• Loans to enterprise will not work
• No guaranteed distributions or redemption provisions
• May use escrow, conditioning release of funds to enterprise
upon approval of I-526

15. Engage in the Enterprise
• Day-to-day managerial control, or
• Policy formulation
• Corporate officer, board member, limited partner with rights
and responsibilities of ULPA
• Passive investor will not qualify

16. Job Creation
• Investment must create 10 full-time jobs for 10 workers
(USC, LPR, asylee or refugee)
• Prove employment with W-2, I-9, payroll records
• Independent contractors do not count
• Business Plan should detail the timeline for job creation

17. Job Creation
• At Removal of Conditions stage, must show jobs were
created or can be expected to be created within a reasonable
period of time
• Direct vs Indirect Jobs (RC)
Direct – employees of the enterprise
Indirect – jobs created collaterally or as a result of capital
invested in a commercial enterprise affiliated with a
regional center by an EB-5 investor.

18. Job Creation – Troubled Business
• Job Creation Exception – Troubled Business
• Troubled Business
 Has been in existence for at least 2 years
 Has incurred a net loss during the 12- or 24-month
period prior to I-526 filing, and
 The loss for such period is at least equal to 20% of net
worth prior to such loss
• Focus on preserving jobs
 Number of existing employees must be maintained
during conditional period
 Total positions must be at least 10 (e.g. 8 saved and 2
created)

19. EB-5 Considerations
•
Removal of Conditions in 2 years: Capital
invested/sustained, jobs created/preserved
• Trends in Adjudication
• Statistics – over 90% RC EB-5

20. Other Visa Options
• E-2 Investment Visa – Investment can later be used for
EB-5
• L-1A Intra-Company Transferee Visa
• H-1B Work Visa

21. QUESTIONS AND ANSWERS

22. Jacob J. Sapochnick, Esq.
619-819-9204
jacob@h1b.biz