EMPLOYMENT CREATION ALIENS

EB-5 INVESTORS

GENERAL REQUIREMENTS

An Investor, his spouse and his children under the age of twenty-one (21) can obtain permanent residency status in the United States if certain specific legal requirements are met. However, the Investor's and his family members' permanent residency status is conditional for a two-year period.

After the two year period, the Investor must remove the conditional basis for permanent residency status. This is done by filing a petition to remove the conditions to permanent residency status within the ninety day period preceding the second anniversary of the conditional "Green Card's" issuance. The petition and necessary documentation submitted with the petition must demonstrate that the Investor fulfilled all investment requirements. Failure to file the petition within the ninety day period will result in the automatic termination of the Investor's and his family's permanent resident status. Deportation proceedings often follow such terminations.

If the Investor fulfilled all investment requirements required for removal of conditions, the Immigration Service can waive the Investor's interview and approve the Investor's petition. If the Immigration Service is not satisfied that the Investor satisfied the requirements necessary to remove the conditional permanent residency status, the Immigration Service will set a date to conduct the Investor's interview. If the Investor does not appear for the scheduled interview, the Investor's and his family members' permanent residency status will automatically be terminated as of the second anniversary of the date on which the Investor and his family members obtained permanent residency status.

The specific legal requirements for obtaining permanent residency status through investment are:

An Investor must establishes a "new commercial enterprise" on or after November 29, 1990. A "commercial enterprise" may consist of (a) the creation of an original (new) business; (b) the purchase of an existing business and its simultaneous or subsequent restructuring or reorganization, such that a new commercial enterprise results; (c) the expansion of an existing business through the investment of the required amount of capital, so that a substantial change results. A substantial change means at least 140% increase in the number of employees or net worth of the company; or (d) investment of the required amount of capital in a troubled business, such that the number of existing employees is maintained at the pre-investment level for a period of at least two (2) years.

The commercial enterprise may take the form of any for-profit activity formed for the ongoing conduct of a lawful business, including a corporation, limited liability company, limited or general partnership, sole proprietorship, joint venture, holding company (including wholly-owned subsidiaries), business trust, etc. Noncommercial activities, such as owning personal residence, do not apply.

An Investor must invest or actively be in the process of investing US$1,000,000 in the enterprise, or US$500,000 for rural and high unemployment areas. The investment capital may consist of cash, equipment, inventory and indebtedness secured by the Investor's personal assets provided the Investor is personally and primarily liable and the new commercial enterprise's assets are not used to secure the debt. In addition, the Investor must demonstrate that he obtained the investment capital through a lawful means.

The enterprise must create at least 10 full-time jobs for U.S. citizens, permanent residents, exclusive of the Investor's spouse and children. Full-time means 35 hours or more per week.

Multiple investors are permissible, including those not seeking permanent residency status, provided that each investor seeking permanent residency status invests the required amount of capital and creates the required number of full-time positions.

The Investor must be engaged in the management of the new commercial enterprise either through exercising day-to-day managerial control or through policy formulation and direction as opposed to maintaining a purely passive role in regard to the investment. (1) If the new enterprise is a corporation, the investor can demonstrate management by providing evidence that the Investor is an corporate officer or member of the corporate board of directors, or through a statement of the position title that the Investor has in the enterprise and a complete description of the position's job duties. (2) If the new enterprise is a partnership, either limited or general, the Investor must be involved in direct management or policy making activities. If the Investor is a limited partner and the limited partnership agreement provides the Investor with certain rights, powers, and duties normally granted to limited partners under the Uniform Limited Partnership Act, the Investor will be considered sufficiently engaged in the management of the new commercial enterprise. To ensure that the Investor (who is seeking permanent residency status) is not maintaining a purely passive role in regard to the investment, but is actually engaged in direct management or policy making activities, the Investor must not only establish that the limited partnership agreement provides him with such rights, powers, and duties, but also that he: (a) actually has exercised, or is actively in the process of exercising, those rights and powers, and (b) actually has performed, or is actively in the process of performing, those duties. (3) If the new enterprise is a limited liability company, the rules regarding partnerships, either limited or general, will most likely apply. Limited liability companies did not exist under many state laws, if any, when the Immigration Regulations regarding management of the new commercial enterprise were written. Therefore, there is no direct reference to limited liability companies in the regulations.

Finally, the current regulations and administrative case law require that a comprehensive business plan be submitted with the Investor's petition. At a minimum, a comprehensive business plan (as contemplated by the regulations) should contain a description of the business, its products and/or services, and its objectives. The plan should contain a market analysis, including the names of competing businesses and their relative strengths and weaknesses, a comparison of the competition's products and pricing structures, and a description of the target market/prospective customers of the new commercial enterprise. The plan should list the required permits and licenses obtained. If applicable, it should describe the manufacturing or production process, the materials required, and the supply sources. The plan should detail the business' organizational structure and its personnel's experience. It should explain the business' staffing requirements and contain a timetable for hiring, as well as job descriptions for all positions. It should contain sales, cost and income projections and detail the bases therefore. Most importantly, the business plan must be credible.

DOCUMENTS TO SUPPORT   PETITION

Article of Incorporation, Articles of Organization, Certificate of Merger or Consolidation, Partnership Agreement, Certificate of Limited Partnership, joint venture agreement, business trust agreement, operating agreement,  organizational minutes and by-laws, and lease agreement for the new enterprise, confirmation of bank account (indicating that the required funds have been transferred into the corporate account, or are committed to be transferred into the corporate account), or other similar organizational documents for the new commercial enterprise.

Certificate showing authority to do business in the State or municipality; such as a general excise license, corporate brochure for new enterprise, or a financial statement.  If the form of the business does not require any such certificate or the state or municipality does not issue such a certificate, a statement to that effect.

In the case of investment in an already-existing commercial enterprise, evidence that, on a date after November 29, 1990, the required amount of capital ($1,000,000 or $500,000) has been transferred to an existing business, and that the investment has resulted in a "substantial increase" in the net worth or number of employees of the business. The evidence must be in the form of stock purchase agreements, investment agreements, certified financial reports, payroll records, or any similar instruments, agreements, or documents showing the investment and subsequent, "substantial change" in either the net worth or number of employees of the business.

Bank statement(s) showing amounts deposited in U.S. business accounts for the enterprise.

Evidence of assets which have been purchased for use in the U.S. enterprise, including invoices, sales receipts, and purchase contracts containing sufficient information to identify such assets, their purchase costs, date of purchase, and purchasing entity.

Evidence of monies transferred, or committed to be transferred, to the new commercial enterprise in exchange for shares of stock (voting or non-voting, common or preferred). Such stock may not include terms requiring the new commercial enterprise to redeem it all the holder's request.

In the case of borrowed funds, evidence of any loan or mortgage agreement, promissory note, property appraisal, security agreement, or other evidence of borrowing which is secured by assets of the Investor, other than those of the new enterprise, and for which the Investor is personally and primarily liable.

Corporate, partnership, other organizational, and personal tax returns, including income, franchise, property (real, personal, and intangible), or any other tax returns filed within five years, both inside and outside the U.S., which were filed by on behalf of the Investor.

Evidence identifying any other source of capital.

Certified copies of any judgements or evidence of all pending government civil or seminal actions, governmental and administrative proceedings, and any private civil actions (pending or otherwise) involving monetary judgments against Investor from any court in or outside the United States within the past 15 years.

Relevant tax records, Form I-9, or other similar documents for ten ( 10) qualifying employees. List of employees currently on staff (including hire dates) with job titles. The Investor should confirm how many positions are full-time (that is, at least 35 hours per week). The Investor should also indicate which employees, if any are relatives and identify each relative/employee's relationship to the investor. Employee organizational chart, state or federal quarterly payroll contribution returns.

Evidence that the number of existing employees is being or will be maintained at no less than the pre-investment level for a period of at least two years. Tax records, Forms I-9, or other relevant documents for the qualifying employees, and comprehensive business plan must be submitted in support of the Applicant.

Investor's job title and description of duties.

Evidence that the Investor is a corporate officer or member of the corporate board of directors.

If a partnership or limited liability company, evidence that Investor is engaged in either direct management or policy making activities. For purpose of this provision, the rights, powers, and duties normally granted to limited partners under the Uniform Limited Partnership Act will qualify an Investor.

DOCUMENTS TO SUPPORT PETITION TO REMOVE CONDITIONS TO PERMANENT RESIDENCY STATUS

Evidence that a commercial enterprise was established by the Investor and carried on business throughout the two year conditional period; and that the Investor invested or was actively in the process of investing the requisite capital throughout the two year conditional period. Such evidence may include, but is not limited to, and audited financial statement, federal or state income tax returns, federal or state quarterly tax statements, or other probative evidence.

Evidence that the Investor created or can be expected to create within a reasonable time ten full-time jobs for qualifying employees. In the case of a "troubled business," the Investor must submit evidence that the commercial enterprise maintained the number of existing employees at no less than the pre-investment level for the period following the Investor's admission as a conditional permanent resident. Such evidence my include payroll records, relevant tax documents and Forms I-9.