Under section 203(b)(5) of the Immigration and Nationality Act (INA), 8 U.S.C. § 1153(b)(5), 10,000 immigrant visas per year are available to qualified individuals seeking permanent resident status on the basis of their engagement in a new commercial enterprise.

Of the 10,000 investor visas (i.e., EB-5 visas) available annually, 5,000 are set aside for those who apply under a pilot program involving a CIS-designated " Regional Center ."

A " Regional Center :"

• Is an entity, organization or agency that has been approved as such by the Service;
• Focuses on a specific geographic area within the United States ; and,
• Seeks to promote economic growth through increased export sales, improved regional productivity, creation of new jobs, and increased domestic capital investment.
• "Alien investors" must:
• Demonstrate that a "qualified investment" (see below) is being made in a new commercial enterprise located within an approved Regional Center ; and,
• 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

Permanent resident status based on EB-5 eligibility is available to investors, either alone or coming with their spouse and unmarried children. Eligible aliens are those who have invested -- or are actively in the process of investing -- the required amount of capital into a new commercial enterprise that they have established. They must further demonstrate that this investment will benefit the United States economy and create the requisite number of full-time jobs for qualified persons within the United States .

The Investment must be made in a "New Commercial Enterprise " or a "Troubled Business"

INS rules define a "commercial enterprise" to include any activity formed for the ongoing conduct of business, including a sole proprietorship, partnership (limited or general), holding company, joint venture, corporation, business trust, or other entity which is publicly or privately owned. It does not include a noncommercial activity such as owning or operating a personal residence.

There are various ways in which a new commercial enterprise can be established. The Investor can create an original business; buy and reorganize an existing company; or, invest $1 million in an existing business without reorganizing or reincorporating if the infusion of capital results in a substantial change in the existing business. In the latter case, substantial change is defined as an increase of at least 40 percent in net worth or number of employees, or both.

The rules allow an alien investor to qualify for an immigrant visa by taking over a troubled business if the acquisition will save jobs. To qualify as "troubled" a business must have been in existence for at least two years and sustained a net loss of at least 20 percent of the company's net worth. Under these circumstances the investment need not create ten new jobs. Instead there must be evidence that the number of existing employees is or will be maintained at the pre investment level.

Who establish a new commercial enterprise by:

• creating an original business;
• purchasing an existing business and simultaneously or subsequently restructuring or reorganizing the business such that a new commercial enterprise results; or
• expanding an existing business by 140 percent of the pre-investment number of jobs or net worth, or retaining all existing jobs in a troubled business that has lost 20 percent of its net worth over the past 12 to 24 months; and

The Immigrant Investor Must Make a Capital Investment

Capital includes cash, cash equivalents such as certificates of deposit, treasury bonds, or other instruments that can be converted readily into cash. Equipment, inventory, and other tangible property are also considered capital. Also within the meaning of capital is indebtedness secured by assets owned by the alien. The alien, according to INS must be directly and personally liable for the indebtedness, and the investment enterprise may not be used to secure the debt.

Who have invested -- or who are actively in the process of investing -- in a new commercial enterprise :

• at least $1,000,000, or
• at least $500,000 where the investment is being made in a "targeted employment area," which is an area that has experienced unemployment of at least 150 per cent of the national average rate or a rural area as designated by OMB; and

The Enterprise Must Benefit the U.S. Economy and Must Create Employment for Ten U.S. Workers

In determining whether the minimum number of workers has been met, the investor and his immediate family are not included. An employee is defined as an individual who provides services or labor for the new commercial enterprise and who receives wages or other remuneration directly from that enterprise. Independent contractors and part-time workers are not within the definition of an employee. Any worker who is authorized to work under the immigration laws qualifies as an employee.

Whose engagement in a new commercial enterprise will benefit the United States economy and :

• create full-time employment for not fewer than 10 qualified individuals; 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.

The Investor Must Invest or be actively in the Process of Investing in the Enterprise

The regulations have defined "investment" as the contribution of capital in the form of equity or long-term debt financing. It is important to note, that a debt financing arrangement between the alien and the new commercial enterprise in which the alien is acting solely as a creditor does not constitute a contribution of capital. The capital being invested need not come from abroad.

In refining the definition of invested capital, the INS determined that an unsecured promissory note does not qualify because such an instrument is not secured by assets owned by the alien investor. In addition, a promissory note which is "secured" by an alien's assets must be treated as if it were unsecured to the extent that the amount borrowed and invested in the new commercial enterprise exceeds the fair market value of the assets securing the promissory note. Only the amount which is considered secured may be counted as a qualifying investment.

The Investor must be engaged in the Management of the Enterprise

The rules permit the investor to meet this requirement by evidence that the investor is a corporate officer or holds a seat on the board of directors. Maintaining a "purely passive role" toward the investment is not permitted under the INS rules. An example of a passive investment is a situation where the investor owns stock in a corporation, but is not an officer or director and takes no part in any management decision-making functions.

In order to seek status as an immigrant investor, you must file Form I-526, Immigrant Petition by Alien Entrepreneur. The Form I-526 must be filed with supporting documentation which clearly demonstrates that the individual's investment meets all requirements, such as:

• establishing a new commercial enterprise,
• investing the requisite capital amount,
• proving the investment comes from a lawful source of funds,
• creating the requisite number of jobs,
• demonstrating that the investor is actively participating in the business; and, where applicable,
• Creating employment within a targeted employment area.

Once the Form I-526 is approved, immigrant investors may 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; or,
• Applying for an immigrant visa at a U.S. Consulate abroad, if residing outside the United States .

Become a Permanent Resident Based on Investment

In order to become a lawful permanent resident, eligible investors must file Form I-829, Petition by Entrepreneur to Remove Conditions. Form I-829 must be filed within 90 days before the second anniversary of an Alien Investor's admission to the United States as a conditional resident.