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VISA SPOTLIGHT: EB-5 INVESTOR GREEN CARD
Congress created the immigrant investor visa category in the Immigration Act of 1990 in the hopes of attracting foreign capital to the US and create jobs for American workers in the process. Despite Congress’ clear intentions, the INS seems to be determined to kill the program. 
First, last spring the INS General Counsel issued a highly restrictive interpretation regarding the validity of certain types of programs commonly used to set up the required business enterprises (SSHD covered this in our April 1998 newsletter: http://www.visalaw.com/98apr/23apr98.html). Second, recently the INS launched an investigation of AIS, Inc., a company responsible for aiding many people who obtained immigrant-investor visas (http://www.visalaw.com/99jan/35jan99.html). Nevertheless, with careful planning, the EB-5 investment visa can still be obtained.
The EB-5statute requires that the immigrant invest  million in capital (in some circumstances described below, 0,000 is an acceptable investment) to establish a new commercial enterprise. The investment may also be made in established but troubled businesses provided that the investment makes a significant change in the structure and function of the business and the applicant can show at least ten existing jobs. The regulations provide a number of additional definitions and specifications:
 
"Capital," for purposes of determining if an investment meets the 0,000 or ,000,000 threshold, includes cash, equipment, inventory, other tangible property, and cash equivalents. Indebtedness secured by assets owned by the applicant may be considered capital, provided that none of the assets of the new business enterprise are used to secure the debt. All capital must be derived by lawful means. 
A "commercial enterprise" may take the form of any traditional business organization, whether publicly traded or privately held. The definition may include a holding company and its subsidiaries, provided that each subsidiary is engaged in a lawful, for profit business. 
"Invest" means to contribute capital. Capital contributed in exchange for a note, bond, convertible debt, obligation, or other debt arrangement between the applicant and the business enterprise is not considered an investment. 
A "troubled business" is one that has been in existence for at least two years and has incurred a net loss (as determined by generally accepted accounting principles) for the 12 or 24 month period prior to the applicant’s priority date, if such loss is at least equal to twenty percent of the business’s net worth prior to the loss. 
When multiple investors are involved, each investor petitioning for a visa must invest the required amount, and each investment must lead to the creation of ten full-time jobs. 
A new commercial enterprise is either 
The creation of an original business 
The purchase of an existing business if reorganization results, or 
The expansion of an existing business by investment of the required amount of capital is it creates a substantial change in the net worth or number of employees. A substantial change is an increase of 40%, so that the post-expansion net worth or number of employees is at least 140% of the pre-expansion level. 
The following evidence that must be submitted with the EB-5 petition: 
Evidence to show that a new commercial enterprise has been established, such as articles of incorporation, business license, or evidence of the transfer of the required amount of capital when purchasing an existing business. 
Evidence that the proper amount of capital has been placed at risk, such as bank statements showing the deposit of funds into the business’s account, evidence of equipment purchased for use in the business; evidence of property transferred to the business, and evidence of money transferred to the business in exchange for shares of stock. This stock cannot include terms requiring the business to redeem the stock at the holder’s request. 
Evidence demonstrating that the capital invested was lawfully gained, such as foreign business registrations, tax returns, or certified copies of criminal or civil judgments, where appropriate. 
Evidence that the investment has created at least ten full-time jobs, such as tax records, Forms I-9, or if employees have not yet been hired, a detailed business plan demonstrating that the nature of the business will require the hiring of ten employees within two years. If the business is a troubled business, the applicant must submit evidence that the currently existing number of employees will be maintained for at least two years. 
Evidence that the investor will be engaged in the management of the enterprise, such as evidence that the applicant is a corporate officer or member of the board of directors. If the business is a limited partnership, the applicant will be considered to have a management position only if the partnership agreement provides that the applicant will have the rights, powers and duties normally granted to limited partners under the Uniform Limited Partnership Act.