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EB-5 Questions and Answers

EB-5 Questions and Answers

Can I use my successful E-2 business and apply for EB-5 case?

Let’s assume that an E-2 investor has started a new Chinese restaurant in 1995, invested over $1 Million USD directly from his individual asset and hired and retains more than 10 full-time workers. Can he now in 2011 use the current E-2 business and apply for I- 526, based on his already having invested more than $1 Million USD and already has created more than 10 full-time jobs?

In our opinion, why not? It’s a “new” commercial enterprise, and you hired more than 10 full-time employees. Moreover, there is no prohibition against using the more than 10 jobs already created before filing the I-526 petition.

However, you need to still maintain more than 10 jobs by end of your conditional permanent residence periodHow a real estate development company can utilize regional center program Let’s say you are a real estate development company (hereinafter called “PC” for “Project Company”) engaged in the development of a convention center in Hawaii. Let’s say the total project costs $100 Million, and you already have $30 Million equity financing, and the project will be completed within 2 years. This kind of situation may present an ideal situation for your company to obtain additional financing at below the market rate and help you successfully complete your development project.

You, as a project company involved in a job-creating project(s), have a choice of establishing and getting approved your own regional center from USCIS which can be very expensive and time-consuming, or you can utilize already-existing regional center and work with that regional center to reach a “win-win” benefits.

For various reasons, establishing your own regional center will not work for a project company which is not well-versed in EB-5 law or how to structure or market EB-5 projects. Many people have a mistaken impression that you just set up a good EB-5 project and a load of foreign EB-5 investors will knock on your door; that’s just not the case, as many regional centers will testify. The best solution is to work with someone who knows the EB-5 processing and to work with the right regional center.

The PC first needs to understand the requirements of EB-5 law. It then needs to analyze whether their project is suitable for a regional center EB-5 project. It then needs to find a suitable regional center which has the necessary experience, knowledge and track record. It then needs to structure their project in a way that will comply with the EB-5 law requirement. It then needs to understand what their obligations are and be willing to abide by these obligations. With the right help, the PC can really optimize the way their project is financed and obtain a “win-win” benefits that are envisioned by the EB-5 Regional Center Program.

Requirements For Obtaining A Regional Center Designation From USCIS

A recent guidance memo from USCIS dated December 11, 2009 sets forth information on what items are required for a regional center designation application.

A Regional Center Proposal must be filed with the Service Center to request USCIS approval of the proposal and designation of the entity that filed the proposal as a regional center. A “Regional Center” is defined as any economic unit, public or private, engaged in the promotion of economic growth, improved regional productivity, job creation, and increased domestic capital investment. The Regional Center Proposal must demonstrate that capital investments made by individual alien investors within the geographic area of the regional center will satisfy the EB-5 eligibility requirements in order to create qualifying EB-5 jobs. The Regional Center Proposal should also demonstrate that the new commercial enterprise’s organizational documents, capital investment offering memoranda, and transfer of capital mechanisms for the transfer of the alien investor’s capital into the job-creating enterprise are in compliance with established EB-5 eligibility requirements.

(B) Regional Center Proposal EB-5 Eligibility Requirements. Regional Center Proposals must demonstrate the following EB-5 eligibility requirements in order to be approved:

(I) A clearly identified, contiguous geographical area for the regional center. If the regional center proposal bases its predictions regarding the number of direct or indirect jobs that will be created through EB-5 investments in the regional center, in whole or in part, by offering investment opportunities to EB-5 investors with the reduced $500,000 threshold, then the Targeted Employment Areas (TEAs), Rural Areas (areas with populations under 20,000 people) and areas of high unemployment (areas with unemployment rates 150% or more of the national rate), should be identified. Note: An alien filing a regional center affiliated Form 1-526 must still establish that the
investment will be made in a TEA at the time of filing of the alien’s Form 1-526 petition, or at the time of the investment, whichever occurs first, to qualify for the reduced $500,000 capital investment threshold.

(ii) A detailed description of how EB-5 capital investment within the geographic area of the regional center will create qualifying EB-5 jobs, either directly or indirectly. This analysis must be supported by economically and statistically, valid forecasting tools, including, but not limited to, feasibility studies, analyses of foreign and domestic markets for the goods or services to be exported [if any], and/or multiplier tables.

(iii) A detailed prediction of the proposed regional center’s predicted impact regionally or nationally on household earnings, greater demand for business services, utilities, maintenance and repair, and construction both within and outside of the geographic area of the proposed Regional Center.

(iv) A description of the plans to administer, oversee, and manage the proposed Regional Center, including but not limited to how the regional center will:

Be promoted to attract EB-5 alien investors, including a description of the budget for the promotional activity; Identity, assess and evaluate proposed immigrant investor projects and enterprises;

Structure its investment capital, e.g., whether the investment capital to be sought will consist solely of alien investor capital or a combination of alien investor capital and domestic capital, and how the distribution of the investment capital will be structured, e.g. loans to developers, venture capital, etc.; and Oversee all investment activities affiliated with, through or under the sponsorship of the proposed Regional Center.

© The Regional Center Proposal may also include an “exemplary” Form 1-526 petition that contains copies of the commercial enterprise’s organizational documents, capital investment offering memoranda, and transfer of capital mechanisms for the transfer of the alien investor’s capital into the job-creating enterprise. USCIS will review the documentation to determine if they are in compliance with established EB-5 eligibility requirements. Providing these documents may facilitate the adjudication of the related 1-526 petitions by identifying any issues that could pose problems when USCIS is adjudicating the actual petitions. For example, if a new commercial enterprise’s limited partnership (LP) agreement contains a buy-back agreement (Le. a redemption clause guaranteeing the rectum of the alien investor’s capital investment), then the alien investor’s capital investment will not be a qualifying “at-risk” investment for EB-5 purposes.

Likewise, if the LP agreement requires the payment of fees from the alien investor’s capital investment of $ 1,000,000 or $500,000, respectively, to the extent that the investment will be eroded below the qualifying level, preventing the full infusion of the capital into the job-creating enterprise, then the alien investor’s capital investment will not meet the required EB-5 level of investment. The approval of a Regional Center Proposal containing defects such as these is not in the best interest of the prospective regional center or the USCIS EB-5 program as the end result will most likely be the denial of the individual alien investor’s Form 1-526 petition.

Any individual Form 1-526 and Form 1-829 petitions claiming new commercial enterprise affiliation with a regional center and thus EB-5 eligibility based on indirect job creation must be denied if they are filed prior to the approval of the regional center’s Regional Center Proposal.

Can I work for another employer after I invest?
When I got the conditional green card for my investment, could I get hired by a US employer and do another kind of job? Example: I invest in a *** Resort project, I get my conditional green card and my SSN, after that can I be an employee of Wells Fargo and work for them?

Answer: Being an EB-5 investor does not prohibit you from working for another US employer or starting another business.

When can I get back my EB-5 money?
When is my investment “due”? When can I get my money back? After I got my unconditional green card?

Answer: The EB-5 project may have its own requirement, but generally speaking, there is no prohibition against an EB-5 investor getting his or her money back after getting I-829 approved. However, most EB-5 project requires a loan of at least 5 years for various reasons.

Do I have to use an immigration attorney to handle my EB-5 case?

As with any legal case, you can represent yourself, but that’s same with all kinds of services, such as repairing a car, computer, doing your tax returns, defending a lawsuit, etc. Having said this, EB-5 case is more difficult to prepare than I-130 family petition case, for sure. It isn’t rocket science . . . but sometimes it can feel like it.

Can I count furniture and pieces of equipment I will be contributing to the new commercial enterprise company in the investment amount?

Yes, but as a practical step, you should have them appraised and then given a value before contributing them for the use of the new commercial enterprise entity. Otherwise, USCIS examiner might not believe in the value assigned.

Before you decide to plunk down $500,000 USD or $1 Million USD for an EB-5 case, don’t you think you owe yourself and your family a detailed paid consultation from an experienced EB-5 immigration attorney?” Starting EB-5 case — what potential EB-5 investor should know & do. What potential EB-5 investor should know & do to begin your EB-5 case.

Should my family and I adjust in the US, or process immigrant visas through American Embassy after I 526 approval?
It all depends on your individual needs and situation, but generally, if you and your family members are in your home country, you should do consular processing (apply and obtain immigrant visas at the American Embassy), but if you and your family members are already physically and lawfully residing in the U.S., then you and your family should obtain conditional green cards through I-485 adjustment.

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