Investment Questions
Q. What is the minimum amount of investment required?
A. For investments in areas other than “targeted employment areas (TEA’s),” the minimum amount of investment is $1 million. Investments in “targeted employment areas,” including many approved regional centers, can qualify with a minimum of $500,000.
Q. What is a Targeted Employment Area (TEA)?
A. A targeted employment area is a rural area or a geographical area that has experienced unemployment at a rate of at least 150% of the national average rate. Individual states are authorized to designate geographical areas within the state that qualify as targeted employment areas.
Q. What type of businesses should the EB-5 investment be made?
A. The investment must be in a “new commercial enterprise” in the United States. “New” means that the investment must have been made after November 29, 1990. “Commercial” is to be distinguished from a passive, speculative investment, such as a purchase of real estate for use as a personal residence or for potential appreciation in value (as opposed to an active real estate development project). The U.S. investment can be in any one of four forms: (1) the creation of a new business; (2) the purchase of an existing business, which is reorganized to form a new enterprise; (3) the expansion of an existing business; or (4) the saving of a failing business.
Q. Will an attorney advise me on whether an investment will provide a good financial return?
A.No. The attorney will only advise on visa matters. The EB-5 investor will need to conduct their own due diligence and make there own economic decision.
Q. Is an EB-5 investment in a Regional Center guaranteed?
A. No. There is both an immigration risk and a financial risk. Regional centers may have a number of different projects. It is possible for a regional center to obtain pre-approval of a specific project. Even if a project is pre-approved, there is an immigration risk as to whether the necessary jobs will be created in order to obtain removal of conditions. There is also financial risk in every investment. For these reasons, it is critical for the investor to choose both the regional center and the regional center project very carefully.
Q. If I choose to invest in a Regional center project, must I be an accredited investor to apply?
A. An accredited investor is a term defined by various security laws that describes investors permitted to invest in certain types of higher risk investments including limited partnerships, hedge funds and other investor networks. In the U.S. an individual is considered to be an accredited investor if he or she has a net worth of at least $1 million US dollars (excluding their primary residence) or has made at least $200,000 US dollars each year for the last two years ($300,000 with spouse if married) and has the expectation to make the same amount in the current year. The EB-5 capital investment of $500,000US dollars that will be used for the investment can be counted towards the requirement of $1 million US dollars in assets.
Q. What is meant by the requirement that the investor’s assets be lawfully gained?
A. Under USCIS regulations, the investor must demonstrate that their assets were gained in a lawful manner. This requires the investor to prove their investment funds were obtained through lawful business, salary, investments, property sales, inheritance, gift, loan, or other lawful means. The Regional Center requires an investor to reveal where and how they received their assets in the amount of at least US $500,000 that are used for qualifying for the program capital investment. This may be accomplished through certificates by the investor's licensed accountants, lawyers, court records, salary statements, tax statements, real estate documents and the like. Generally, the investor will present some combination of individual and/or business tax returns, employment records, documentation regarding sale of or dividends from a business, documentation regarding gifts or inheritance, and documentation regarding securities or real estate transactions.
Q. Must the EB-5 investment result in the creation of employment for U.S. workers?
A. Each EB-5 investor’s capital investment of US$500,00 or US$1,000,000 must create full-time employment for at least 10 U.S. citizens or immigrants(permanent resident aliens and other specified immigrant categories). The required 10 positions cannot include the investor or the investor’s spouse or children. The 10 jobs must be for employees of the enterprise in which the investment is made and cannot include independent contractors. However, for USCIS designated Regional Centers, the creation of employment can include indirect and induced employment.
Q. When must the employment be created?
A. The EB-5 petition must document that the required 10 jobs will be created within a 2 1/2 year period immediately following the approval of the EB-5 petition.
Q. In the Sunbelt EB-5 Regional Center the Investment Structure deployed is a Limited Partnership (LP) What is a Limited Partnership?
A. A limited partnership is a business organization with one or more general partners, who manage the business and assume legal debts and obligations, and one or more limited partners, who are liable only to the extent of their investments. Limited partners also enjoy rights to the partnership's cash flow, but are not liable for company obligations.
Q. What role does a limited partner play in the LP arrangement?
A. The EB-5 regulations require involvement in management or policy making. The regulations deem a limited partner in a limited partnership, which is properly structured and that conforms to the Uniform Limited Partnership Act as sufficiently engaged in the EB-5 enterprise.
Q. How is the EB-5 investor’s limited partnership interest protected?
A. The USCIS requires that some financial risk be involved so the Regional Center cannot guarantee the return, but the Center will make all best efforts to minimize the amount of risk by making sure that the investment is properly collateralized and that the partnership is in strong financial standing. Our Regional Center will recommend investment opportunities to a partnership only after an extensive financial and project review. All limited partners will receive periodic reports with financial and partnership information. A limited partner can contact the General Partner (a Sunbelt affiliate) to request any partnership information.
Q. If the EB-5 investor decides to invest in one of Sunbelt’s EB-5 Regional Centers projects, how do they submit their investment funds to Sunbelt?
A. In the Sunbelt’s specific project offering documents, our Center provides a copy of an escrow agreement and the wire transfer instructions to the escrow bank account. Within 48 hours of your wire transfer, our office will receive a remittance confirmation for your records. A copy of the remittance confirmation is provided to you and is included as part of your I-526 petition.