Category: EB-5 Investor Green Card

EB-5 Immigrant Investor Program Visa

EB-5 Immigrant Investor Program Visa Overview Since the passage of the Immigration Act of 1990, the creation of the EB-5 Immigrant Investor program has been an accessible pathway to lawful permanent residence in the United States for qualifying investors. Participation in this program allows the USCIS to grant investors conditional two year green cards, and the opportunity to apply for permanent lawful residency at the end of two years. Approximately 10,000 visas are allocated annually to the specific EB-5 category, for the particular purpose of stimulating economic growth and creating domestic jobs. As such, qualified EB-5 applicants must be able to invest $1,000,000 in a new capital enterprise, or $500,000 in a Targeted Employment Area (TEA).  Investors must be able to present a strong business plan that reasonably accounts for the creation of 10 full-time jobs for U.S. workers. The benefits of such a program can be profitable for both the financial state of the investor, as well as the residential status of the investor and their derivative family members (spouses and unmarried children under 21 years of age). Although these benefits exist, the EB-5 is a high risk investment opportunity that should be approached with caution. Investment Options USCIS requires that investors must invest in new commercial enterprises, specifically ones established after November 29, 1990. These can comprise any for-profit activity created for the purpose of conducting lawful business, and include sole proprietorships, corporations, holding companies, joint ventures, partnerships, and business trusts (both publicly and privately owned). In certain cases investors may invest in commercial enterprises established before November 29, 1990, but only under the special circumstances of either (1) a serious restructuring or reorganizing that results in a new commercial enterprise, or (2) when an expansion through investment has increased the operation’s net worth or number of employees by 40 percent. Another option is to invest in a “troubled business,” or a business that has been in existence for at least two years, but in the 12-24 months prior to the investment, it has sustained a loss of at least 20 percent of its net worth. In these latter cases, investors must often prove that they preserved 10 jobs during their two year conditional period. While 10,000 EB-5 visa numbers are made available annually, 3,000 are allocated for investment in TEAs, and 3,000 are allocated for investors affiliated with Regional Investment Centers certified by the USCIS. A TEA must either be an area with 150 percent of the national average rate of unemployment, or be considered a rural area outside of metropolitan limits with a population of less than 20,000. Regional Center Programs are geographic pools of foreign investment, used to direct funds into job-creating businesses that facilitate economic growth. In the case of investment through a regional center, each investor must be able to prove he or she has created 10 full time jobs, either directly or indirectly, within the two year conditional time frame.  Regional Center projects generally place the funds at risk into the job creating enterprise in the form of either a loan or equity. How to Apply & Prove Your Investment Applying for an EB-5 visa can be incredibly tricky, particularly when it comes to documenting the source of investment capital. It is crucial that the applicant is meticulous in his or her documentation, and provide detailed descriptions in every aspect of the application. The first step is to file the I-526 petition, which is used for both individual applicants, and those interested in Regional Center projects. There are several major requirements that must be proven through the I-526 petition, as follows: New Commercial Enterprise:
  • A new commercial enterprise is defined as a commercial enterprise established after November 29, 1990. The investor must provide evidence that the applicant has invested in a “new” business enterprise operating under the jurisdiction of the United States, or has invested in an enterprise established before November 29, 1990, with two specific criteria. The previously established enterprise must be restructured in such a way that the result is a new commercial enterprise, or able to prove the investment has facilitated a 40 percent increase in either net worth or employment.
Target Employment Area:
  • Proof that the enterprise exists in a TEA, if the investor has invested $500,000.
Funds Are At Risk:
  • Escrow agreements, statements, documentation of fund transfers, loan agreements, or any other documentation that proves the applicant is has invested, or is in the process of investing the amount required for the location of the business.
Lawful Source of Funds:
  • Extremely detailed evidence that the capital was obtained through lawful means.
Job Creation:
  • Valid evidence that the enterprise will create either 10 direct or indirect full time jobs in which employees work a minimum of 35 hours a week, for those legally authorized to be employed in the U.S.
Active Management
  • Clear documentation that the investor is active and involved in the management and decision making process for the business (less applicable for Regional Center investment).
In order for an I-526 to be approved and for the applicant to be cleared for lawful conditional residence in the United States, it is imperative that the I-526 clearly proves each of these six requirements in great detail. Once the USCIS has approved the I-526, the investor will be granted conditional permanent residence. This also applies to the investor’s derivative family members. Becoming a Legal Permanent Resident The EB-5 is first and foremost a conditional two year visa, at the end of the two-year period, the applicant must file to remove the conditions and becoming a fully lawful permanent resident of the United States. 90 days before the two year anniversary of the approval of conditional permanent resident status, the investor must file the I-829 petition. The I-829 petition must satisfy four main requirements, as follows:
  • Evidence of the investor’s establishment and ongoing functionality of a commercial enterprise.
  • Financial statements or documentation to support that the applicant actively participated in the investment of the requisite capital.
  • Proof that the investor maintained and sustained the investment throughout the entire conditional period. This could mean bank statements, tax returns, invoices, receipts, contracts, or other kinds of documentation.
  • Concrete evidence that the investor created 10 full time U.S. jobs, or is anticipating the creation of the required jobs within a reasonable time frame.
Upon approval of the I-829 petition, the investor, as well as his or her derivative family members, will become fully lawful permanent residents. In recent years, the slow economy has prompted the USCIS to become more accommodating in its consideration of EB-5 applications.This accommodation, in addition to the positive economic growth seen in the last few years,has rendered the program more attractive. Since the creation of the program in 1990, no numerical caps for EB-5 visa numbers had ever been reached until very recently. On August 23, 2014, the Department of State Immigrant Visa Control and Reporting Division announced that the EB-5 preference category for Chinese applicants had become unavailable until the start of the 2014-2015 fiscal year, which began on October 1, 2014. The increased success of this program leads investors to hope that Congress will soon raise the cap on EB-5 applications, allowing more investors to contribute to economic growth in the U.S. through this special visa program. In 2012 alone, the EB-5 investment program contributed over $3 billion dollars to U.S. GDP, and supported over 40,000 jobs. If you are considering immigrating to the United States through an EB5 contact one of our experienced immigration lawyers.

EB-5 Immigrant Investor Program Word

EB-5 Immigrant Investor Program Visa

Overview Since the passage of the Immigration Act of 1990, the creation of the EB-5 Immigrant Investor program has been an accessible pathway to lawful permanent residence in the United States for qualifying investors. Participation in this program allows the USCIS to grant investors conditional two year green cards, and the opportunity to apply for permanent lawful residency at the end of two years. Approximately 10,000 visas are allocated annually to the specific EB-5 category, for the particular purpose of stimulating economic growth and creating domestic jobs. As such, qualified EB-5 applicants must be able to invest $1,000,000 in a new capital enterprise, or $500,000 in a Targeted Employment Area (TEA).  Investors must be able to present a strong business plan that reasonably accounts for the creation of 10 full-time jobs for U.S. workers. The benefits of such a program can be profitable for both the financial state of the investor, as well as the residential status of the investor and their derivative family members (spouses and unmarried children under 21 years of age). Although these benefits exist, the EB-5 is a high risk investment opportunity that should be approached with caution. Investment Options USCIS requires that investors must invest in new commercial enterprises, specifically ones established after November 29, 1990. These can comprise any for-profit activity created for the purpose of conducting lawful business, and include sole proprietorships, corporations, holding companies, joint ventures, partnerships, and business trusts (both publicly and privately owned). In certain cases investors may invest in commercial enterprises established before November 29, 1990, but only under the special circumstances of either (1) a serious restructuring or reorganizing that results in a new commercial enterprise, or (2) when an expansion through investment has increased the operation’s net worth or number of employees by 40 percent. Another option is to invest in a “troubled business,” or a business that has been in existence for at least two years, but in the 12-24 months prior to the investment, it has sustained a loss of at least 20 percent of its net worth. In these latter cases, investors must often prove that they preserved 10 jobs during their two year conditional period. While 10,000 EB-5 visa numbers are made available annually, 3,000 are allocated for investment in TEAs, and 3,000 are allocated for investors affiliated with Regional Investment Centers certified by the USCIS. A TEA must either be an area with 150 percent of the national average rate of unemployment, or be considered a rural area outside of metropolitan limits with a population of less than 20,000. Regional Center Programs are geographic pools of foreign investment, used to direct funds into job-creating businesses that facilitate economic growth. In the case of investment through a regional center, each investor must be able to prove he or she has created 10 full time jobs, either directly or indirectly, within the two year conditional time frame.  Regional Center projects generally place the funds at risk into the job creating enterprise in the form of either a loan or equity. How to Apply & Prove Your Investment Applying for an EB-5 visa can be incredibly tricky, particularly when it comes to documenting the source of investment capital. It is crucial that the applicant is meticulous in his or her documentation, and provide detailed descriptions in every aspect of the application. The first step is to file the I-526 petition, which is used for both individual applicants, and those interested in Regional Center projects. There are several major requirements that must be proven through the I-526 petition, as follows: New Commercial Enterprise:
  • A new commercial enterprise is defined as a commercial enterprise established after November 29, 1990. The investor must provide evidence that the applicant has invested in a “new” business enterprise operating under the jurisdiction of the United States, or has invested in an enterprise established before November 29, 1990, with two specific criteria. The previously established enterprise must be restructured in such a way that the result is a new commercial enterprise, or able to prove the investment has facilitated a 40 percent increase in either net worth or employment.
Target Employment Area:
  • Proof that the enterprise exists in a TEA, if the investor has invested $500,000.
Funds Are At Risk:
  • Escrow agreements, statements, documentation of fund transfers, loan agreements, or any other documentation that proves the applicant is has invested, or is in the process of investing the amount required for the location of the business.
Lawful Source of Funds:
  • Extremely detailed evidence that the capital was obtained through lawful means.
Job Creation:
  • Valid evidence that the enterprise will create either 10 direct or indirect full time jobs in which employees work a minimum of 35 hours a week, for those legally authorized to be employed in the U.S.
Active Management
  • Clear documentation that the investor is active and involved in the management and decision making process for the business (less applicable for Regional Center investment).
In order for an I-526 to be approved and for the applicant to be cleared for lawful conditional residence in the United States, it is imperative that the I-526 clearly proves each of these six requirements in great detail. Once the USCIS has approved the I-526, the investor will be granted conditional permanent residence. This also applies to the investor’s derivative family members. Becoming a Legal Permanent Resident The EB-5 is first and foremost a conditional two year visa, at the end of the two-year period, the applicant must file to remove the conditions and becoming a fully lawful permanent resident of the United States. 90 days before the two year anniversary of the approval of conditional permanent resident status, the investor must file the I-829 petition. The I-829 petition must satisfy four main requirements, as follows:
  • Evidence of the investor’s establishment and ongoing functionality of a commercial enterprise.
  • Financial statements or documentation to support that the applicant actively participated in the investment of the requisite capital.
  • Proof that the investor maintained and sustained the investment throughout the entire conditional period. This could mean bank statements, tax returns, invoices, receipts, contracts, or other kinds of documentation.
  • Concrete evidence that the investor created 10 full time U.S. jobs, or is anticipating the creation of the required jobs within a reasonable time frame.
Upon approval of the I-829 petition, the investor, as well as his or her derivative family members, will become fully lawful permanent residents. In recent years, the slow economy has prompted the USCIS to become more accommodating in its consideration of EB-5 applications.This accommodation, in addition to the positive economic growth seen in the last few years,has rendered the program more attractive. Since the creation of the program in 1990, no numerical caps for EB-5 visa numbers had ever been reached until very recently. On August 23, 2014, the Department of State Immigrant Visa Control and Reporting Division announced that the EB-5 preference category for Chinese applicants had become unavailable until the start of the 2014-2015 fiscal year, which began on October 1, 2014. The increased success of this program leads investors to hope that Congress will soon raise the cap on EB-5 applications, allowing more investors to contribute to economic growth in the U.S. through this special visa program. In 2012 alone, the EB-5 investment program contributed over $3 billion dollars to U.S. GDP, and supported over 40,000 jobs. If you are considering immigrating to the United States through an EB5 contact one of our experienced immigration lawyers.

An International Comparison of Investor Visas

Introduction   Investment Visas have become a popular option for governments to attract wealth from overseas, in order to expand their own economies. Each country has their goals in attracting wealth, such as adding liquidity to their market, increasing real estate prices or creating new jobs. In the United States the EB-5 program, introduced in the 1980s, has seen increased demand since its inception. So much so that quota totals are being exceeded for Chinese EB-5 applicants and may result in, for the first time in the program’s history, a visa retrogression. Other countries have introduced similar programs, with a wide variety of minimum investment requirements, qualifications, and residency benefits that address the needs of each individual country. This article will compare 11 countries: the Cayman Islands, St. Kitts and Nevis, Hong Kong, Singapore, England, Ireland, Portugal, the United States, Canada, New Zealand and Australia. Their investor programs vary widely in all aspects and in relative success.  These counties will be compared according to their minimum investment and job requirements, residency requirements and benefits, and processing times. Lastly, this article will offer improvements to the EB-5 program, as much can be learned by comparing the EB-5 program to other countries’. Minimum Investment: Passive and Active  The minimum investment in nearly all investor visas depends on the type of investment one intends to make. Basic qualifications also greatly vary. They typically require that the funds were collected legally, that the investor be experienced in business, that the investor demonstrate a sound business plan and many require that the investment be made prior to or at the time of application. Investments are also typically divided into either an active or passive investment types and the minimum investment often depends on the individual’s choice between these two options. What types of investments constitute an active or passive investment varies in each country. Generally, passive investments do not require that the investor maintain oversight or directional control of the entity of which he/she is investing in. The investor receives a return from the entity as a whole, collecting earnings from his/her investment. Examples of passive investments range, from stock to real estate. Conversely, an active investment indicates that they investor will maintain direct control into the operations of the business. This allows the individual, ultimately, greater control over the kinds of returns they will see from their investment. Active investments often manifest themselves as private business of which the investor also manages. To what extent an investor must exercise control over a business varies. The EB-5 program allows for investors to be on the corporate board of directors or to become a limited partner, demonstrating the variation of what can be considered an active investment role. Certain programs have only either active or passive options. Furthermore, investment minimums may vary within those options depending on the details of each government’s program. In the United States investors can choose from two options; a passive investment into a Regional Center (approved by the USCIS) or an active investment. Both options require a minimum $1,000,000 investment or $500,000 if the investment is in a Targeted Employment Area (TEA). The United States’ $1,000,000 active investment places it competitively amongst the countries analyzed in this article. New Zealand offers an Investor Plus visa which, for 10 million New Zealand ($7,900,200 USD), waives other requirements compared to their investor visa. Canada’s investor program requires 1.6 million ($1,433,267.98 USD) and Australia requires 1.5 million ($1,314,930.00 USD). Figure 1 demonstrates the highest minimum totals for 7 of the 11 countries discussed here, and whether that investment option is active, passive or both. Figure 1 Image These totals do not represent the minimum total for the 11 countries of this article. Rather these investment totals explicate the most expensive minimums and option from each country. For example, New Zealand offers two options for Investors; the Investor Plus program, with a minimum investment total set at 10,000,000 and a regular investor option, with a minimum investment set at  1.5 million New Zealand ($1,179,675.00 USD). Figure 2 lays out the cheapest minimum investment option from each country, and whether that investment is either passive or active. Figure 2  Image Active investment options, on the whole, are cheaper than their passive counterparts, and typically, countries offer an investor choice: a cheaper, active investment option and a more expensive, passive option. Active investment options, on the whole, are cheaper than their passive counterparts, and typically, countries offer an investor choice: a cheaper, active investment option and a more expensive, passive option. Job Creation Many Investor visas also require that the new business enterprise create jobs, legally employing citizens (or those authorized to work) of that country. The EB-5 program necessitates that the investor directly employs 10 individuals, or, in the case of the regional center, 10 active or indirect jobs. These minimums vary and only occur in cases of active investment. As previously expressed, many countries have no active investment option or offer both. Figure 3 outlines which countries have job creation stipulations, the minimum jobs needed and any related time limits for the implementation of those jobs. Figure 3 Image The United States requires the most stringent job creation stipulations amongst the countries analyzed. While Portugal also requires 10 jobs created, Portugal’s cheapest investment option allows the investor to purchase real estate, which as a solely passive investment, creates no jobs. Avoiding this stipulation of job creation is rather easy and a popular choice due to the lucrative nature of real estate investment. Other countries are more ambiguous about the number for job creation. Canada, for example, requires that the business must “create jobs for 5 years.” Residency Requirements, Duration, and Benefits  Residency requirements are those stipulations of how long the applicant must live in or visit the country throughout the visa. These minimum residency requirements widely range depending on each country. The EB-5 does not require that the investor stay in the United States for any particular amount of time but one can be considered to be abandoning their visa if they leave the country for a year or more, consecutively. Others stipulate a specific minimum number of days the applicant must be in the country. New Zealand’s Investor Plus require that the applicant spend 44 days in New Zealand in each of the last two years of the three-year investment period. The total duration of each visa depends on the type of legal status one attains upon approval. The EB-5 program gives the investor a conditional 2 year green card with the opportunity, at the end of those two years, to apply for permanent lawful residency status. Most countries follow a similar model of between 1-6 years of temporary residence that can lead to permanent lawful residence and, subsequently, citizenship. Other models exist; in the Cayman Islands, the investor visa is valid for 25 years and can be renewed. In St Kitts and Nevis, one’s investment grants them instant citizenship. Figure 4 gives a succinct overview of some countries’ minimum residency requirements and the duration of their legal status. Figure 4 Image The residency benefits for each country can be hard to measure due to the specific wants or needs of the investor. For example, an investment in St. Kitts leads directly to citizenship and, with a St. Kitts passport, access to the EU as part of the Schengen area. However, investment options in St. Kitts, due to the small size of the islands, may not be appealing to certain investors. While the United States has relatively stringent minimum investment and residency requirements, the EB-5 has maintained its popularity throughout its history. Furthermore, foreign investors are often looking for safe investments, as they try to diversify their assets around the world, especially in cases where the political situation of their country of origin has been called into question. Thus benefits of each country are relative; Investors may be drawn to the direct benefits of each visa type or may have a personal preference for a specific country based on what the country itself offers, in terms of culture, security, education, economic market, and life style. Processing Times  Processing times shift and vary. In the United States, processing times are adjusted monthly, ranging in time depending on where one applies and the country of origin. How quickly one can have their application processed is of immense importance to the investor and can play a large role in what country they may invest in. Not all countries can anticipate how long the process will take, as they cannot be sure of how many applications they will receive. Canada, for example, recently began its Start Up visa category. As such, they do not have estimates for the amount of time processing will take. Figure 5 gives a picture of some processing times. Many countries do not give any information about the amount of time it will take to process their applications. Figure 5  Image Conclusions  Each investment program addresses the need of its own country. Portugal has responded to its real estate crisis of the last decade by promoting an investor program that encourages foreign investment into real estate. Other countries are concerned with drawing outside capital or bolstering certain sectors of their economy through passive capital investments. In the United States, the EB-5 program intends to create more jobs and new businesses that will employ more Americans. Investment programs, when compared, can give a view into the economic needs of the country offering it Improving the EB-5 program would not dramatically alter its emphasis on job creation, because in part, that is its intended purpose. Clearly the minimum investment totals for the EB-5 program are reasonable as they have not deterred foreign investment and the program has only grown since its inception. Thus, improving the program would require a stream lining of the application process and improving processing times, to more efficiently address the growing number of foreign investors. Furthermore, increasing quota totals would respond to the changing global economy and number of investors currently waiting to invest in the United States. The United States appeals to foreign investors for a multitude of reasons, a primary one being security. While Hong Kong has had a reported 23,176 applicants for their investment program (as of June 2014), recent political developments in China have called into question the country’s stability, which will likely hurt their program. US democracy and common law system has contributed to its perception as a good place to invest. With this inherent advantage, the EB-5 program is most greatly improved by placing greater emphasis on bureaucratic efficiency and increased quota totals, rather than a major overhaul of the entire system.

EB-5 Investor Program for foreign investors

EB-5 Investor program for Chinese Investors Since the passage of the Immigration Act of 1990, the creation of the EB-5 Immigrant Investor program has been an accessible pathway to lawful permanent residence in the United States for qualifying investors. Participation in this program allows the USCIS to grant investors conditional two year green cards, and the opportunity to apply for permanent lawful residency at the end of two years. Approximately 10,000 visas are allocated annually to the specific EB-5 category, for the particular purpose of stimulating economic growth and creating domestic jobs. As such, qualified EB-5 applicants must be able to invest $1,000,000 in a new capital enterprise, or $500,000 in a Targeted Employment Area (TEA).  Investors must be able to present a strong business plan that reasonably accounts for the creation of 10 full-time jobs for U.S. workers. The benefits of such a program can be profitable for both the financial state of the investor, as well as the residential status of the investor and their derivative family members (spouses and unmarried children under 21 years of age).

Investment Options

USCIS requires that investors must invest in new commercial enterprises, specifically ones established after November 29, 1990. These can comprise any for-profit activity created for the purpose of conducting lawful business, and include sole proprietorships, corporations, holding companies, joint ventures, partnerships, and business trusts (both publicly and privately owned). In certain cases investors may invest in commercial enterprises established before November 29, 1990, but only under the special circumstances of either (1) a serious restructuring or reorganizing that results in a new commercial enterprise, or (2) when an expansion through investment has increased the operation’s net worth or number of employees by 40 percent. Another option is to invest in a “troubled business,” or a business that has been in existence for at least two years, but in the 12-24 months prior to the investment, it has sustained a loss of at least 20 percent of its net worth. In these latter cases, investors must often prove that they preserved 10 jobs during their two year conditional period. While 10,000 EB-5 visa numbers are made available annually, 3,000 are allocated for investment in TEAs, and 3,000 are allocated for investors affiliated with Regional Investment Centers certified by the USCIS. A TEA must either be an area with 150 percent of the national average rate of unemployment, or be considered a rural area outside of metropolitan limits with a population of less than 20,000. Regional Center Programs are geographic pools of foreign investment, used to direct funds into job-creating businesses that facilitate economic growth. In the case of investment through a regional center, each investor must be able to prove he or she has created 10 full time jobs, either directly or indirectly, within the two year conditional time frame.  Regional Center projects generally place the funds at risk into the job creating enterprise in the form of either a loan or equity.

How to Apply & Prove Your Investment

Applying for an EB-5 visa can be incredibly tricky, particularly when it comes to documenting the source of investment capital. It is crucial that the applicant is meticulous in his or her documentation, and provide detailed descriptions in every aspect of the application. The first step is to file the I-526 petition, which is used for both individual applicants, and those interested in Regional Center projects. There are several major requirements that must be proven through the I-526 petition, as follows:

New Commercial Enterprise:

  • A new commercial enterprise is defined as a commercial enterprise established after November 29, 1990. The investor must provide evidence that the applicant has invested in a “new” business enterprise operating under the jurisdiction of the United States, or has invested in an enterprise established before November 29, 1990, with two specific criteria. The previously established enterprise must be restructured in such a way that the result is a new commercial enterprise, or able to prove the investment has facilitated a 40 percent increase in either net worth or employment.

Target Employment Area:

  • Proof that the enterprise exists in a TEA, if the investor has invested $500,000.

Funds Are At Risk:

  • Escrow agreements, statements, documentation of fund transfers, loan agreements, or any other documentation that proves the applicant is has invested, or is in the process of investing the amount required for the location of the business.

Lawful Source of Funds:

  • Extremely detailed evidence that the capital was obtained through lawful means.

Job Creation:

  • Valid evidence that the enterprise will create either 10 direct or indirect full time jobs in which employees work a minimum of 35 hours a week, for those legally authorized to be employed in the U.S.

Active Management:

  • Clear documentation that the investor is active and involved in the management and decision making process for the business (less applicable for Regional Center investment).
In order for an I-526 to be approved and for the applicant to be cleared for lawful conditional residence in the United States, it is imperative that the I-526 clearly proves each of these six requirements in great detail. Once the USCIS has approved the I-526, the investor will be granted conditional permanent residence. This also applies to the investor’s derivative family members.

Becoming a Legal Permanent Resident:

The EB-5 is first and foremost a conditional two year visa, at the end of the two-year period, the applicant must file to remove the conditions and becoming a fully lawful permanent resident of the United States. 90 days before the two year anniversary of the approval of conditional permanent resident status, the investor must file the I-829 petition. The I-829 petition must satisfy four main requirements, as follows:
  • Evidence of the investor’s establishment and ongoing functionality of a commercial enterprise.
  • Financial statements or documentation to support that the applicant actively participated in the investment of the requisite capital.
  • Proof that the investor maintained and sustained the investment throughout the entire conditional period. This could mean bank statements, tax returns, invoices, receipts, contracts, or other kinds of documentation.
  • Concrete evidence that the investor created 10 full time U.S. jobs, or is anticipating the creation of the required jobs within a reasonable time frame.
Upon approval of the I-829 petition, the investor, as well as his or her derivative family members, will become fully lawful permanent residents.

EB-5 Retrogression for Chinese Investors

In recent years, the slow economy has prompted the USCIS to become more accommodating in its consideration of EB-5 applications. This accommodation, in addition to the positive economic growth seen in the last few years,has rendered the program more attractive. Since the creation of the program in 1990, no numerical caps for EB-5 visa numbers had ever been reached until very recently. On August 23, 2014, the Department of State Immigrant Visa Control and Reporting Division announced that the EB-5 preference category for Chinese applicants had become unavailable until the start of the 2014-2015 fiscal year, which began on October 1, 2014. The increased success of this program leads investors to hope that Congress will soon raise the cap on EB-5 applications, allowing more investors to contribute to economic growth in the U.S. through this special visa program. In 2012 alone, the EB-5 investment program contributed over $3 billion dollars to U.S. GDP, and supported over 40,000 jobs. If you are considering immigrating to the United States through an EB5 contact one of our experienced immigration lawyers in our Chicago office.  

The Regression of EB-5 Investor Visas for China

China, USA Flag

Introduction

The purpose of this article is to inform the reader of the recent announcement that the China EB-5 category will, for the first time in the program’s history, become unavailable. While those pending within the program should be processed at the beginning of the next fiscal year, this announcement poses problems for future China EB-5 applicants. It seems likely that, without intervention from congress, the China EB-5 program may become oversubscribed and may experience a visa retrogression.

EB-5 Overview

The EB-5 immigrant program allows for lawful permanent residence in the United States through qualifying investment and job creation. The program offers investors a conditional two-year green card with the opportunity, at the end of those 2 years, to apply for permanent lawful resident status. To qualify, investors must be able to invest $1,000,000 into a new commercial enterprise or into a Regional Center. Investors may invest $500,000, instead of the $1,000,000, into a Targeted Employment Area (TEA).

China EB-5: “Unavailable”

On August 23, 2014 the China EB-5 category became unavailable for the remainder of the 2014 fiscal year. In the program’s 25 year history, this is the first time that the maximum number of visas available for China EB-5 applicants had been reached. A new allocation of 10,000 visas will be available for the new fiscal year (October 1, 2014) and should not impact most pending China EB-5 applicants. This oversubscription, at the moment, does not represent a visa retrogression as a cut-off date has not been established. However, it is anticipated that new China filings will be substantially impacted.

Visa Retrogression

It is important to note that this current oversubscription does not designate a visa retrogression. Visa retrogression occurs when, after a cut-off date has been established, the level of demand within that date is reached and the number of visas available for the next month will be exceeded. Thus, the cut-off date is pushed earlier than the current one. For example: if a cut-off date is set for January 1, 2012 but the number of visas for that month is exceeded, than the date would be pushed earlier to July 1 2011. This is not currently the case in the China EB-5. The allotment of 10,000 visas will be reset in the next fiscal year but, currently, visas are not being awarded for the rest of this fiscal year. As mentioned above, the Department of State has indicated that there will likely be retrogression for China EB-5 by as early as May, 2015.

The Future for the China EB-5 Program

The concern, following this announcement, is likely not for current pending EB-5 Chinese applicants, but future applicants and the possibility of a China EB-5 visa retrogression. This current “unavailable” status indicates a rising demand for EB-5 visas, which has increased 700% since 2007 (Source: AILA Liaison, Practice Alert: China EB-5, “Unavailable” for remainder of FY2014). Determining when the cut-off date will be established is nearly impossible although some estimates place it as early as May 2015. The concern is that if visa retrogression occurs then once cut-off date is set the backlog and priority dates would not move forward every month. The wait time for the China EB-5 is likely to substantially increase if that takes place. Longer wait times would certainly create issues for Chinese EB5 investors; an example is demonstrating a strong business plan for the applicant result in either finding someone else to run the business or finding another non-immigration strategy. Other problems may include age out derivatives. Children of investors may encounter difficulties with longer wait times as a child’s age does not become frozen (that it, set as the individual’s current age, minus the time it took for their I 526 application to be processed). It is important to note that the risk of retrogression is currently only applicable to Chinese EB5 investors and not EB5 investors from other parts of the world.

Benefits of Increasing the Cap

The aforementioned problems may discourage foreign investment through the EB-5 program. Increasing either the overall quota of EB-5 category or increasing the cap of China EB-5 visas would certainly prove to be beneficial to the US economy. One way to do this would be for Congress to remove family members (spouses and children) from being included in the 10,000 visa quota totals. These suggested changes to the EB-5 program would generate at least 100,000 new jobs and likely more than 5 billion dollars in foreign investment. That totals nearly a month’s worth of job creation compared to the national average for the country as a whole. For example, the average monthly level of job creation in 2012 was 168.5, according to the Department of Labor. With this influx of new jobs into the market, one would also reasonably expect spending connected with the migration of investors and their families, along with the spending of the newly employed as a result of the foreign investment. Increasing the cap totals could add an additional 5% of the jobs to the US economy. The financial benefits that would be associated with increasing the EB-5 cap would be a simple way for Congress to improve on a borderline weak economy and job market.

Conclusion

In short, the current oversubscription to the China EB-5 ought not to be much of a concern for current applicants, unless they are scheduled for a “comeback” interview or for individuals trying to apply for this current fiscal year. Issues arise, however, for future Chinese applicants especially after a cut-off date is set by the department of state. If a cut-off date is established, a visa retrogression would seem imminent, especially with recent increased demand for China EB-5. The benefits the program can provide to the United States economy should be reason enough for Congress to increase the cap total. That goal could be most efficiently accomplished by removing family members from the EB-5 quota totals and allow 10,000 worldwide EB5 investments.

Whether an E2 or L1 Capital Investment May Be Applied to an EB5 Green Card

EB5 Defined Generally In The Direct Investment Context

The Immigration and Nationality Act provides that an Immigrant Visa shall be made available when a foreign national invests or is in the process of investing capital, currently in the amount of $500,000 (for rural or high unemployment areas) or $1,000,000 into a new commercial enterprise and creates 10 full time jobs for US Citizens or Lawful Permanent Resident Holders (other than the investor’s spouse or children). There are numerous issues and factors that must be carefully examined for an EB5. But for purposes of this article we are narrowly examining whether an investor that invests in a business and receives an E2 or L1 visa and subsequently creates 10 full time jobs may apply the investment and job creation to an EB5 Green Card.

E2 Visa Defined

8 CFR provides that a foreign national of a Treaty Country may obtain E2 status when the investor:”(i) Has invested or is actively in the process of investing a substantial amount of capital in a bona fide enterprise in the United States, as distinct from a relatively small amount of capital in a marginal enterprise solely for the purpose of earning a living; (ii) Is seeking entry solely to develop and direct the enterprise; and (iii) Intends to depart the United States upon the expiration or termination of treaty investor (E-2) status.”

Its important to point out that unfortunately foreign nationals of India and China are not eligible for an E2 visa, which is a shame as there is very strong demand from foreign investors in these countries, which would be beneficial for the US economy. Nevertheless, investors of India and China generally inquire into an L1 visa or an EB5 green card mentioned above.

L1 Visa Defined

8 CFR defines an L1 visa as “Intracompany transferee means an alien who, within three years preceding the time of his or her application for admission into the United States, has been employed abroad continuously for one year by a firm or corporation or other legal entity or parent, branch, affiliate, or subsidiary thereof, and who seeks to enter the United States temporarily in order to render his or her services to a branch of the same employer or a parent, affiliate, or subsidiary thereof in a capacity that is managerial, executive , or involves specialized knowledge. Periods spent in the United States in lawful status for a branch of the same employer or a parent, affiliate, or subsidiary thereof and brief trips to the United States for business or pleasure shall not be interruptive of the one year of continuous employment abroad but such periods shall not be counted towards fulfillment of that requirement.”

L1 and E2 Distinguished for Investor Purposes

In the context of this article, namely whether an investor that invests in a business and receives an E2 or L1 visa and subsequently creates 10 full time jobs may apply the investment and job creation to an EB5 Green Card. an L1 and E2 have a huge distinction. The purpose of an L1 visa is to transfer an employee of an overseas company to a related or affiliated company in the US. The transferee is viewed as an employee of a separate overseas entity and of the US entity and not an investor. In many cases, especially in small businesses, the transferee is both an investor of the overseas company and the US company. However, in the eyes of US Immigration law, the transferee is an employee. In contrast, US Immigration views the E2 investor as an investor. Similarly, in an EB5 green card Immigration views the foreign national investor as an investor. Apples to apples and oranges to oranges, but do not compare apples to oranges, is an American saying. Similarly, an E2 investment is comparable to an EB5 investment, while an EB5 and L1 are apples and oranges.

E2 to an EB5 – There must be an infusion of Capital, not just retention of profits

Provided an E2 investor meets the requirements for an EB5, under the right circumstances an E2 investment and job creation may be applied to an EB5 green card. As Kenkhuis v. INS holds, an EB5 investment “requires an infusion of new capital, not merely a retention of profits of the enterprise”. Kenkhuis v. INS no.3. OI-CV-2224-N (N.D. Tex. Mar 7, 2003). If an investor is going to pursue an E2 with an EB5 as the ultimate goal, its important to plan accordingly and to seek the assistance of an experienced immigration lawyer and business advisor/accountant. It would not be pleasant to be successful in the E2 business, invest $1m one way or another, create 10 US full time jobs, and then find out that the source of funds is not sufficient for EB5 purposes.

L1 or EB5 For the Investor From India or China

Investors from India, China, and other non-treaty countries are faced with the decision, go for an EB5 Investor Green Card or consider an L1 and subsequently and EB1C (International Manager or Executive Green Card). Each case is unique. Generally speaking L1 cases for new and/or small US businesses are scrutinized more than larger established entities in the US (this is not all cases but just a general proposition to consider). Moreover, does the investor want to start off large in the US, if so, then perhaps an EB5 is the correct strategy. Remember, the EB5 process requires an initial I-526 petition for conditional residency. Once the I-526 petition and Immigrant Visa are approved the investor may enter into the US as a conditional resident. The investor must then create 10 full time US jobs within 2 years (some cases are given 2 1/2 years) and a permanent green card can be obtained through the filing of an I-829 petition and adjustment of status application. An EB5 case (from date of filing the I-526 petition) is looking at a minimum of 2 years, but in most cases at least 3.5 years from date of filing the I-526 petition (taking into account processing times). The other option is to pursue an L1, which in some cases can be obtained in approximately 2 to 8 weeks with premium processing. If its a new entity in the US an L1 will be issued for 1 year, in which the investor will want to file for a renewal after 1 year. The investor in many cases may want to wait until the L1 renewal is approved before filing the EB1(c) Green Card. However, each case has a unique set of facts and there are various strategies. As mentioned above, its important to work with an experienced immigration lawyer and business advisor/account/lawyer.

Gerald Cipolla is the founder of and an attorney with the Law Firm of Cipolla Law Group, an experienced Immigration Law Firm representing companies, investors, and immigrants from around the world in US Immigration Matters. Mr. Cipolla has been a lawyer since 2000, has earned a JD, LLM, MBA, and a MS in Computer Science. Mr.Cipolla regularly publishes articles on our blog.

Demand for Permanent Residence in the United States – Unfortunately Supply is Outpaced by Demand!

There was a recent article from the New York Times entitled “Wary of Future, Professionals Leave China in Record Numbers”    The gist of the article is that Chinese professionals are leaving China due to their concern over the Chinese government’s communist policies and leaving for Western countries such as the U.S., Australia, and India.  The article stated that in 2011,” the United States received 87,000 permanent residents from China, up from 70,000 the year before. Chinese immigrants are driving real estate booms in places as varied as Midtown Manhattan, where some enterprising agents are learning Mandarin, to the Mediterranean island of Cyprus, which offers a route to a European Union passport.” I definitely agree with the economic catalyst that immigration from overseas professionals provides to the United States.  Clearly the professionals from China contribute a great deal to their communities in terms of economic benefits, skilled labor, and in social diversity.  The problem in my opinion and experience as an Immigration Lawyer, is that the U.S. is losing out to other countries.  I have had many clients and friends that are extremely well educated and highly capable persons from China, educated with advanced degrees in the U.S. and either unable to obtain a job in the U.S. or unable to secure a visa number.  This is due to small amount of available green cards allotted by the United States Congress as well as the restrictive U.S. Immigration laws, which ends up deterring some of the best and brightest from not only China, but the rest of the world.  For example, a person from China educated in the U.S. with a Bachelor’s Degree or higher may want to live and work in the U.S.  In most cases, a suitable visa for this type of situation is an H1B Visa.  An H1B visa is for skilled workers with the equivalent of a US Bachelor’s Degree that have a job offer from an employer in the US.  Congress allots 65,000 available H1B visas and an additional 20,000 for persons earning a Master’s Degree or higher in the United States.  The first day United States Citizenship and Immigration Services (USCIS)  will accept an H1B petition is April 1 for employment on October 1 of the same.  In a poor job market such as the past few years, it may take several months to use up the available H1B visas (H1B cap), and in a good job market there may be twice the amount of petitions filed on April 1 (i.e. opening day for H1B’s) for the precious few H1B visas alloted by Congress.  The problem is, once these H1B visa are used up, persons from China generally have limited options.   Some persons from China would like to start a business if they can’t obtain a job, or may strictly be an entrepreneur and bypass the job market to open a business.  Well, for most country’s this is an option through an E2 visa, but its not an option if you’re from China unless the Chinese National would like to invest $500,000 to $1,000,000 (EB5 Investor Green Card) in a business that will create 10 US full time jobs within the first 2 years.   The reason being is E2 visas are available for nationals from countries that have a Treaty with the United States, thus China and India do not have the necessary treaty to make its persons eligible for an E2 visa.  As I have argued in past articles, Congress should eliminate the Treaty requirement and make an E2 visa available to everyone.   As the New York Times article states, 87,000 people from China received permanent residence in the United States.  Unfortunately, the supply of green cards for persons from China does not come anywhere near equaling demand.  There are essentially 3 ways to obtain permanent residence in the United States (there are more ways but for all practical purposes these are the main 3 ways):
  1. Marriage to a US Citizen – Congress allots an unlimited amount of marriage based green cards per year for persons marrying U.S. Citizens;
  2. Family based other than marriage through a US Citizen – Congress allots up to 226,000 family based green cards and each country is capped at at a maximum of 7% of the total allotment.   
  3. Employment based through a personal achievement (ie. extraordinary ability EB1, job offers for advanced degree and skilled workers EB2 and EB3, and Investors EB5) – Congress allots up to 140,000 employment based green cards and each country is capped at at a maximum of 7% of the total allotment.
The excess demand based on Congress’ allotment of available green cards and country limits of 7% creates a backlog for both family based and employment based green cards.  For instance, a person from China or India that is the spouse or child of a permanent resident already living in the United States would be eligible for category F2A green card and would have an estimated wait time of approximately 2.25 years.  A person from China and India eligible for a Employment based green card based on having an Advanced Degree and a job offer from a U.S. employer requiring the advanced degree would have in excess of a 5 year and an 8 year wait period for a green card respectively.  In other words, if a person from China has a Master’s Degree in a highly sought after field such as Computer Engineering, and an employer extends a permanent job offer, a person from China would have to wait 5 years for a green card and go through a lot of zigging and zagging to maintain their non-immigrant status while waiting in the U.S. for this green card.  They also need to hope that over the next 5 years, nothing happens to the permanent job offer.  As we all know, 5 years is a long time to keep the status quo.  In my opinion, this 5 year wait period (6 years if a Chinese National is qualified for an EB3) can be a big deterrent for someone highly skilled to wait when Canada and Australia, both known for having much more relaxed permanent residence rules have growing economy’s with demand for these same skilled workers.
As the New York Times suggests, there is much demand for permanent residence in the United States than Canada, Australia for some of the best and brightest people from India and China.  This also applies to other countries such as India where in many situations, there is even greater demand than from China, especially in the IT field.  The United States greatly benefits from Immigrants, and unfortunately the laws and cap on visa numbers and permanent resident numbers do not quite address to accommodate this demand.  With the election over, hopefully Congress and President Obama will address the problems of our immigration system.  

Foreign Entrepreneurs and the Revolving Door

 

There is a fascinating book that recently came out authored by Professor Vivek Wadhwa and Professor Dan Siciliano entitled “The Immigrant Exodus”, which can be found at this link.  I have not had the opportunity to read this book as it just came out on October 2, 2012 but reviewed the synopsis while researching this article.  In a nutshell, the book looks to argue that the amount of U.S. immigrant-founded start-ups is down, which is the first time in history.  The implications are a brain drain from the U.S. as foreign entrepreneurs take their ideas and capitals outside the U.S. having dire consequences to our economy.  This is something I have been arguing in this blog and to my peers and friends.  As an immigration attorney in Chicago, it is very frustrating to watch.  I have many clients come in to my office, tell me about this great business that they would like to start, where they would like to start it, and how they want to get it going.  The first question is, how do we go about getting my immigration status in line with my objectives? Unfortunately, the current immigration laws are not that entrepreneur friendly.

Investor Visa vs. Investor Green Card


There are essentially 2 non-immigrant visa options and for all practical purposes 1 green card option.  The non-immigrant options are an E1 Treaty Trader Visa and E2 Treaty Investor Visa.  Generally for investment in the U.S., E2 Treaty Investor is the visa of choice.  According to USCIS, an E2 visa “allows a national of a treaty country (a country with which the United States maintains a treaty of commerce and navigation) to be admitted to the United States when investing a substantial amount of capital in a U.S. business.”  The operative word is treaty country.  Our biggest employment based countries are China and India.  Unfortunately, there are not treaties between the U.S. and China.  Consequently, E2 visas are not available for persons from China and India.  The next analysis for clients from China and India is whether an L1 visa is available.  According to USCIS, an L1 visa “enables a U.S. employer to transfer an executive or manager from one of its affiliated foreign offices to one of its offices in the United States.  This classification also enables a foreign company which does not yet have an affiliated U.S. office to send an executive or manager to the United States with the purpose of establishing one.”  The bad news about L1 visas is since 2009 L1 along with other visas such as H1B visas and O-1 visas have been scrutinized by USCIS.  L-1A visa petitions denial rates have increased from 8% in 2007 to 14% in 2011.  Requests for Evidence increase from 4% in 2004 to 51% in 2011.  These statistics were provided by USCIS and analyzed by the National Foundation For American Policy in February 2012 and can be found at this link.  Clearly the Request for Evidence statistics and denial rates indicate that L1 Intracompany transferee petitions are scrutinized much more compared to previous years.  As NFAP suggests, this added scrutiny on employer’s petitions despite no changes in the law are “costing them millions of dollars in project delays and contract penalties, while aiding competitors that operate exclusively outside the United States”.  In a time where the economic recovery is fragile, we should be encouraging any and all legal investment.  I would argue that it’s not the fault of USCIS or the Consulates for the tough adjudication policy, but rather Congress for the inadequate laws for foreign entrepreneurs and investors.  For Example, if you’re from China or India, there is not even an investor visa available to you as E2 visas do not apply.  If you are from China and India and have an overseas company and want to expand to the U.S., you can potentially transfer executives, managers, and key employees via an L1.  However the problem is that small company L1 visa cases are generally scrutinized more than large companies.  Most start ups or new enterprises are small companies.  The only other practical choice is an EB5 where an alien must invest $500,000 to $1,000,000 and create 10 full time U.S. jobs within 2 years.  For a new company, $500,000 to $1,000,000 can be impossible to obtain as the source of funds must come from the investor (ie. not a loan, but rather the investor’s actual own funds).  It is certainly not impossible to obtain an L1 or E2 (unless you are from China or India) or to obtain an EB5 if you have $500,000 to $1,000,000 to invest in a new idea that will create 10 full time U.S. jobs, the audience is definitely limited as opposed to broadened.  Hence, this may be a reason why foreign entrepreneurship in the U.S. is down, as Vivek Wadhwa’s book “The Immigrant Exodus” suggests. Now that the problem has been established and some of the causes isolated, what are the solutions.  Simple, get rid of treaty requirements so that persons from all country’s can benefit from the E2 requirements.  Second, allow for previous investments made in E2 businesses to count towards the EB5 investment.  I have had many clients raise the point that they have a successful business and want to convert their E2 into an EB5.  In most circumstances, a fresh $500,000 or $1,000,000 is needed, depending on the location of the business.  Third, since E2 visas are renewable indefinitely, provide a specified amount of time such as 10 years for E2 visa holders to convert the E2 into a green card.  Surely after 10 years a person operating their business would like to call themselves a permanent resident.    What are the chances of these suggestions being implemented?  Impossible to say, but Mitt Romney’s plan seems to suggest it’ll layout a similar program.  However, we have seen so many broken political promises that we’ll believe it when we see it.  Assuming these suggestions are taken, I believe that investors from around the world, students studying inside the U.S. that have an idea and some source of capital, would choose the United States as a place to set up their business.  What would be the benefit?  JOBS and lots of them!

Twisting and Turning EB2 NIW for Entrepreneurs

On August 2, 2011 United States Citizenship and Immigration Services (USCIS) announced an initiative to promote start up enterprises and spur job creation. The purpose was to to find ways to stimulate investment in the US by attracting foreign entrepreneurial talent of exceptional ability or who otherwise can create jobs, form start up companies, and invest capital in areas of high employment. The press release from USCIS states that these actions “mark the six-month anniversary of starup America, a whitehouse-led initiative to reduce barriers and accelarate growth for America’s job creating entrepreneurs.” The press release went further with a questions and answers section relating to the start up initiative. Specifically, the frequently asked questions section discussed how the current set of laws relating to EB2 National Interest Waivers and EB5 fulfill the initiative. As a Chicago Immigration lawyer, I applaud USCIS’s resourcefulness. However, its an example that USCIS is being handicapped by Congress and the President’s lack of willingness to pass relevant laws to meet the objectives, mainly to ” reduce barriers and accelerate growth for America’s job creating entrepreneurs.” In essence, the current laws are being twisted and turned to show that they meet the objectives for entrepreneurs and job creation in the United States. Similar to a judge being only able to judge a case by the laws that she has to work with, USCIS is required to adjudicate the immigration cases before it with the current set of laws, no matter how inadequate the laws may be to address the needs of attracting growth and job creation in America. This is not a slam on any particular political party, but rather support for the criticism that politicians on both sides of the aisle are not addressing the problems our country faces. It’s very noble, and easy, to say that America is competing to attract investment from around the world for job growth.  However, there must be mechanisms in place to accomodate these policies and support these statements.  Congress should be working with the president and vice versa. There are many people out of work in this depression we are encountering and some simple immigration steps could be taken to help with this problem, maybe not solve the problem, but at least take steps in the right direction.  Overall USCIS does a great job, however, like Judges, they do not make the laws and consequently are being required to twist and turn the current laws to meet the needs of the country. Back to the frequently asked questions section. My main criticism is that EB2 National Interest Waiver is a really high standard i.e. showing that an entrepreneurs presence (or business) is in the national interest of the United States.  An entrepreneur wanting to invest in the US must meet the NYSDOT National Interest Waiver test, specifically, the 3 prongs set forth in the NYSDOT case must be met.

 The 3 prong test from NYSDOT are:

1. The waiver applicant must seek employment in an area that has substantial intrinsic merit. 2. The waiver applicant must demonstrate that the proposed benefit to be provided will be national in scope. 3. The waiver applicant must demonstrate that it would be contrary to the national interest to potentially deprive the prospective employer of the services of the waiver applicant by making available to U.S. workers the position sought by the waiver applicant. We’ll only go over the first 2 prongs as the third prong is more related to labor certification and not totally relevant to this discussion.

Prong 1: NIW Substantial Intrinsic Merit

The waiver applicant must seek employment in an area that has substantial intrinsic merit. In essence, to prove the first prong, the entrepreneur must establish that his or her endeavor has intrinsic merit. This could be subjective. Rather than focus on the entrepreneurs qualifications, they must prove to the government that their proposed employment i.e. their new business in the US has intrinsic merit. I would argue that even a venture capitalist would lack the foresight to be able to call a new endeavor in the United States as having intrinsic merit.  Put another way, how does someone know that a business will have intrinsic merit?  You don’t know until you really know.  Even though something likes a great idea or a terrible idea, you don’t know until the business plays itself out.  So how do you judge that a newly formed entity in the US has intrinsic merit?  Does making computers have intrinsic merit?  How about making coffee?  How about garbage removal?  Dare I say being an Immigration Lawyer?  Or what if I were to revolutionize how immigration lawyers practice immigration law, would that have intrinsic value?  Perhaps, but again, we don’t know until after the fact.

Prong 2: NIW Benefit national in scope

The waiver applicant must demonstrate that the proposed benefit to be provided will be national in scope. The Alien investor/entrepreneur must show that their investment will be going national. Could Steve Jobs have known that when he started Apple it would be national or international in scope? Maybe after a little time of running the business, but not likely from the outset. I’m sure he had a strong feeling and was very passionate that his new business, Apple would work, but did he really know it would go national and eventually international? How about Howard Schultz when he started Starbucks. Starbucks just started in Seattle and eventually went national and international. But from the outset, did Schultz know that Starbucks would be national in scope? Probably not. How about prong 1, is Starbucks really a business that has intrinsic merit. Afterall, they serve coffee. Not too difficult a task, well for me it is, but for most people its not. As an Immigration Lawyer, yes, I think starting a business that makes computers and software has intrinsic merit and so does starting a business that makes and sells coffee. But that is the advocate in me speaking out, just as a criminal lawyer probably never met a client that was guilty. The point is, should a National Interest Waiver really be a law used to attract capital in the United States, create jobs, and accelerate job growth? I really don’t think so. I’m just an Chicago based Immigration lawyer so likely not in a position to make laws. But wouldn’t it seem more relevant to have a mechanism similar to an E2 visa for a period of say 5 years. After the 5th year allow the applicant to apply for permanent residence (ie. a green card). How would this play out? As USCIS states, “The E-2 nonimmigrant classification allows a national of a treaty country (a country with which the United States maintains a treaty of commerce and navigation) to be admitted to the United States when investing a substantial amount of capital in a U.S. business.” How about this, why not eliminate the treaty country requirement and extend it to all persons? If someone has the money to invest in an idea, that will eventually create jobs, doesn’t that achieve the Whitehouse’s objective of reducing “barriers and accelarate growth for America’s job creating entrepreneurs?” One problem though, an E2 visa can be challenging to transition to permanent residence, consequently, current laws allow an E2 holder to renew the E2 visa indefinitely. To me, and many clients that I speak to, that’s a problem. After a certain period of time of living in the US, you start to call the US your permanent home. Unfortunately there really is not an easy transition to permanent residence from an E2 visa. It is possible but wouldn’t creating a mechanism or rule to allow E2 holders to adjust status to permanent residence after a period of time of living and investing in the US? As mentioned above, National Interest Waivers have really high standards. Why do we want to limit capital investment in the US to persons that have “entrepreneurial talent of exceptional ability or who otherwise can create jobs, form start up companies, and invest capital in areas of high employment”? Why can’t we lower the standard to people that have a little extra money to invest in an idea that they have and have the guts to puruse the idea by hiring US workers? Steve Jobs and Howard Schultz after the fact certainly have exceptional ability, but before they started their great businesses that have touched us all, I don’t know if I could have called them exceptional, but rather a couple of guys that had a little extra money to invest in an idea with the guts to puruse the idea by hiring US workers?

“Blueseed” – a Investor Visas and Work Visas Black Market for Entrepreneur

I recently read an article about a cruise ship intended to house start up company’s and their entrepreneurs and employees off the shores of Northern California within close proximity to Silicon Valley.  As you know Silicon Valley is one of the most important technology and entrepreneurship hubs in the United States and world.  It is a magnet of some of the greatest minds in the world, mainly in technology and business, as well as in other disciplines.  Silicon Valley is home to start ups and now established company’s such as Google, Facebook, Hewlett Packard, and Cisco, just to name a few. The article states that the “idea behind Blueseed is to provide a visa-free locale where foreign entrepreneurs can create technology companies that utilize resources in Silicon Valley without having to deal with the cumbersome process of obtaining a U.S. visa. As an Immigration Lawyer, that is really a powerful quote.  In other words, businesses and entrepreneurs from the U.S. and around the world believe that the current U.S. immigration system is so inadequate that they must look for alternatives or go to extreme measures to have the opportunity to start a business or hire overseas talent.   The mere concept is ludicrous, not to quote Mike Tyson.  Maybe I am living in Cipolla World, but it just seems logical that if an employer wants to hire someone, whether from overseas or in the US, they should have the right.  The process should be easy and not take a lot of their time.  Of course they should have to go through a process of proving that they meet the legal requirements, i.e. if they are an overseas investor they should need to prove that they are not a criminal, they have working capital, they intend to start a business, and they will create U.S. jobs.  In a nutshell, these are the general requirements and purpose of an some of the most popular investor visa/green card categories like the EB5 Investor Green Card and an E2 Treaty Investor Visa. The purpose of the EB5 Green Card and E2 Treaty Investor Visa is to attract overseas capital to be invested in the U.S. so that U.S. jobs can be created. It seems very logical that overseas capital that creates jobs helps create consumption in the U.S.  Someone that has a job will not live off the government, they will be able to purchase a home or rent an apartment, buy food and other necessities, pay for professional services such as doctors, accountants, lawyers, realtors, etc, and spend money on discretionary items such as restaurants and travel.  From the government’s interest, this overseas capital creates a higher tax base.  Excuse me if my logic is not supported by formal statistics, but I read enough business literature and have studied long enough to grasp these principles, so hopefully my argument does not require formal statistics. The other issue is capital that is currently in the U.S. that has an idea, wants to invest in the idea, and needs the human workforce to develop the idea into a business that creates jobs and benefits society.  In other words, this capital does not discriminate, it just needs the best women and men for the job, whether American born or foreign born.  After all these investors are taking risk so they should have the right to hire whom they please.  To take it a step further, the laws should be built to accomodate these investors so that they can hire U.S. workers and overseas workers.  Additionally, the laws should be developed to protect America, allowing people in the U.S. for the purpose stated, within the time frame needed, and to essentially prevent criminals from entering the U.S.  It is pretty straightforward.  How many visas are the right amount?  Let the market dictate.  It creates so many imbalances to dictate to the market place how many H1B Visas are the right amount, or how many EB1 Green Cards are the right amount.  It is the same principle as what should the price of soybeans be?  I have no idea, and likely the government has no idea.  The only parties that know are the buyers and the sellers, what’s a willing buyer willing to pay, and a willing seller to sell for.  Same principle, how many H1B visas or NIW Green Cards are the right amount?  Let the market place answer this question.  Let the employers say how many H1B visas are the right amount.  Coming up with an arbitrary amount of 65,000 (H1B cap) seems, well, arbitrary.  What if we are in a recession and only 15,000 are the right amount, or we are in a boom and 250,000 are the right amount?  If employers and investors are able to prove their case based on reasonable and logical laws with a relatively straightforward and efficient process, then they deserve the visa for the employee or investment.  The regulation on the legal requirements and the quantity of green cards and visas has created a black market for human capital and investment.  Case in point is project Blueseed, the cruise ship intended to house high tech companies to circumvent the U.S. Immigration System.  America is missing out on the added benefits that diversity and overseas people can bring.