In this week’s episode, BAL’s Kristi Ngo explains why the EB-5 visa is a viable alternative to the traditional PERM green card process for certain foreign investors, plus the latest immigration news from the U.S. and around the world.

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Episode 87 – EB-5 Visa: The PERM Alternative for Investors

This episode of the BAL Immigration Report is brought to you by BAL, the corporate immigration law firm that advances human achievement through immigration expertise, client-focused customer service and innovative technology. For more information, visit BAL.com.

In this week’s episode, BAL’s Kristi Ngo (PRONUNCIATED “NO”) explains why the EB-5 visa is a viable alternative to the traditional PERM green card process for certain foreign investors, plus the latest immigration news from the U.S. and around the world.

I’m Rebecca Sanabria and I’m from Dallas, Texas.

Headlights

Since its introduction by the U.S. Department of Labor in 2005, the Electronic Review Management Labor Certification program (commonly referred to as PERM) as a job-based path to a green card has become an increasingly complicated and lengthy process.

However, there are alternative options for certain foreign nationals seeking lawful permanent residency. The EB-5 visa is one of them.

The EB-5 Immigrant Investor Program was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Investors can also qualify for the EB-5 classification by investing through officially designated regional centers.

Kristi Ngo, an associate attorney at BAL’s Los Angeles office and a regular contributor to EB-5 Investors Magazine, joined BAL Immigration Report to discuss what makes the EB-5 visa a great alternative to PERM and other program foundations.

Non-governmental organization: The EB-5 visa can be a great option compared to all other green card options. Now, the Diversity Lottery is purely a matter of luck and the foreign national may not have immediate relatives in the US or may not work in the US. For some who do, such as Indian citizens, the EB-5 visa can be a much shorter path to the green card than, say, the PERM categories EB-2 and EB-3, for which they probably had to wait more than 10 years.

The EB-5 visa is a green card option for foreign nationals based on U.S. investment rather than U.S. employment or family ties. EB-5 requires an investment of $800,000 or $1.05 million in a U.S. business that creates at least 10 jobs for U.S. workers.

The required investment amount depends on the location of the project or the type of project. Investments in a U.S. company located in a rural area or an area with high unemployment or in an infrastructure project are eligible for the lower investment amount of $800,000. The investor must also prove that the investment funds come from a legitimate source.

The EB-5 program is a three-step process. The first step is called I-526. It is the application that creates the basis for the Green Card. In the I-526 you show the project and the source of funding. This can take between one/one and a half and four years – although in my experience it is one of the shorter processing times.

The second step is consular processing or applying for adjustment of status. They apply for adjustment of status, which is done through Form I-485 if the alien is in the United States at the time of application. Otherwise, they apply for the U.S. immigrant visa through the U.S. consulate abroad. These processing times vary depending on which form the investor submits to obtain their green card. The investor will initially receive a two-year conditional green card before that conditional green card expires.

They must submit another application, called an I-829, to prove that they made the investment and that the project actually created the required number of jobs. Currently, the I-829 application process can take two to five years.

In fiscal year 2023, a total of 8,506 EB-5 visas were issued through the consular process, a significant increase of 23.6% over fiscal year 2022.* Ngo listed the major investor countries and discussed reforms that helped increase foreign investment and curb fraud.

Non-governmental organization: The most popular countries for EB-5 applications are China, India and Vietnam. India and China currently receive the most EB-5 visa applications, with China by far the most applications. Vietnam used to have a backlog, a visa backlog that it has now caught up with.

The Reform and Integrity Act, which took effect in 2022, brought major changes to the EB-5 program. One of the biggest changes at the time was the five-year term limit on the Regional Center Program. Previously, the Regional Center Program was tied to the annual federal budget, which was often simply pushed back months. So many EB-5 practitioners and investors never knew when the program would end and rushed to submit an EB-5 application before the Regional Center Program was no longer available. The five-year term gave practitioners and investors that certainty about how long the program could run.

In addition, the RIA allowed investors to apply for adjustment of status via Form I-485 at the same time as their original I-526 application. Previously, they could only apply for adjustment of status after the Form I-526 had already been approved, so this would speed up the green card process by years.

In addition, the RIA imposed sanctions and protective measures against regional centers that behave badly.

One of the biggest controversies regarding EB-5 is whether there is fraud. This is something that investors have asked me about, or particularly when they google the EB-5 program, the question is “Is there fraud?” And this is where the investor has to do their own due diligence when deciding which project to invest in for the EB-5 visa.

On the other hand, if the investor makes a direct investment, there is not as much risk of fraud because he himself manages and operates his EB-5 business.

If they choose to invest, it may be a direct project led by someone they know, or it may be a regional hub project, which is a passive investment in a company that pools EB-5 capital and is often led by someone they don’t know, someone they just found online or through word of mouth.

It is extremely important for the investor to look at what kind of project it is. How long have the project owners and participants been involved in the EB-5 program? How long have they been in the commercial real estate business? What is the job cushion of the project? Who are the people involved in this project? How much money? How much capital is the regional center investing in this project? So that they themselves bring something to the table. These are the things that investors need to look at to make sure that this project will not only lead to the green card later on, but also to the return of capital when they have completed the EB-5 process.

The U.S. Citizenship and Immigration Services has announced an overall reduction in processing times – including EB-5 investor forms – during the first six months of fiscal year 2024 compared to last year. For more information on EB-5 visas, visit BAL.com.

Important immigration news

And now the most important immigration news from the USA and around the world.

This week, the Department of Homeland Security announced the implementation of the Keeping Families Together process, which grants parole to certain spouses and stepchildren of noncitizen U.S. citizens on a case-by-case basis.

DHS estimates that 500,000 spouses and 50,000 stepchildren of noncitizen U.S. citizens could meet these eligibility criteria.

If paroled, these noncitizen spouses and noncitizen stepchildren of U.S. citizens, if they otherwise qualify, could apply for lawful permanent residency without leaving the country.

For more information, applicants can visit uscis.gov.

In world news, Indian authorities announced an extension of the visa-on-arrival policy to foreign nationals from Japan, South Korea and the United Arab Emirates.

In Canada, the government has launched the Francophone Minority Communities student pilot program to support the growth of French-speaking communities outside Quebec.

The aim of the initiative is to improve access to Canadian post-secondary education institutions for French-speaking students from Africa, the Middle East and the Americas.

Find all our news at BAL.com/news. Follow us on X at @BAL_Immigration. And sign up at BAL.com/newsletter to receive daily immigration updates in your inbox.

We’ll be back next week with more insights into the world of corporate immigration.

I’m Rebecca Sanabria. Thanks for listening.

copyright

The BAL Immigration Report is provided by BAL. Copyright 2024 Berry Appleman & Leiden LLP. All rights reserved. Digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. This report does not constitute legal advice and does not create an attorney-client relationship. For more information, visit bal.com.