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What is a regional center?

A “regional center” is defined by the United States Citizenship & Immigration Services (USCIS) as “an entity, organization, or agency” that USCIS has approved as a designated Regional Center for the EB-5 Immigrant Investor Program. Under the federal statute authorizing the EB-5 Immigrant Investor Program, an approved Regional Center can be any public or private economic unit, the purpose of which is to seek “to promote economic growth through export sales, improved regional productivity, creation of new jobs, and increased domestic capital” as explained on the USCIS website. Each Regional Center focuses specifically on a defined geographic area of the United States, and positively affecting the general welfare and economy of that area by attracting capital investment. The regional center designation also is limited to the specific industries that the regional center proposed in its application to USCIS for the designation. The geographic scope of regional centers typically cover targeted employment areas or rural areas in order to enable EB-5 investor to qualify based on a $500,000 investment instead of based on a $1,000,000 investment, which is the minimum required investment for an economically healthy and prosperous area.

The organization that holds the Regional Center designation generally operates by forming limited partnerships to engage in specific business projects designed to accomplish at least one or more of the above-stated purposes of the EB-5 Program. Most typically, the focus is on job creation, because that was Congress’ primary purpose in creating the program. The organization that has obtained the regional center designation, or an affiliated organization, usually serves as the managing general partner for each such limited partnership, while the investors are limited partners.

When the organization that holds the regional center designation is a government body, usually a city or state agency, holds the regional center designation, private companies sign a memorandum of understanding with the government agency in order to associate with the regional center and develop projects under the government agency’s regional center designation.

Beware that some regional centers, which are associated with and operating under the regional center designation of a city or a state agency, try to make their program and project seem more secure and legitimate through association with the government agency that holds the regional center designation, as if that government agency were the guarantor of the safety of the project. This is a false sense of security because the project is still a private sector project just like every other EB-5 project, and the government agency that holds the regional center designation is not guaranteeing or in any way vouching for the quality or safety of any project developed under its regional center designation. Moreover, by the laws and regulations governing the EB-5 program, no guaranty of the EB-5 investor’s investment can be given. As a business investment, the funds must be placed at risk of partial or total loss. However, the entity in which the EB-5 investor invests can loan out the money, and require a guaranty of repayment in the form of a mortgage or other securitization arrangement. Alternatively, the entity in which the EB-5 investor invests can directly own a real estate property that is the basis for the business such as, for instance, a hotel, office building, etc.

To summarize, you can think of the regional center designation as a license issued by USCIS to a private or public entity to foster the development of private-sector projects funded by foreign investors, designed to create at least 10 jobs for U.S. workers per investor, located in the geographic region and operating in the industries for which the regional center designation was granted.

Can I take out a loan in order to make my EB-5 investment?

Yes, you can invest funds obtained from a loan; however, you must meet strict requirements regarding the loan.

First, the loan has to be secured by an asset owned by the EB-5 investor, the asset securing the loan must have a value the same as, or greater than, the amount of the loan, and the lender’s security interest must be perfected, i.e., the mortgage must be recorded in the government’s property records. Second, the EB-5 investor must be the principal borrower on the loan and must be personally liable for repayment of the loan. Third, EB-5 investor cannot offer any assets of the EB-5 investment entity as security for the loan, nor can he offer his ownership share in the EB-5 investment entity as security.

Can I use a loan from a person or a company that is not a lending institution? Yes, a private loan can be used, but, in addition to the strict requirements mentioned above, it is necessary to document how the lender earned the loan funds legally, and trace the funds from the legal source to the borrower/EB-5 investor, and then from the EB-5 investor to the EB-5 project. The requirements for documenting the source of the lender’s funds are the same as for an investor. For an explanation of those requirements, please see the following blog posting:

How do I prove a lawful source of funds for the EB-5 Investor Green Card?

It is very important to note that any loan that is used as a source of EB-5 investment funds must be secured. USCIS has reversed it previous policy of accepting unsecured loans as an acceptable source of funds. To USCIS it makes no difference whether the unsecured loan comes from a private party or a lending institution, they categorically reject unsecured loans.

One of the key requirements for immigrating under the EB-5 immigrant investor program is proving that the investor derived the investment funds from a lawful source. The EB-5 investor must prove the lawful source of funds at the I-526 petition stage, which is the first of three stages in the EB-5 immigration process. Once the I-526 petition is approved, the EB-5 investor does not have to prove again the lawful source of funds. The types of documents that have to be provided in order to prove a lawful source of funds are specific to the financial circumstances of each investor, and so there is no “one size fits all” list or approach.

USCIS’s guidelines are evolving over time, and the agency does not typically announce publicly when their guidelines have changed, but rather immigration attorneys practicing in the EB-5 field figure out where the boundaries are by adopting different approaches in different clients’ cases. Also, USCIS occasionally gives some insight into their thinking during stakeholder meetings, public meetings with the USCIS Director, and in liaison meetings with the American Immigration Lawyers Association. Nevertheless, in spite of all this secretiveness and arbitrariness, some general guidelines can be discerned from practice. As a general matter, though, it is crucial for the EB-5 investor to retain an immigration attorney experienced in the EB-5 practice, who knows from experience what documentation is likely to suffice for USCIS to approve the I-526 petition.

The overall source of funds

It is necessary to determine the overall source of funds, in other words, how the funds were originally earned. One exception to this requirement is where the funds were inherited. USCIS is not in the practice of requiring proof of how the person who left the inheritance earned the funds originally. By contrast, a gift from a living relative is not an exception, but rather it just refocuses attention on how the gift giver earned the gift funds. It is common practice for a parent or a grandparent to gift the investment funds to their child or grandchild.

Whoever originally earned the funds needs to provide evidence of how the funds were earned, whether as salary income from employment, business income, investment income, winning the lottery, among other sources. Documentation can take the form of employment and income confirmations from the employer. In the case of business owners, proof of the existence of their business, proof of the investor’s ownership of the business, financial statements from the business for the past 5 years, and an explanation for how the business owner either started the business from nothing or purchased the business. If the business owner purchased the business, then it needs to be documented how he or she acquired the funds to purchase the business. Similarly, in the case of investment income, the investor needs to document the income from the investment and show how he or she originally acquired the funds in order to make the investment.

USCIS expects for the investor to submit personal tax returns from the past 5 years. That being said, the absence of tax returns or insufficient income on tax returns are not fatal to the I-526 petition. If the investor has earned the funds in a country where there is no personal income tax, then it can be explained and documented that there are no personal tax returns for that reason. If the investor earned the investment funds more than five years ago, and so the tax returns for the past 5 years do not show enough income to make a $500,000 investment, then we can explain and document how the investor earned the funds more than 5 years ago, and document where the investor held the funds in the meantime.

In some cases, the EB-5 investor comes from a country where there is a personal income tax, but the government only selectively enforces the tax laws, and many citizens of the country do not file tax returns or routinely underreport their income on the tax returns, then such EB-5 investors can still qualify, but it becomes necessary to provide other convincing evidence of how much the person really earned legally, based on bank account statements, invoices, contracts, etc. High-level managers at USCIS have stated in the past that their agency is not interested to enforce the tax laws of other countries by seeing that an investor has paid his or her taxes abroad. The continuing approvals of I-526 petitions for EB-5 investors coming from countries with low rates of income tax compliance such as China and India confirm that this approach still holds at USCIS. Instead, USCIS views the reporting of income on the tax returns as a good indication, though not conclusive, that the income is not being derived from criminal activities, since major criminal activities such as drug trafficking, racketeering, loan sharking, etc., generally entail the use of cash that does not circulate through regular banking channels and is not reported on tax returns. USCIS does look for patterns of transactions that are indicative of money laundering. However, where sufficient evidence is submitted indicating that the investor is earning enough income from legitimate business or other earning activities to make a $500,000 investment, then USCIS routinely approves the I-526 petition, even in the absence of tax returns or with tax returns with underreported income.

An EB-5 investor can derive the investment funds from loans, but only under very specific conditions. USCIS accepts investment funds from loans only if: 1) the EB-5 investor is the principal borrower of the loan and is personally liable for repayment; 2) the loan is secured by property belonging to the investor personally; and 3) the property securing the loan has a value equal to, or in excess of, the amount of the loan. USCIS no longer accepts unsecured loans as a source of capital for an EB-5 investment. In the course of 2012 without making any public announcement, USCIS changed its long-standing policy of accepting capital for EB-5 investment coming from unsecured loans.

One slightly obscure documentation requirement of the EB-5 program is the following:

Certified copies of any judgments or evidence of all pending governmental civil or criminal actions, governmental administrative proceedings, and any private civil actions (pending or otherwise) involving monetary judgments against the petitioner from any court in or outside the United States within the past fifteen years.

USCIS looks closely at any such legal actions against the investor to determine whether the legal action indicates that the investor has earned the investment funds from engaging in criminal activities, or has acquired the funds through defrauding individuals who have then filed civil lawsuits against the investor.

Tracing funds from source to regional center project’s account

After documenting how the investor earned his or her investment funds, in general, it is necessary to trace the funds from the investor’s source to the regional center’s escrow account or operating account. If the investor is freeing up the investment funds from selling an asset such as a real estate property, stocks, a business, etc., then it is necessary to document the funds coming in from the sale of the asset, and to trace the funds through whatever accounts they pass on the way to the regional center’s escrow account or operating account.

In principle, any investor who legally acquired sufficient funds to make an EB-5 investment can qualify to immigrate under the EB-5 program. However, as with many things in life, “the devil is in the details.” The EB-5 investor has to provide sufficient documentation to the satisfaction of a USCIS examiner that the investor did, in fact, acquire the investment funds legally. It is crucial for the investor’s success in the EB-5 immigration process that he or she engage an immigration attorney, who is experienced in the EB-5 practice area and, from experience, has a good understanding of what USCIS examiners expect and are willing to accept as sufficient documentation of the lawful source of funds.

How do regional centers prove job creation?

The job creation methodology is the single most important aspect to consider when examining regional center programs. In order for an investor to qualify for removal of the conditions from his or her conditional permanent residence, USCIS must be convinced, based on calculations presented by an economist using a reasonable methodology that sufficient jobs have been created, that is, 10 jobs per investor in the program.

Different regional center programs use different methodologies for calculating the number of jobs created. The simplest and most reliable method is by showing indirect job creation calculated based on expenditures on construction work. An example of this would be a regional center that makes loans to project developers, who use the funds, together with other loans and equity capital, to carry out construction of large-scale projects like hotels, corporate headquarters, and warehousing facilities for large companies, just to name a few types of projects. The job creation figure is then calculated based on the total amount of money spent on construction and/or renovation, including not only the regional center project’s loan funds but also loans from banks used to fund the project. The advantage of this approach is that it suffices for the construction work to be completed and paid for, regardless of when or whether the business that will occupy the developed premises opens for business or ever reaches the level of income and business activity that is anticipated.

It should be noted that some regional centers, in the interest of placing more investors into a project, do not stop with just the above-mentioned indirect jobs creation from expenditures on construction work, but also rely on the business occupying the premises reaching certain income targets. Also, in the case of hotel projects, some portion of the job creation might depend on the expenditures of guests staying at the hotel, which means that the job creation calculation can depend on the hotel reaching a certain occupancy rate. These approaches to job creation can leave EB-5 investors more vulnerable to denial for not achieving the full job creation figure of 10 jobs per investor.

At this juncture, I would hasten to add that there is also a provision in the regulations pertaining to the I-829 petition to remove conditions, which allows for approval of the I-829 petition, even where all 10 jobs per investor have not yet been created, but will still be created within “a reasonable time”. To benefit from this flexibility provision, it generally needs to be shown that all reasonable care and diligence has been taken to bring about the job creation prior to the removal of conditions, but that due to factors beyond the control of the project developer and the regional center, the project was delayed. USCIS is currently interpreting “a reasonable time” as 1 year.

I would also point out that the sufficiency of jobs is measured based on the number of other EB-5 investors who have already gone through the I-829 petition process and those who are in the I-829 petition process at the same time as the given EB-5 investor. It is not necessary to prove that there are already enough jobs created in order to cover all investors who will file the I-829 petition in the future. This situation is advantageous for those EB-5 investors who are the earliest to file the I-829 petition, but is no help to those who are among the last to file the I-829 petition in the project. In the example given above, of the project relying on a mixture of jobs, some from construction, some from operating income, and some from guest expenditures, the earliest EB-5 investors to file the I-829 petition get to claim the jobs created from construction expenditures, whereas the later investors to file the I-829 petition depend on the less reliable job creation from operating income and guest expenditures.

How long does it take to get the money out of the EB-5 investment?

One of the top questions in the mind of every prospective EB-5 investor is “How long does it take to get my money out of the EB-5 investment?” To answer that question, we have to examine that question from three primary perspectives: 1) immigration legal requirements for how long the investment must be maintained; 2) contractual legal restrictions; and 3) market, economic obstacles to cashing out of the investment.

USCIS requires that the $500,000 of investment funds and the program fee charged by the regional center be paid either into escrow, pending the approval or denial of the I-526 petition, or paid directly into the EB-5 enterprise before the I-526 petition can be filed. Therefore, the funds must be held in escrow or in the EB-5 project the entire time that the I-526 petition is pending, which can range from one month to one year. From recent experience in 2012 and 2013, the processing times have gone up from 4-6 months to 10-12 months. Once the I-526 petition is approved, USCIS requires that the investment be maintained until USCIS approves the I-829 petition to remove conditions from the conditional permanent residence. This means that we need to add another 3-6 months (sometimes longer) for consular processing of an immigrant visa or adjustment of status in the U.S. in order to begin the two-year period of conditional permanent residence. Then, in the final 90 days of the two-year period, the EB-5 investor must file the I-829 petition to remove conditions from the conditional permanent residence. It typically takes anywhere from 2 months to 10+ months for USCIS to decide the I-829 petition. So, if we figure the processing times on the longer end, with 10 months for the I-526 petition, 6 months for the consular processing, 2 years of conditional permanent residence, and 6 months for the I-829 petition, then we have 46 months, which is just 2 months short of 4 years. I generally tell clients to figure on 3.5 to 4 years to go through the EB-5 immigration process from start to finish, which is how long the client’s funds must be tied up due to immigration legal requirements.

In addition to the immigration legal requirements, the investment funds are tied up due to contractual obligations and sometimes also market forces. EB-5 investments can typically be categorized as loan-based or equity-based. “Loan-based” means that the EB-5 investor invests the $500,000 into an entity such as a limited partnership or a limited liability company, and that entity loans the funds out to a project developer that spends the money on carrying out a project that has the effect of creating jobs. The EB-5 investors own the lending entity, but they have no ownership interest in the project business (viewed by USCIS as the Job Creating Enterprise), although the lending entity might have a security interest in an asset, typically real estate, owned by the project business. “Equity-based” means that the entity, in which the EB-5 investor invests, actually owns the project business, or the commercial building where the project business (Job Creating Enterprise) operates.

In loan-based projects, the investment funds are tied up for the duration of the loan’s term, which determines the deadline for the borrower to repay the loan. Loan-based EB-5 projects typically involve loans with terms ranging from 4 to 6 years. Understandably, the loan term begins to count down only once the funds are loaned out. When the funds are loaned out depends on whether the regional center holds the funds in escrow pending approval of the I-526 petition or the investment funds go straight into the investment and are loaned immediately to the project developer/borrower. In the case of the funds being held in escrow, the loan term does not begin to count down until the funds can be removed from escrow, which typically follows the approval of the I-526 petition. If there is no escrow, then the funds would most likely be loaned out immediately, and so the loan term would begin to count down immediately. The bottom line is that with escrow the EB-5 investor’s funds will be tied up for the processing time of the I-526 petition plus the loan term, or, without escrow, the EB-5 investor’s funds will generally be loaned out sooner and so the loan term will be begin counting down sooner without regard to the processing time for the I-526 petition.

With an equity-based project, the EB-5 investor typically owns a share in an entity that owns a large commercial property or owns a functioning business with production equipment and possibly business premises. Where a commercial property is involved, it is typically necessary for the property to be sold in order for the investors to cash out, and so the time frame for selling the commercial property will be open-ended. Alternatively, with production facilities and equipment, the EB-5 investors’ shares might be subject to transfer restrictions for a minimum holding period during which the shares cannot be sold. In addition, once the transfer restriction period passes, the investors will still have to wait whatever time it takes in order to find a buyer for individual shares or for the business in its entirety.

The time frame for cashing out the EB-5 investment depends on the time period for completing the EB-5 immigration process, the time restrictions imposed on the investor by contract, and, in the case of equity-based investments, the time that it takes to sell the property or business. In general, the shortest possible time frame for cashing out from the investment would be after 3.5 to 4 years, which is the time frame for completing the EB-5 immigration process. Loan-based projects, provided that the loans are repaid on time, have the greatest potential for repayment in the shortest period of time, since they offer a specific repayment date, typically after a loan term ranging from 4 to 6 years. Equity-based programs typically have open-ended time frames for cashing out, and so they should be entered into only by those investors who are able and willing to make a longer-term investment.

Does the Location of a Regional Center’s Headquarters or the Regional Center’s Project Matter?

EB-5 investors often wonder about how important the location of a regional center’s headquarters or its project is for the success of their immigration process. The location of the regional center’s project is important, but the location of the regional center’s headquarters is not.

Some EB-5 investors believe that they need to live near the project or the regional center’s headquarters. Often, these same EB-5 investors feel a sense of comfort that the regional center’s project or its headquarters is located near to where they will live in the U.S. In reality, living near to the regional center’s headquarters or project may be of psychological comfort, but it serves no legal purpose. The immigration law governing the EB-5 immigrant investor program in now way requires the EB-5 investor to live near the regional center’s project or headquarters. Moreover, the EB-5 investor plays no role in the day-to-day management of the regional center’s project. The EB-5 investor may take comfort in being able to “keep his eye on” the project, in the sense of watching the progress of the construction project, if the project involves construction of a building. However, the EB-5 investor cannot monitor the finances of the project business or count the number of jobs being created by driving past the construction site. All of that information is contained in internal documents maintained at the regional center’s headquarters, and can be obtained by calling the regional center and having the information and documents emailed or faxed.

The location of the project is important from the perspective of the unemployment rate or the population in that location. In order for a project to qualify an EB-5 investor for permanent residence based on a $500,000 investment, rather than a $1,000,000 investment, the project has to be located in a Targeted Employment Area (“TEA”) or in a Rural Area. A Targeted Employment Area is an area that has an unemployment rate that is 50% above the national unemployment rate. A Rural Area is an area that has a small population of less than 20,000, and is not included in the Metropolitan Statistical Area (“MSA”) of a larger city. An MSA is the catchment area for calculating unemployment and other statistics pertaining to the population of a city and its surrounding area. The bottom lines is that a rural area must both have a small population of less than 20,000, and it must be remote from a city large enough to have its own MSA.

The designation of Targeted Employment Areas is a very technical matter that has become very important and contentious in the EB-5 immigration field. Each state’s governor designates the agency or governmental official who will determine which areas qualify as a TEA. In most states, the state department of labor is vested with this responsibility. However, there are some states, like Texas, that believe firmly in the decentralization of government authority, and so Texas has designated local mayors and judges to make these determinations, albeit in reliance on unemployment statistics prepared by the state’s department of labor. One other important point is that most states break their unemployment data down to the level of census tracts, which are areas designated by the federal government when it conducts the census, or counting of the population, every 10 years. Other states, like Texas once again, do not break their statistics down to the level of census tracts, and so whole cities and towns a lumped together without the possibility of having TEA’s designated within them.

The designation of TEA’s has become contentious in the sense that some states have very eagerly designated areas as TEA’s in the interest of supporting the development of regional center projects, while USCIS has questioned the legitimacy of some such determinations. At one point, USCIS had taken it upon itself to question the legitimacy of every TEA designation. However, after much resistance from regional centers, immigration attorneys, and state governments, it backed off from that position, and has reserved for its self only the right to question the state’s methodology for calculating the unemployment rate, but not for designating the TEA. Nevertheless, it is still advisable for the EB-5 investor to examine whether the regional center has obtained a TEA designation which is truly supported by the unemployment data, or else USCIS will challenge the designation, which could, if USCIS prevails in such a dispute, result in the EB-5 investor being denied as not qualifying based on a $500,000 investment in the project at that location. Despite backing off from questioning the TEA designation in every case, USCIS will not let an obviously illegitimate TEA designation go unchallenged.

The bottom line is that the location of a regional center’s project is extremely important, from the perspective of whether the project qualifies the EB-5 investor for permanent residence based on a $500,000 investment rather than a $1,000,000 investment. However, where the regional center’s project and headquarters are located in relation to where an EB-5 investor will live, in the U.S., is completely irrelevant. Therefore, the EB-5 investor should not select a regional center just because it has a project located near to where the EB-5 investor will live so that the EB-5 investor can “keep an eye on” the project, but rather it is far more important for the EB-5 investor to select a regional center program based on that program’s experience, track record, and the quality of the project that the regional center is currently offering to the EB-5 investor.

What guaranty is there that my investment will be repaid?

The regional center and the project operator are prohibited by USCIS from offering any kind of guaranty, since Congress created the EB-5 program based on the investor investing money, not lending it with a guaranty of repayment. Investment implies that the funds are placed at risk of partial or complete loss. Therefore, USCIS takes the position that if the regional center or the project operator offers a guaranty to the EB-5 investor, then the funds are not properly at risk as an investment, and, hence, do not qualify under the EB-5 program.

However, I would like to point out that the EB-5 investor can invest in an EB-5 project entity that, in turn, loans money to a project developer. The EB-5 project entity can require that the project developer/borrower guaranty repayment of the loan and provide collateral and security for the loan. The main point here is that nobody is providing a guaranty to the individual EB-5 investor, but rather to the EB-5 project entity in which the EB-5 investor invested. This is an approach that USCIS has approved in many projects.

What Factors Are Important In Selecting An Immigration Attorney To Handle Your EB-5 Immigration Process?

The EB-5 immigration process is a complex area of immigration law, which requires in-depth knowledge of the statutes, regulations, and precedent decisions governing the EB-5 program, knowledge of USCIS’s current policies and interpretations of the statutes and regulations, and extensive experience from past EB-5 cases about how to handle complications that arise in connection with the investor’s source of funds or with the EB-5 project. Therefore, the attorney’s knowledge and experience in the EB-5 field, as well as his or her overall lawyering skills are of paramount importance.

Knowledge, Experience, and Skill

The success of the immigration process ultimately depends on how well the EB-5 project and how well the investor’s source of funds satisfy the immigration legal requirements. However, it comes down to the attorney’s skill in explaining and documenting convincingly to USCIS how the project and the investor’s source of funds satisfy the immigration legal requirements. Moreover, before it even reaches the point of preparing and filing the I-526 petition, the EB-5 investor relies on the attorney’s knowledge of the EB-5 field and experience in assessing the chances of success with the investor’s source of funds and with the EB-5 project that the investor is considering to invest in.

Commitment to Serving the Client’s Interests First

The attorney’s accountability and accessibility to the client, as well as his or her commitment to the client’s success and safety are also of crucial importance. Over the years, some attorneys become complacent and begin to take their clients for granted. In its milder form, this takes the form of not responding to clients’ calls or emails, and not answering the clients’ questions. In its more serious form, attorneys become focused on receiving finders fees from regional centers in addition to collecting legal fees from clients, and then the attorney might aim to refer clients to the regional center that pays the highest referral fee rather than by assisting the client to determine which regional center is safest for the client’s immigration process. Whether the attorney has ulterior financial motives contrary to the client’s interests is a factor to consider in selecting an attorney. One should also consider how promptly the attorney responds to the client’s calls and emails, as well as how thoroughly the attorney answers the client’s questions.

Communications with the Attorney

As previously mentioned, it is very important that the attorney communicate promptly with the client and answer the client’s questions thoroughly. It is also important that the attorney answers the client’s questions and explains the immigration process in a manner that the client understands. In other words, the attorney should not speak in legalistic terms that only other immigration attorneys would understand, but rather in terms that the average person can understand. At the same time, the attorney should never make you feel that your questions indicate ignorance or are unimportant. Instead, the attorney should assist you to become an informed consumer. Finally, if you feel more comfortable speaking a language other than English, the attorney should be willing to use interpreters or his own assistants who speak your native language in order to make sure that you understand important information that he or she is discussing with you. There are many immigration attorneys who are themselves bilingual or multilingual.

Thoroughness in Preparing the Case

Many small details of the client’s source of funds or the project’s operation and job creation methodology can make or break the client’s EB-5 case. Therefore, it is of crucial importance that the attorney examine the investor’s source of funds throughly to make sure that no questions will arise as to its legality or that the trail of funds can be clearly documented. Beyond the source of funds, it is also important that the attorney determine whether the client or the client’s family members could be denied in the immigration process due to past criminal convictions, past immigration violations in the U.S., use of illegal drugs, association with any groups that pose a security threat to the U.S., Communist party membership, among others. Also, USCIS looks to see if the investor has been the target of administrative proceedings by government authorities or of civil litigation by private parties, either of which would be indicative of the investor having engaged in illegal or fraudulent activities that have given rise to such legal actions against the investor. Finally, the attorney must examine carefully the project’s compliance with all immigration legal requirements, in particular, how it will prove sufficient job creation at the I-526 and I-829 petition stages. The EB-5 investor must be sure that the attorney will “go the extra mile” in handling the client’s case in the most thorough, carefully thought out, and safest manner possible.

Does the Attorney’s Location Matter?

When applying for permanent residence through the EB-5 immigrant investor program, it does not matter where the investor’s immigration attorney is located. Under the EB-5 program, there is no possibility for in-person submission of documents or presentation of the case to USCIS. Instead, immigration attorneys prepare petitions with supporting documents, and ship those documents to the USCIS office that adjudicates the petitions. The same is true of the process through U.S. consulates abroad. Pretty much no consulate nowadays allows for immigration attorneys to attend interviews, and even if they do allow attendance, the consular officers are not interested to hear explanations from the attorney, but rather from the investor directly.

Some EB-5 investors like the comfort and convenience of walking into the immigration attorney’s office. While this might facilitate face-to-face communication and the dropping off of documents in-person, it does not really improve the chances of success in the immigration process. The main factors in the attorney-client relationship that maximize the chances of success are 1) the attorney’s knowledge, experience, and skill, 2) thoroughness in preparing the investor’s case, 3) the quality of communications and cooperation between the attorney and client, and 4) the quality of cooperation with the regional center.

Good Cooperation among the Attorney, Client, and Regional Center

The EB-5 process cannot succeed based on the attorney’s work alone. First of all, the client needs to disclose to the immigration attorney any arrests, convictions, administrative proceedings or civil litigation against him or her, since these can adversely impact the client’s EB-5 case, and so the attorney needs to know about them in order to assess the potential impact on the case. The attorney needs the complete cooperation of the client in disclosing the information and documentation that the attorney considers useful and necessary for proving the legal source of the client’s funds.

The same holds true for the regional center, namely that the regional center needs to provide the documentation that the attorney considers useful and necessary for, among other things, demonstrating that the regional center’s project will create at least 10 jobs per investor; explaining how the project will spend all funds from EB-5 investors in the job-creating business activity, and will do so without providing any guaranty or redemption option; establishing the credibility of the project and its likelihood to achieve successfully the stated business objectives; documenting that the business is located in a Targeted Employment Area (TEA), which qualifies the EB-5 investors based on an investment of $500,000; and confirming that the project will operate in the geographic area and in an industry that were approved for the regional center, and will use the economist model and job creation methodology that the regional center was approved to use.


Aside from choosing the best qualifying regional center and project, the selection of the right immigration attorney is crucial to the investor’s success in the EB-5 immigration process. The investor should evaluate the immigration attorney to ensure that he or she has the skills, experience, knowledge, honesty, and ethical rectitude discussed above. At the same time, the investor must be prepared to give the immigration attorney his or her full cooperation, honesty, and openness in order to succeed in the immigration process because the immigration attorney cannot succeed without having sufficient documentation from the investor and without knowing all of the investor’s circumstances that could adversely affect the case. It is important for the investor to volunteer all remotely relevant information, and let the immigration attorney determine whether it is relevant or important for the case.

How Much Time Must a Permanent Resident or Conditional Permanent Resident Spend in the U.S.?

This is the question commonly asked by people who are considering whether to apply for permanent residence in the U.S. There is no one size fits all answer to this question. Moreover, the issue and question should be framed instead in terms of how much time can a legal permanent resident ("LPR") or a conditional legal permanent resident ("CLPR") spend outside the U.S. without losing the LPR or CLPR status.

It is standard procedure for Customs and Border Protection ("CBP") inspectors to ask LPR's and CLPR's returning from abroad how long they were away. This seemingly harmless question can snowball into the person losing his or her LPR or CLPR status in the U.S. based on the idea that the person has "abandoned" the LPR or CLPR status. If the LPR or CLPR has been away for more than 1 year, then that is irrefutably considered abandonment. If the LPR or CLPR has spent more than 1 month outside of the U.S. at one time, the CBP officer might inquire further as to whether the person ever established residence in the U.S., and if so, whether the person is maintaining the residence in the U.S. The more months that a person is away, the greater the likelihood of a challenge of this sort. If the CBP officer is not satisfied that the the LPR or CLPR has established and/or maintained residence in the U.S., then he or she would present the LPR or CLPR with the choice of renouncing the LPR or CLPR status and being admitted to the U.S. as a non-immigrant or facing a removal procedure and going before an immigration judge. In the event that the LPR or CLPR would be ordered removed by an immigration judge, or would depart from the U.S. after the commencement, but before the conclusion, of removal proceedings, then that person would be subject to a 5-year bar from returning to the U.S. This is, therefore, a serious matter.

What kind of evidence can the LPR or CLPR submit in order to counter such a challenge by the CBP officer?

• Evidence of employment and/or business activity in the U.S.

• Evidence that the spouse and children are living in the U.S., that the spouse is employed or engaging in business in the U.S., and that the children are attending school/university or working/engaging in business in the U.S.

• Evidence of filing tax returns in the U.S. as a resident.

• Evidence of maintaining a house, condominium, apartment, automobile(s), etc. in the U.S.

• Evidence of maintaining bank accounts, credit card accounts, health insurance, automobile insurance, life insurance, membership in clubs or organizations in the U.S.

• Personal, business, or government correspondence received at the U.S. address.

In case the LPR or CLPR does not have this evidence on hand at the time of admission and the CBP officer is not showing any indication of relenting in this challenge, then the LPR or CLPR should try to reason with the officer to allow for a deferred inspection, which would give the LPR or CLPR the opportunity to gather and present the above-mentioned evidence of establishing and maintaining residence in the U.S. at a follow-up interview at a designated CBP office in the area where the LPR or CLPR lives.

If a person must spend a lot of time outside of the U.S., then I would suggest, in order to minimize the chances of facing this harassment, that the LPR or CLPR travel between the U.S. and whatever country abroad more frequently so that the amount of time away from the U.S. is as short as possible, regardless of how long the person stays in the U.S. between trips.

In the case of a married couple immigrating under the EB-5 program, if one of the spouses will still need to travel abroad frequently on business, it would be a good idea for the spouse, who will spend more time in the U.S., to be the investor, and as such the "anchor" for the family who would have less exposure and vulnerability to challenges by CBP officers. In general, if a EB-5 investor and his family are not ready to move to the U.S., then the investor and family should hold off on immigrating under the EB-5 program until they are ready to move to the U.S. However, one should also bear in mind that it currently takes around a year in order to obtain conditional permanent residence in the U.S. under the EB-5 program. Plus, if the investor and family are obtaining an immigrant visa through the consulate, the immigrant visa is valid for 6 months, and so it gives them additional time to rearrange their affairs in the country of origin prior to moving to the U.S.

The bottom line to remember is that LPR or CLPR status in the U.S. are a “use it or lose it” proposition.

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Anthony Olson, P.A. - Sarasota Immigration Attorney 
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Telephone:  +1 (941) 362-7100 
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