Generating Attractive Risk Adjusted Returns from a Diversified Real Estate Portfolio
The following description of the EB-5 Program was excerpted from information that is publicly available from the official web site of the USCIS. See http://www.uscis.gov for additional information regarding the USCIS and the EB-5 Program. Potential EB-5 Program participants are encouraged to review the materials available from the USCIS web site, which may contain more up to date information than that summarized below.
Under section 203(b)(5) of the Immigration and Nationality Act (INA), 8 U.S.C. § 11 53(b)(5), 10,000 immigrant visas per year are available to qualified individuals seeking permanent resident status in the United States on the basis of their engagement in a new commercial enterprise. Of the 10,000 investor visas (EB-5 visas) available annually, 5,000 are set aside for those who apply under a pilot program involving a USCIS designated “Regional Center.” The Capitol Area Regional Center has been so designated by USCIS.
According to USCIS, a “Regional Center:”
- Is an entity, organization or agency that has been approved as such by the USCIS;
- 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.
In order to qualify under the EB-5 Program, petitioners 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.
Permanent US resident status based on EB-5 eligibility is available to investors, either alone or coming with their spouse and unmarried minor 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. In general, “eligible individuals” include those:
1. 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
2. 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 the US Office of Management and Budget; and 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.
In order to seek status as an immigrant investor, applicants must file USCIS Form I-526, Immigrant Petition by Alien Entrepreneur. The Form 1-526 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 already resident in the U.S. may obtain status as a conditional resident by filing Form I-485, Application to Register Permanent Residence or Adjust Status. Non-resident immigrant investors are required to schedule a personal interview at a Consular Office of the U.S. Department of State to obtain their conditional residency status.
In order to become a lawful permanent resident, eligible investors must file a Form I-829, Petition by Entrepreneur to Remove Conditions. Form 1-829 must be filed within 90 days before the second anniversary of an alien investor’s admission to the United States as a conditional resident.
The CARc JOB Fund Program
As sponsor of the Fund, CARc will provide each EB-5 Investor in the Fund with the following materials that will be required to be submitted by EB-5 Investor- petitioners to complete their Form I-526:
- A copy of CARc's USCIS designation letter as a regional center.
- A copy of approved IMPLAN Reports which taken together reflect that the planned investments within the Capitol Area Regional Center will generate full- time employment positions, either directly or indirectly, for not fewer than ten U.S. workers per EB-5 petitioner / investor in the Fund.
- If claiming investment for no less than $500,000, but less than $1 million, within a TEA, documented evidence that the location of the job creating investment is fully located within a TEA.
- A signed legally executed and certified copy of the Operating Agreement of the Fund, including the Schedule evidencing that the EB-5 Investor has been admitted as a member.
- Evidence that the Fund's offering Memorandum supplied to the EB-5 petitioner / investor in connection with his or her investment, complies with applicable SEC requirements governing such matters.