Important: The information contained herein is illustrative, not exhaustive, is intended as broad introductions to the subject matter discussed herein, and should not be viewed as legal advice. Readers are urged not to act on the information contained in this article but to consult with an attorney.


The EB-5 Immigrant Investor Visa provides a method of obtaining a green card for foreign nationals who invest money in the United States. It was created by the Immigration Act of 1990. To obtain the visa, foreign individuals must have invested, or are actively in the process of investing, $1,000,000 (or at least $500,000 in a "Targeted Employment Area[1]" or rural area), creating or preserving at least 10 jobs for U.S. workers excluding the investor and his/her dependents. Investments can be made directly in a new commercial enterprise, in an existing troubled business in which jobs will be preserved, in an enterprise which will expand to 140% of pre-investment net worth or number of employees, or in a "Regional Center." Other than in the case of Regional Center, the alien investor is required to be actively involved in the management of the new commercial enterprise and to directly create jobs.

If the alien investor's application is approved, the investor and his/her dependents will be granted conditional permanent residence valid for two years. Within 90 days before the conditional permanent residence expires, the investor must submit evidence documenting, among other things, that the full required investment has been made and that 10 jobs have been preserved or created, or will be created within a reasonable time period.

10,000 EB-5 visas are reserved per year. Among them, 3,000 visas are reserved for aliens who invest in Targeted Employment Areas (TEAs), and 3,000 visas are reserved for aliens who invest in commercial enterprises affiliated with Regional Centers.


Immigrant Investor Pilot Program ("Pilot Program") was created in 1992 by Section 610 of Public Law 102-395, and has been extended through Sept. 30, 2012. It is widely expected that the Pilot Program will be extended beyond Sep. 30, 2012.

EB-5 visa requirements for an alien investor under the Pilot Program are essentially the same as in the standard EB-5 investor program described above, except that the Pilot Program provides for investments that are affiliated with a legally established entity known as a "Regional Center."

A Regional Center provides alien investors with a more flexible concept of job creation requirement, including both "indirect" and "direct" jobs. It also allows alien investors to be eligible for a green card without having to be actively involved in the management of the enterprise.

Essentially, therefore, a Regional Center is a third party-managed investment vehicle (private or public), which collects investors' capital and assumes the responsibility of creating the requisite jobs. A Regional Center may charge an annual, quarterly or monthly administration fee for managing the investor's investment.

With respect to job creation, direct jobs are actual identifiable jobs for qualified employees located within the commercial enterprise into which the EB-5 investor has directly invested his/her capital. Indirect jobs are those jobs shown to have been created collaterally or as a result of capital investment in a commercial enterprise affiliated with a Regional Center by an EB-5 investor. The determination of direct/indirect jobs is based on the evaluation by USCIS of a business plan and associated detailed economic analysis during Form I-526 petition adjudication.


Forming and maintaining a Regional Center ("RC") is a team work. The organizer must work with corporate and securities attorneys, immigration attorneys, accountant, consultants and marketers.

The organizer generally needs to form a new legal entity, which will act as the petitioner for an RC designation. This way, the organizer's existing business assets and liabilities are severed from those of the new entity (the petitioner) and the investors' funds will be isolated in the new entity. In practice, an investor would need to sign a subscription agreement and commit his/her investment in an escrow account (normally, an attorney escrow account designated for this new entity) subject to release upon USCIS's approval of the new entity as an RC.

There is no requirement that the petitioner or the organizer needs to have certain level of capital. The petitioner, however, must demonstrate that it has the expertise and skill to maintain and manage an RC.

An RC can be set up anywhere in the United States. If an RC is formed in a Targeted Employment Area or in a rural area, its investors are eligible for a green card with only $500,000 of investment.

The petitioner seeking the "Regional Center" designation from USCIS must submit a proposal, supported by economically or statistically valid forecasting tools, showing:

  • How the RC plans to focus on a geographical region within the United States. The proposal must explain how the RC will promote economic growth in that region.
  • How, in verifiable detail, jobs will be created directly or indirectly through capital investments made in accordance with the RC's business plan and investment strategy.
  • The amount and source of capital committed to the RC and the promotional efforts made and planned for the business project.


Each approved RC is subject to annual RC reporting requirements. It must report to USCIS RC-related activities for the preceding fiscal year, its performance, among other things. If an RC no longer serves the purpose of promoting economic growth, improved regional productivity, job creation and increased domestic capital investment, USCIS can terminate the Regional Center designation. If a designated RC is terminated, an appeal of the USCIS decision can be made by the timely filing of Form I-290B, Notice of Appeal or Motion, along with the $630 fee to the office that issued the adverse decision. In order to avoid termination, the RC manager should do the following:

1. Diligently implement business plan and achieve business objectives (including direct or indirect job creation) ideally within 2 years but no later than 4-5 years.

2. The investors' money must be 100% used in the RC's investment projects and thus job creation, and cannot be used for any other purposes. Therefore, the RC manager must not use the investors' funds for the RC's day-to-day administrative expenses or fund raising expenses. The manager should have a careful book-keeping and accounting practice.

3. Investor Protection: The RC manager must be mindful of U.S. securities laws related to investor protection, including regulations on fraud.

For further discussion of the issues addressed in this memorandum, please contact our attorneys.

[1]A Targeted Employment Area is a high unemployment area, with an unemployment rate that is at least 150% of the national average.

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