Because this is a relatively new program in the history of immigration law, there are many misconceptions regarding its requirements on how an investor can use it to obtain permanent residence in the U.S. The laws stated in the Immigration and Nationality Act, Section 203(b)(5) and Section 216A and the regulations at 8 C.F.R. 204.6 and 8 C.F.R. 216.6 are somewhat vague, so practitioners must look to how the USCIS applies the laws and regulations in practice. Investors do not have to invest in areas of low unemployment, investors also do not have to use a Regional Center for their investments. Really, the only restriction is the investor must create 10 jobs and that can be flexible in terms of which types of jobs can be counted, if you are using a regional center.

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EB-5 regulations are broad and an overview cannot cover everything one needs to know. This page only provides a general overview of some of the common misconceptions. If you have specific questions, please contact us.

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​Regional Centers
Regional Centers (RC) provide the benefit of being able to count all the types of jobs created when USCIS considers whether your investment has created the requisite number of jobs. When an investor invests directly in an investment without the help of a RC, only the direct jobs will be counted. However, through a RC, the USCIS will count the indirect as well as the induced jobs created by the investment.

Even if you are interested in direct investment, you can still work with a Regional Center to ensure that your plan is put together correctly. They can help perform the economic analysis of the jobs to be created, determine the Targeted Employment Area, analyze the viability of your project, and review your business plan. Most importantly, using a regional center designation, you, as a direct investor, would also be able to count the indirect and the induced jobs created. 

Targeted Employment Area (TEA) 

Investing in a TEA provides the advantage of a lower amount of investment, $500K instead of $1 million. However, there is no need to work with a RC in order to invest in a TEA, although a RC may help you determine the TEA for USCIS.

Additionally, a TEA is not restricted to areas that are rural. As long as an area is considered to be a "high unemployment area," those in which the local unemployment rate is at least 150 percent of the national average, the area can be a TEA. Therefore, a Targeted Employment Area can exist in the city when, taking the average unemployment rate of 12 census tracts, the rate is at least 150 percent of the national average. You can see the census tracts by going to the U.S. Department of Housing and Urban Development's Website.

Investment Funds ​

The funds for your investment do not have to be immediately available. For startups, funds can come from distributions from your own business's profits. Funds can also be sales from real estate or loans secured by real estate. However, you do have to show that the funds came from your own personal assets. In the event that your funds came from your real estate transactions, you would have to prove your ownership of the real estate. An attorney can help you determine whether your source of funds is legitimate and help you prepare the extensive documentation needed for USCIS.

Job Creation

For those investors not working with regional centers, it is beneficial to note that the 10 jobs do not have to be created within 2.5 years. If you are investing in a startup business and would like to obtain your permanent residence through the EB-5 process, you would have to show that at least 10 direct jobs will be created. There is no time limit within which those jobs must be created. However, the USCIS's inquiry in the approval process then shifts to whether any jobs created are "full-time" and "permanent." Direct jobs and the full-time nature of these jobs can be proven through documentation such as pay stubs and job descriptions. 

If you are a startup business or are considering starting a business, read our blog on EB5 for Startups and Entrepreneurs for more information on how you can use the EB-5 program.

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