By: Kurt Reuss on August 22nd, 2022
EB-5 Green Card process: from investment to approval
EB-5 basics | EB-5 Visa | EB-5 visa requirements | EB-5 Steps
There are four steps in the EB-5 petitioning process that an immigrant investor should be prepared to complete to become a U.S. permanent resident, along with their spouse and unmarried children under the age of 21.
Step 1: Select a qualifying EB-5 project
The EB-5 applicant must first find a suitable project which they believe will meet the program requirements, especially if they are interested in the faster processing offered by expedited approval and rural premium processing.
When selecting an EB-5 eligible investment, the investor must consider these two desired outcomes: Green Cards and return of capital. The first relates to likelihood of immigration benefits, the second relates to likelihood of having invested capital returned in a timely manner.
EB-5 investment amount
EB-5 visa applicants are required to make an investment of $1,050,000, or $800,000 if the job creation occurs in a Targeted Employment Area (TEA), into a U.S. business venture. TEA designation applies to projects in either a rural area or in a high unemployment area.
Job creation is a critical requirement to EB-5 success. Investments must result in the creation of 10 full-time U.S. jobs to qualify for EB-5.
EB-5 investments in the Regional Center Program allow for indirect and induced jobs to count for job creation. The permanent direct EB-5 program only counts direct jobs directly by the business receiving the capital investment.
The fastest processing with projects in the national interest
EB-5 investments deemed to be in the national interest receive expedited approval by the U.S. Citizenship and Immigration Services. This results in processing of only two to six months. This is the fastest EB-5 processing possible.
Reserved visas and premium processing with rural projects
Investment projects in rural locations have a set-aside of 20% of the overall EB-5 visas and receive premium processing. Lawyers predict this processing to be a year or less. The set-aside qualifies investors to be eligible for an immediately available visa. While a standard EB-5 investment may result in a 10-14 year wait for a Chinese investor to receive a Green Card, a Chinese investor could be living in the U.S. within a year and a half with a rural investment.
U.S. Citizenship and Immigration Service (USCIS) will defer to previous petitioner approvals in the same project, so if a project has received investor approvals, or if the New Commercial Enterprise (NCE) requested an exemplar approval, then investors can have much more confidence that their petition will be acceptable to the immigration service; but it is no guarantee of approval if there have been "material changes" to the project since those approvals.
Know that an investor approval or exemplar approval does not mean the project will definitely create the estimated jobs.
EB-5 investment financial return
EB-5 investors want to be confident that their capital will be returned in full — if not actually deliver some attractive rate of return.
Key drivers that help determine the strength of an investment include the capital stack, and developer equity which shows skin-in-the-game (developer equity is almost universally in a lower position in the capital stack then EB-5 money.) Ideally, EB-5 money is in "first position" in the capital stack and is secured fully by equity in the project.
Another aspect to look for is exit strategy: when loaned investor capital is returned to the investor. Investors want their exit strategy to match up with their I-829 filing date, the time at which their EB-5 investment capital no longer must be "at risk." This can be tricky because their estimated I-829 filing date depends on how long it takes to adjudicate their I-526, so investors should add some cushion to their timetable.
Historically, an EB-5 project that was likely to produce immigration benefits was not often one that would offer a high rate of return. Higher rates of return generally indicate more risk. But as the market evolves, legitimate EB-5 investments are offering better returns.
See EB-5 investments with due diligence
Choosing an industry for EB-5 investment
In prior years, real estate projects were favored EB-5 investments because jobs were modeled by an economist to be created so long as the full budget in the business plan was spent. As real estate projects rarely come-in significantly under budget, this simplified job counts considerably and lowered the job-creation risk. Thus, big real estate projects in marquee locations were deemed to be most attractive as they were seen as “safer” for job creation.
However, since the enactment of the EB-5 Reform and Integrity Act of 2022, and the new EB-5 program rules for TEAs, many of these big-city projects no longer qualify at the lower investment level. Thus, real estate may not be as attractive for an EB-5 project choice as it once was.
As many investors are motivated to pursue a TEA project for lower investment amounts, visa set-asides and premium processing for rural investments, they should understand that TEA investment projects, especially those in rural locations, can encompass a wide variety of industries.
Many NCEs are no longer location dependent, thus making them easier to qualify for TEA designation. Contemporary EB-5 projects can be in various industries including manufacturing, health care, call centers, technology businesses, and many others.
Unless an investor is comfortable investing $1,050,000 in a non-TEA project, they should be open to a variety of project types and locations.
How to make an EB-5 investment
To make the investment, investors will sign a subscription agreement: a request to join a partnership or a limited-liability company. The Manager or General Partner will then accept the investor, who will then wire their investment funds to an escrow account controlled by an appointed escrow agent.
Step 2: Make investment and file EB-5 petition
After making an investment, the investor’s immigration attorney will file their EB-5 petition (known as a Form I-526) with USCIS. The I-526 petition proves the applicant has invested, or is in the process of investing, the required capital, and that they meet the EB-5 program requirements.
We suggest investors interview and retain an experienced EB-5 immigration lawyer that they feel comfortable with to file their I-526 petition.
See our trusted EB-5 immigration lawyer directory
Requirements the I-526 filing must meet
- EB-5 investors must be able to show that their invested capital was acquired lawfully, so a lawful source and path of funds is required.
- The business plan must be credible in the eyes of USCIS and must meet all “Matter of Ho” requirements, which the investor’s lawyer will confirm.
- Invested funds must go into an NCE and be spent on expenditures related to job creation, and the project must create 10 new full-time American jobs.
- The investor’s capital must be placed “at-risk’” till the end of conditional permanent residency with a chance for gain and a risk of loss — without any guarantees of return of capital.
- For an investment to qualify at the lower investment amount of $800,000, it must meet TEA requirements at the time of the investment.
I-526 denial refund
If USCIS denies an 1-526 petition, the investor may wonder if their investment will be returned to them. An I-526 denial refund guarantee may be offered to investors by the NCE and the terms of the refund would be included in the offering documents. But not all guarantees are created equal. It is important to identify who is offering the guarantee and whether the guarantor has the means to deliver on the repayment promise, especially if the project gets denied and all investors would then expect a full refund.
Some NCEs will hold back 10-20% of all investor funds in an escrow account that would be used to repay a denied investor, but this guarantee can, by definition, only satisfy a portion of the NCE’s investors.
I-526 processing times
Processing times have been negatively impacted by COVID-19 as well as other USCIS challenges. As of 2022, experienced immigration lawyers expect the following for EB-5 processing:
- Standard I-526 petition to be adjudicated in about four to five years
- Expedited I-526 petition to be processed in about two to six months
- Rural investment with premium processing to be adjudicated in about a year (including petitions from China as rural set-asides create a new lineup)
See the I-526 petition on the USCIS website
Step 3: Conditional permanent residency for two years
Once an investor’s I-526 petition is approved, conditional permanent residency can be attained in one of two ways:
- If the investor is living in the U.S., they file Form I-485 for adjustment of status.
- Investors living abroad file Form DS-260 with a U.S. Consulate or U.S. Embassy.
With the approval of either application, the investor’s next step in the EB-5 visa process is to become a two-year conditional resident of the United States.
Filing an I-485 for Adjustment of Status
When an EB-5 applicant gets their I-526 approved and is already living in the U.S., they can then adjust their status from non-immigrant to permanent resident.
This petition can be filed immediately after I-526 approval. It is six pages long and has a filing fee of $1,140 (not including the $85 fee for biometric services). It is highly advisable to have an immigration attorney do the filing for the investor.
I-485 required documents
- Birth certificate
- Marriage certificate and, when applicable, divorce certificate
- Criminal history
- Two photographs of the petitioner
- Passport copy & copy of non-immigrant visa showing current U.S. status
After filing, biometric screening, including fingerprinting, is required for petitioners 14 through 79 years of age.
As of June 2020, USCIS has posted an average historical I-485 processing time for FY2020 (to date) of 13.7 months. A petitioner may file an I-765 Application for Employment Authorization and/or I-131 Application for Travel Document while they wait for their I-485 to be processed.
Most petitions result in approval. Denial, though not very common, usually happens in cases of criminal or immigration law violations.
DS-260 application process
If an EB-5 investor has their I-526 petition approved and they are not living in the U.S., then they must file a DS-260 application for conditional permanent residency. It is processed at a U.S. Consulate or Embassy in the petitioner’s country. It is highly advisable to file this form with an immigration attorney. The application consists of two parts: application and interview.
DS-260 application information
The application documents biographical information, including previous residences, job history, and military service history (if applicable).
On May 31, 2019, Department of State (DOS) updated its requirement for DS-260 form applicants to fully disclose the social media activity of the last five years under a Social Media Disclosure.
This is conducted at the U.S. consulate or embassy of the applicant’s country. A consular worker assists in completing this part of the application process. The applicant may be asked to bring documents such as birth certificates, passport, and marriage certificate (if applicable).
Approval of I-485 or DS-260: Green Card and next steps
Approval of an I-485 or DS-260 petition results in a Green Card — the applicant is now a conditional permanent resident in America. This status is good for two years. The investor and their family members can live and work in the U.S.
During the 2-year conditional residency period, the EB-5 visa investor will be required to fulfill physical presence requirements, and cannot remain outside of the United States for more than one year. If the immigrant investor does reside outside of the U.S. for more than one year, they would be required to obtain a re-entry permit.
Three months before the expiration of the conditional permanent resident status, the investor will want to remove the conditions of permanent residency.
Step 4: Removal of conditions
The final step in the EB-5 visa process is for the applicant to become an unconditional permanent resident. This is done by the removal of conditions to permanent residency after an I-829 application is filed, adjudicated, and approved.
This application provides documented evidence that the petitioner has met all of the requirements of the EB-5 program, as per the United States Citizenship and Immigration Services (USCIS).
I-829 required documents
- Conditional permanent resident card
- Evidence that a commercial enterprise was created, as per federal tax returns
- Documentation that the NCE received the petitioner’s capital investment
- Documentation showing the commercial enterprise was maintained for the entire conditional residency period of two years
- Proof that at least 10 full-time jobs were created according to the business plan, as per payroll and tax records
- Biometric documentation including fingerprints, photograph, and signature
- Legal documents pertaining to the applicant’s criminal history (if applicable)
Filing an I-829 petition
The I-829 petition is submitted to USCIS 90 days prior to the anniversary of the date that the investor first received their conditional residency. If the I-829 is not filed on time, the investor may not be granted permanent residency.
The I-829 petition is typically filed by an EB-5 investor’s immigration attorney. There is a $3,750 filing fee and $85 biometrics fee associated with the filing.
Note that USCIS may request an interview after the I-829 petition is processed.
I-829 processing times
As of June 2020, USCIS has posted an average historical I-829 processing time for FY2020 (to date) of 37.2 months.
Upon successful approval of an I-829 petition (and the approval rates have been well over 90% for a consistent period of time), the EB-5 visa investor, their spouse, and their unmarried children under the age of 21 are issued 10-year Green Cards that can always be renewed. Now they can permanently live and work in the United States.
Five years from the date they were issued initial conditional residency, they will have the option to become U.S. citizens with all applicable rights and benefits.
Here is a link to the I-829 petition on the USCIS website
For a free consultation about rural and expedited investments for faster processing, schedule a call or email me at firstname.lastname@example.org
This article was originally published on May 3rd, 2021 and has since been updated for accuracy and relevancy.