To be eligible for an EB-5 immigration petition, three key elements must be met:
Investment of Capital
Capital
The regulations that govern the category define the terms capital and investment with an economic benefit in mind, meaning that the U.S. economy can benefit from an immigrant's contribution of capital.
The word capital is defined broadly. The following table outlines how the EB-5 Reform and Integrity Act of 2022 refined the definition of capital.
For petitions filed before March 15, 2022 | For petitions filed on or after March 15, 2022[3] |
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Capital includes cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the immigrant investor, provided the immigrant investor is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. All capital must be valued at fair market value in U.S. dollars. | Congress has similarly defined “capital” as “cash and all real, personal, or mixed tangible assets owned and controlled by the . . . investor, or held in trust for the benefit of the [investor] and to which the [investor] has unrestricted access.” Also consistent with past definitions, the statute now provides that capital must be valued at fair market value in U.S. dollars, in accordance with Generally Accepted Accounting Principles or other standard accounting practice adopted by the U.S. Securities and Exchange Commission, at the time it is invested. |
Definition of Capital
The immigrant investor must establish that they are the legal owner of the capital invested and have obtained the capital through lawful means. As of May 14, 2022, gifts and loans to the investor are expressly permitted as capital, provided certain conditions are met.
Promissory Notes
Capital can include the immigrant investor's promise to pay (a promissory note), as long as the immigrant investor is personally and primarily liable for the promissory note debt and his or her assets adequately secure the note. Further, the assets securing the promissory note:
The fair market value of a promissory note depends on its present value, not the value at any different time. In addition, nearly all of the money due under a promissory note must be payable within 2 years, without provisions for extensions.
Investing Indebtedness
When investing indebtedness, an immigrant investor must demonstrate:
Any indebtedness secured by the immigrant investor's assets qualifies as capital only up to the fair market value of the immigrant investor's pledged assets.
Investment
The petitioner must document the path of the funds to establish that the investment was made, or is actively in the process of being made, with the immigrant investor's own funds. For petitions filed on or after March 15, 2022, the capital must be expected to remain invested for not less than 2 years.
To qualify as an investment, the immigrant investor must actually place his or her capital at risk. A loan from the immigrant investor to the new commercial enterprise does not count as a contribution of capital. A contribution of capital in exchange for a note, bond, convertible debt, obligation, or any other debt arrangement between the immigrant investor and the new commercial enterprise is not a capital investment. Purchasing a share of a business from an existing shareholder without more does not qualify, since the payment goes to the former shareholder rather than to the new commercial enterprise. Investments with guaranteed returns are not qualified. Any agreement between the immigrant investor and the new commercial enterprise that provides the investor with a contractual right to repayment is an impermissible debt arrangement.
Sole Proprietors and Funds in Bank Accounts
A standalone investor who is operating a new commercial enterprise as a sole proprietor cannot consider funds in his or her personal bank account as capital committed to the new commercial enterprise. Funds in a personal bank account are not necessarily committed to the new commercial enterprise. The funds must be in business bank accounts.[34] However, even a deposit into a business account over which petitioner exercises sole control, without more, may not satisfy the at-risk requirement.
Escrow Accounts
An immigrant investor's money may be held in escrow until the investor has obtained conditional permanent resident status if the immediate and irrevocable release of the escrowed funds is contingent only upon:
An immigrant investor's funds may be held in escrow within the United States to avoid any evidentiary issues that may arise with respect to issues such as significant currency fluctuations and foreign capital export restrictions.
Use of foreign escrow accounts is not prohibited as long as the petition establishes that it is more likely than not that the minimum qualifying capital investment will be transferred to the new commercial enterprise in the United States upon the investor obtaining conditional permanent resident status.
When adjudicating the immigrant investor's petition to remove conditions,[37] USCIS requires evidence verifying that the escrowed funds were released and that the investment was sustained in the new commercial enterprise for the period of the immigrant investor's residence in the United States.
Lawful Source of Funds
For Petitions Filed on or after May 14, 2022, the following evidence is required to demonstrate the lawful source of funds:
As of May 14, 2022, by statute, gifts and borrowed funds are expressly permissible for petitions filed on or after that date, provided:
Investors relying on gifted or borrowed funds must demonstrate the lawful source of those funds by submitting the evidence described above for the donor or, if not a bank, the lender.
Evidence of Investment in a New Commercial Enterprise
The following evidence is required to establish investment in a new commercial enterprise:
Engagement in Management of a New Commercial Enterprise
The immigrant investor must be engaged in the management of the new commercial enterprise, either through the exercise of day-to-day managerial responsibility or through policy formulation. Such requirement is met if evidence showing the following:
Job Creation
The investment into a new commercial enterprise must create full-time positions for not fewer than 10 qualifying employees. A qualifying employee is a U.S. citizen, a lawfully admitted permanent resident, or other immigrant lawfully authorized for employment in the United States including, but not limited to, a conditional resident, a temporary resident, an asylee, a refugee, or a noncitizen remaining in the United States under suspension of deportation. This definition does not include the immigrant investor, the immigrant investor's spouse, sons, daughters, or any nonimmigrant.
Evidence of Job Creation
An immigrant investor must submit the following evidence:
The 2-year period is deemed to begin 6 months after adjudication of Form I-526. The business plan filed with the immigrant petition should reasonably demonstrate that the requisite number of jobs will be created by the end of this 2-year period.
As of May 14, 2022, regional centers file a Form I-965F with USCIS before a regional center investor may file an individual petition I-526E.
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