Established in 1980, with Over 30 Years of PROVEN Success in All Phases of U.S. Immigration law.

IMMIGRATION THROUGH INVESTMENTS

You Do Not Need A Million Dollars to Be an Immigrant Investor

Sure, it helps to be rich. And putting those riches to work in the United States can lead to permanent residence, but it can also lead to frustration and financial ruin. Understanding how the system works is the key to gaining immigration benefits and making your investments work for you.

No, you cannot buy a green card or the right to live and work legally in the United States, not without facing a long jail sentence. But you and your family can earn the right to live in America through an investment. This investment does not have to be large and it does not have to be risky but it does have to be large enough to establish a viable business and the investment does have to be “at risk.”

An investment that is “at risk” is not the same thing as a risky investment. Although the law does impose strict requirements, there is no requirement that you lose money on your investment. There is no requirement that you lose money or pay a fortune in legal fees. The only way to minimize risk and ensure a life for yourself and your family in the United States is to understand the rules of immigration investing. There is no substitute for performing a careful investigation of any business venture before you invest. We can assist you in locating and appraising your investment, whether you are investing $100,000 or $1,000,000. And we know the rules of immigration investing.

There are two types of investment that you can make in order to obtain immigration benefits in the U.S. The smaller investments (generally between $100,000 and $500,000) can lead to a nonimmigrant visa that will allow you and your family to live and work in the U.S. It is not a green card and does not automatically lead to a green card.

The second, larger investment (starting at $500,000) does result in a green card for you and your family (including your spouse and any children under 21 years of age.) Both types of investment have many requirements and failing to follow those requirements can result in denial of the application and later, in revocation of a visa.

RULES, RULES, RULES. YOU HAVE TO KNOW THE RULES!

E-2 TREATY INVESTORS

We are going to start with the rules for nonimmigrant E-2 Treaty Investors with our new friend, Igor. He is a Ukrainian podiatrist who has grown tired of examining frozen feet. He has managed to set aside $100,000 from his practice. He is married with two children, ages 19 and 15. He is currently visiting his brother in America while his wife remains home in the Ukraine with the children.

While visiting his brother in Florida, Igor is browsing the local newspaper and finds several business for sale, including a shoe store that specializes in orthopedic shoes that is selling for $100,000, a convenience store that is selling for $250,000, and an on-line medical supply company that is selling its inventory for $95,000. Will Igor qualify for an E-2 status for any of these investments?

Understanding the Rules

The E-2 Treaty Investor status requires:

  1. The investor must be a citizen of a country on the investment treaty list. The list of countries is provided below.
  2. The investment must be “spent.” It cannot be sitting in a bank account (unless it is placed in an attorney escrow account.) You need to actually buy the business. If your investment consists of merchandise you are transferring to the US, the goods must be shipped and received in the US. If you are investing in a start-up business, you must have spent the money on business expenses such as: rent, inventory, equipment, professional services, payroll, and insurances.
  3. The investment must be in an active business and must be large enough to convince the immigration officer or consular official that you will be owning and operating a viable business. It does not need to be a large business. In some circumstances, less than $100,000 in a pretzel route may work, but investing $750,000 in a private home or Microsoft stock will not. The idea is to invest in an ongoing business that, within a reasonable period of time, will create jobs for US workers.
  4. The investor must own at least 50% of the business and must control the operation. You must be the individual who has ultimate control over the business. This does not mean you must work the cash register or report for work every day; it does mean you must understand the operation of the business and have real input in its operation.

Because of the importance of the treaty country requirement we list the countries. They currently include:

Albania, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belgium, Bolivia, Bosnia and Herzegovina, Bulgaria, Cameroon, Canada, Chile, China (Taiwan), Colombia, Congo (Brazzaville), Congo (Kinshasa), Costa Rica, Croatia, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Grenada, Honduras, Iran, Ireland, Italy, Jamaica, Japan, Jordan, Kazakhstan, Korea (South), Kosovo, Kyrgyzstan, Latvia, Liberia, Lithuania, Luxembourg, Macedonia, the Former Yugoslav Republic of (FRY), Mexico, Moldova, Mongolia, Montenegro, Morocco, Netherlands, Norway, Oman, Pakistan, Panama, Paraguay, Philippines, Poland, Romania, Serbia, Senegal, Singapore, Slovak Republic, Slovenia, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Thailand, Thailand, Togo, Trinidad & Tobago, Tunisia, Turkey, Ukraine, United Kingdom, Yugoslavia

So our Ukrainian friend Igor, in the example above, can invest in any of the three businesses. He is a citizen of a treaty country and any of the three investments might be sufficient to satisfy the consulate. Igor will need to investigate all three business and develop a business plan that will convince the consulate that he will be investing in a viable business that will do more than earn a minimum income for himself and his family.

EB-5 IMMIGRANT VISAS

In our experience, there are few areas of immigration law that generate more questions and more misunderstandings than the EB5 investments. These investments of $500,000 or more must be in a business enterprise that will generate 10 or more jobs for U.S. workers during the first 2 years of temporary residence. Unlike the E-2 Treaty investor visas, the EB5 application, if approved, will result in green cards for the investor and his family. Those green cards are initially issued for two years and will be converted to permanent green cards after two years if the investor has fulfilled the requirements of the program and generated 10 or more jobs. There are two types of EB5 investments: (1) $500,000.00 in a Regional Center or in an investor owned business in a rural area or a geographic area of high unemployment or (2) $1 million in an investor owned business in any location in the United States that creates jobs for 10 U.S. workers.

Investments of $500,000

As you might imagine, most of the interest generated in the EB5 category is in these smaller investments and most of these investments are in a Regional Center. A Regional Center is an organization approved by USCIS that will take your money and use it to create 10 or more jobs, usually as part of a larger development project. You have no direct control over how the Regional Center uses your money- you basically write them a check and go away. The Regional Center will assist in the preparation of the immigration applications and provide you with updates on the project and the status of your investment. USCIS has approved over 400 Regional Centers around the U.S. Some have a track record of success, many do not. It is therefore critical that your attorney or business advisor perform a “due diligence” assessment to help you select the right Regional Center, but even with the best appraisal, it is possible to lose all or most of your investment without getting a green card.

Not all $500,000 investments must be in a Regional Center. The law permits you to invest in you own business as long as it is located in an area of high unemployment, as determined by the state labor department where you will be investing. Determining where these areas are located is critical to the investment and not always an easy thing. A skillful attorney can work with the labor department to define areas of high unemployment that might seem surprising and counter intuitive.

We believe the key to making these $500,000 investments work, is to match the right investor with the right investment. Sometimes that means a Regional Center, sometimes that means investing in a franchise operation with a history of success, and sometimes that means helping to start a business that can bring financial success to you and your family.

$1 Million Investments

One million dollar investments are fairly rare these days, particularly with the popularity of the Regional Centers and the easing of certain restrictions in defining rural areas and areas of high unemployment. The investment can be in any area of the United States and any type of business but the requirement of creating 10 or more US jobs still remains. This requirement means the investor must create 10 new jobs, not merely maintain existing jobs, and the government is very strict in interpreting these rules.

A few additional things to keep in mind about the EB5:

  1. The investor must document the source of the funds very carefully. This means demonstrating a history of employment and/or investment through bank account, payroll records, investment accounts, etc. If the money (or any part of it) has come through the sale of a residence or business, this too must be clearly documented.
  2. Unlike the E-2 nonimmigrant Treaty Investor visa, the EB5 investor can be from any country.
  3. If the investor will be investing in his own business (rather than a Regional Center) he or she must own at least a 50% interest in the business and direct the operation of the business, like the E-2 investor.

Every phase of the investment must be carefully documented, including bank statements, tax returns, payroll records, wire transfers, corporate organization papers, business leases, etc.

Unless you are investing in a Regional Center, it is almost impossible to prepare a successful application without a detailed business plan.

Frequently Asked Questions

Q. How much money will I need to invest?

The E2 Treaty Trader rules require that an investor make a "substantial investment" but does not define what is meant by "substantial." In practice, both USCIS and the U.S. State Department (through its consulates) approve investments of $100.000 to $150,000 if the investment is sufficient to establish or maintain a viable enterprise. (And USCIS is more willing to approve even smaller investments of between $75,000 and $100,000) This means that an investment of $75,000 might be sufficient for a grocery store or small convenience store, but insufficient to start up a construction company. Also note that it is not necessary to invest money. An investment of inventory can be sufficient where, for example, you are setting up a retail store to sell goods manufactured abroad.

For the EB5, the requirements are more regimented: either $500,000 in a Regional Center or Targeted Area of high unemployment or $1 million in any viable commercial enterprise anywhere in the US.

Q. What countries qualify for Treaty Trader status?

As of January, 2014, the list includes citizens of the following countries:

Albania, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belgium, Bolivia, Bosnia and Herzegovina, Bulgaria, Cameroon, Canada, Chile, China (Taiwan), Colombia, Congo (Brazzaville), Congo (Kinshasa), Costa Rica, Croatia, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Grenada, Honduras, Iran, Ireland, Italy, Jamaica, Japan, Jordan, Kazakhstan, Korea (South), Kosovo, Kyrgyzstan, Latvia, Liberia, Lithuania, Luxembourg, Macedonia, the Former Yugoslav Republic of (FRY), Mexico, Moldova, Mongolia, Montenegro, Morocco, Netherlands, Norway, Oman, Pakistan, Panama, Paraguay, Philippines, Poland, Romania, Serbia, Senegal, Singapore, Slovak Republic, Slovenia, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Thailand, Thailand, Togo, Trinidad & Tobago, Tunisia, Turkey, Ukraine, United Kingdom, Yugoslavia

You will notice that the list makes no sense. It includes Iran but not Brazil, India, Russia or China. We have no explanation but if your country is not on the list, you cannot qualify for an E2 visa.

Q. What kinds of businesses are best to invest in?

Although there are no "good businesses" (and plenty of "bad businesses") the rules require that the investment be in an "active" business that creates at least one job for a U.S. worker within five years for the E2 and 10 full time jobs within 2 years for the EB5. This means that the money cannot be "passively" invested in the stock market or in unproductive real estate, but it can be invested in any type of business including a franchise operation, a convenience store, travel agency, delicatessen, grocery, bakery, Laundromat, or the sale of retail or wholesale merchandise as long as the business creates the right number of jobs.

Q. Where do I find a list of successful Regional Centers or franchises?

You don’t. USCIS does not publish a list of approval rates for Regional Centers. We suggest you either contact an experienced EB5 attorney, a friend or colleague who has been through the process, or contact as many of the Regional Centers on the USCIS approved list as possible. That list can be found at: http://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/immigrant-investor-regional-centers. But remember, the list includes over 400 Centers.

As for franchises, the task is somewhat easier because there are organizations available, including the U.S. Small Business Administration, which publishes lists of default rates for franchise owners. The higher the default rate, the more difficult it is for borrowers to make a profit.

Q. Should I invest in a new business or purchase an existing business?

Either business will qualify as long as it is viable and will provide employment for the required number of workers. The EB5, however, is more restrictive in that the business must create 10 new jobs- not merely retaining 10 workers already on the payroll.

Q. Should I be in the U.S. or abroad when I file the treaty investor application?

If you are in the U.S. in legal status, you can apply for a change of status to E2 Treaty Investor or EB5 immigrant status. If you leave the U.S. however, you must await approval of the visa at a US consulate before returning to the US and the processing times at the consulate may take many months. For this reason, many investors prefer to apply initially in the US.

Q. If I am outside the U.S. will the U.S. consulate issue me a visitor’s (B1/B2) visa to come to the U.S. to investigate the possibility of investing in a U.S. business?

There is no special visa that allows you to come to the U.S. to investigate investment opportunities. The consul may, however, issue you a visitor ("B-1") visa to come to the U.S. to take the preliminary steps necessary to set up the enterprise, such as the opening of bank accounts, setting up the corporation, signing of contracts, entering into leases and similar activities. It cannot be used to actively manage the business, an activity that USCIS will consider as "employment" in violation of your status. The consul will ask to see concrete evidence of your intention to invest, including the transfer of funds to the U.S. and correspondence with a potential business seller or broker or law firm such as ours to show your active interest.

Q. Does the money have to be mine or can I borrow it from a friend or relative?

The assets you invest must belong to you although the source of the funds can be an irrevocable gift. (For Treaty Investors, it can belong to the company you work for if your company is making the investment.) Money loaned to you by someone else cannot usually be used to qualify for an investment unless it is a loan secured by a lien or mortgage on property that you already own. The loan cannot be secured by a lien or mortgage on the business you are buying. This means that you can borrow money to buy a business in the U.S. and secure it with a mortgage on your home in London, but you cannot buy the business by putting 10% down and paying off the balance through a loan that is secured by a lien on the convenience store you are buying.

Q. Can more than one applicant apply for the same business?

Usually not. Each investor must make his or her own investment sufficient to meet the visa requirements. With some nonimmigrant E2 visas, more than one employee may qualify if the investment is through a foreign company and the business is large enough to support two or more managers or executives. If, for example, a large manufacturing business in Turkey will be investing $500,000 to open a manufacturing facility in the U.S., the company may be able to justify sending two or more executives to the U.S. to manage the operation. If you are buying a small convenience store, the investor must own at least 51% of the business and must be coming to the U.S. to manage the business. As a result, the investment will not support two people because two people cannot independently control one business.

Q. Will the E2 Treaty Trader investment allow me to obtain a green card?

Possibly. Generally, we suggest that the business in the U.S. be affiliated with a business you may have abroad as a way of making it easier to obtain permanent residency in the U.S. Alternatively, you or your spouse may be sponsored by a different employer in the U.S. under a program known as labor certification. This is a complicated procedure and one that you should discuss at length with an immigration lawyer. It is important to understand at the outset that a treaty investor visa does not automatically become a green card. It can, however, function like a green card since it is renewable indefinitely.

Q. What will happen to my immigration status if the business fails or it does not create sufficient jobs?

USCIS does not follow up on the success of your business on an ongoing basis. For the E2, you will have to renew your status every two years and at that time you will have to show USCIS that your business is viable. For the EB5, you will need to convert your temporary green card to a permanent card by filing the final application within the 90 days before the temporary card expires. In either event, you will need to submit tax returns, payroll records, and similar business records. If your business has not created sufficient jobs (or for E2, your business is not viable) extension will be denied.

Q. How do I find a business to invest in?

We can assist you through a related investment company called ImmVest America. ImmVest America can help you locate virtually any kind of business anywhere in the United States you would like to live. They will need to know the kind of business you are interested in, the amount of money you wish to invest, where you want to live and when you want to begin. Also, when you work with ImmVest America, we guarantee their work and your investment.

Q. How do I get started?

Give us a call.