Investment-based immigration

Padilla Law assists high net worth individuals and entrepreneurs who desire to reside in the United States implementing their business ideas and developing and directing their U.S. enterprises.

A. Investment-based immigrant visa

The EB-5 immigrant visas grant a two-year conditional residency to individuals seeking permanent residence based on their investment and active involvement in a new U.S. commercial enterprise which created 10 full-time jobs over the period of two years. These visas are also available for the investors’ immediate family members (spouse and unmarried children under 21 years old). Investors can qualify for an EB-5 visa in three ways:

investing $1,050,000 in a commercial enterprise operating anywhere in the US;
investing a reduced amount of $800,000 in enterprises located in rural areas (with populations of less than 20,000), or in Targeted Employment Areas (“TEA”) – areas with unemployment rates at 150 percent or more of the national unemployment rate, or in infrastructure projects;
Under a so-called “Immigrant Investor Pilot Program”, investing in “regional centers” i.e., large projects which combine EB-5 investor’s funds with other sources of financing and either directly or indirectly create ten full-time jobs per each EB-5 investors. Many regional centers are set up to qualify for the reduced amounts of EB-5 investments.

10,000 immigrant visas are set aside annually for the EB-5 program, with 3,000 of these reserved for the Immigrant Investor Pilot Program. (8 U.S.C. 1153 (b)(5)).

Unlike the E-2 investor visa which requires a treaty of foreign commerce and friendship between the U.S. and foreign national’s home country, the EB-5 enables people from any country (including China, India, Brazil, Russia and Venezuela) to immigrate to the U.S. provided they have the required funds to invest here in a business enterprise to create jobs in the US.

The immigrant investor is required to invest his or her own capital. “Capital” does not mean only cash and considers the many ways in which a person can contribute assets of financial value to a business. Capital can include the immigrant investor’s promise to pay (a promissory note) if the immigrant investor is personally and primarily liable for the promissory note debt and his or her personal assets adequately secure the note. 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.

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The required investment amounts of $1,050,000 or $800,000 will automatically increase on January 1, 2027, and every 5 years thereafter. Other important elements of the petitions for EB-5 visas are as follows:

The enterprise must be new (formed after November 29, 1990) and it must be a commercial enterprise. An enterprise formed before this date may qualify if an investor “restructures” or “expands” an existing business. Regardless of methods used to create a “new” enterprise, the focus of the law is on the creation of at least 10 incremental employment opportunities. Investments creating a new enterprise but failing to create 10 new jobs will fail to qualify for EB-5 classification. In addition, “new commercial enterprise” does not include noncommercial activity, such as owning and operating a personal residence or nonprofit enterprise.
To show that the petitioner has invested or is actively in the process of investing, the petition must be accompanied by evidence that the entire capital amount has already been invested and is at risk in the commercial enterprise at the time of the petition.
The petitioner must have legally acquired the funds invested, including being in legal immigration status if funds are eared or acquired in the U.S. To establish that capital used in the new enterprise was acquired by legitimate means, the following types of documentation may be filed: (1) foreign business registration records; (2) personal and business tax returns, or other tax returns of any kind filed anywhere in the world within the previous five years; (3) documents identifying any other lawful source of money (e.g., inheritance). Documents from China and Russia are under high scrutiny.
To show that his or her investment will create at least 10 full-time positions for US workers, i.e. U.S. citizens, lawful permanent residents, and H-1B visa holders; jobs must be full-time : 35 hours minimum, part-time employees do not count, but two employees are allowed to share one full-time position; petition must be accompanied by one of the following:

Photocopies of relevant tax records, Forms I-9, or similar documents for 10 qualifying employees; or
A comprehensive business plan showing the need for at least 10 qualifying employees, and when the employees will be hired.

The petitioner must be involved in the day-to-day managerial control of the new commercial enterprise. This requirement may be evidenced by: (1) a comprehensive job description for the petitioner; (2) evidence that the petitioner is a corporate officer or on the board of directors; or (3) evidence that the petitioner is involved in direct management activities or policy-making activities of the new commercial enterprise.
EB-5 enterprise may not promise to repay the investor or return his/her EB-5 qualifying capital contribution.

EB-5 visas may be issued to investors in a troubled business enterprise, in which case the criterium of approvability is the maintenance of the pre-investment number of employees for at least 2 years following the investment. A troubled business enterprise must have existed for at least two years and must have incurred a net loss of 20% of its net worth for the 12-to-24-month period prior to the visa application.

B. Investment-based nonimmigrant visas

1. E-1 – Treaty trader

E-1 visa allows foreign companies and their employees to come to the U.S. to buy and sell their products and services. Treaty Trader (E-1) visas are for citizens of certain countries with which the United States maintains treaties of commerce and navigation or foreign trade agreements, such as NAFTA. For example, currently the national of the following Latin American countries are eligible for an E-1 visa: Argentina, Bolivia, Chile, Colombia, Costa Rica, Honduras, Mexico, and Paraguay.

A foreigner must be coming to the United States to engage in substantial trade, including trade in services or technology, in qualifying activities, principally between the United States and the treaty country.

The following are main requirements for an E-1 visa:

Applicant must be a citizen of a treaty country.
The trading firm for which the applicant plans to come to the United States must have the nationality of the treaty country, meaning persons with the treaty country’s nationality must own at least 50 percent of the enterprise.
The international trade must be substantial, meaning that there is a sizable and continuing volume of trade.
More than 50 percent of the international trade involved must be between the United States and the treaty country.
Trade means the international exchange of goods, services, and technology. Title of the trade items must pass from one party to the other.
Applicant must be an essential employee, employed in a supervisory or executive capacity, or possess highly specialized skills essential to the efficient operation of the firm. Ordinarily skilled or unskilled workers do not qualify.

The volume of trade is more important than the dollar amount of trade. For example, it is better to have a sale of 1,000 widgets, $1 each, than to sell one machine for $1,000.

2. E-2 – Treaty investors

E-2 visa allows investors to open and operate their business in the U.S. Treaty Investor (E-2) visas are for citizens of certain countries with which the United States maintains treaties of commerce and navigation or bilateral investment treaties. Currently, the nationals of the following Latin American countries qualify: Argentina, Chile, Colombia, Costa Rica, Ecuador, Honduras, Mexico, Panama, and Paraguay.

The main requirements of an E-2 visa are as follows:

Applicant is a citizen of an E-2 treaty country.
If the investor is a foreign business entity, the entity is organized under the laws of the same E-2 treaty country as the applicant’s nationality and at least 50 percent of the business must be owned by persons with the treaty country’s nationality.
E-2 investor has either invested or is actively investing a substantial amount of capital in a bona fide enterprise in the United States, or
E-2 applicant is coming to either to develop and direct a U.S. enterprise where he/she has invested or is coming to work as an executive or essential employee of an E-2 qualifying U.S. business. Ordinarily skilled and unskilled workers do not qualify.
Applicant Intends to depart from the United States upon the termination of the E-2 status.
Investment funds and assets must be at risk in the commercial sense.
The investment must be substantial, with investment funds or assets committed and irrevocable. For purposes of example only, investment into a consulting company might require less funds compare to investment into a gas station. It must be sufficient to ensure the successful operation of the enterprise. Uncommitted funds in a bank account or similar security are not considered an investment.
Source of investment funds must be lawful and must be either a property of the E-2 investor or if borrowed, must be secured by the property of the E-2 investor. Funds borrowed and secured with the assets of the E-2 qualifying enterprise is not an eligible source.
The U.S. E-2 qualifying business enterprise must be a real operating enterprise, an active commercial or entrepreneurial undertaking. A paper organization, speculative, or idle investment does not qualify.
The U.S. E-2 qualifying business must not be a marginal enterprise. A marginal enterprise is an enterprise that does not have the present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his or her family.

Spouses of E-1/E-2 holders are allowed to work for any U.S. employer, and the minor children can be enrolled in U.S. public schools.

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