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EB-5 Visa Blog

Dispelling Common Myths about EB-5

Kate Kalmykov

BY KATE KALMYKOV

EB-5 is a property purchase program

 

FALSE. An important stipulation of an investor’s eligibility for an EB-5 visa hinges on the requirement that the investment must lead to the creation of at least 10 full time jobs for American workers. Purchasing property in the United States does not satisfy this requirement, so it would not qualify one for an EB-5 visa.

 

U.S. residence must be maintained to hold an EB-5 visa

 

TRUE. EB-5 visas establish the investor as a permanent resident in the United States. As such, any potential investor looking to invest in the United States through the EB-5 program should be prepared to live and work in the United States primarily. If an investor has obtained an EB-5 visa and does not maintain residence in the United States for at least six months, he or she may be at risk of violating the terms of their green card, unless they obtain a reentry permit that allows them to remain abroad for extended periods of time.

 

EB-5 investments are government investments

 

FALSE. When an investor decides to make an EB-5 investment in the United States there is never any instance where the investment funds go to the U.S. government. EB-5 investments are made to private commercial enterprises. Government does play a role in the approval of a regional center, and some regional centers are even publicly owned, however, the EB-5 investment is never made to a government entity.

 

Previous Regional Center approvals may mean future approvals

 

FALSE. It is wrong to think that a regional center with a history of a high rate of approvals for a specific project will be looked at more favorably in the future. There are no guarantees and any change in material facts or issues related to the project would alter USCIS adjudication of the petition. Additionally, USCIS largely adjudicates I-526, I-829 and I-924 petitions on a combination of statute, regulations and policy guidance. This policy guidance is subject to change at any point, which may alter the way USCIS adjudicates its petition.  An example of this was USCIS reversing its policy with the respect of tenant occupancy jobs in February  2012.

 

EB-5 is guaranteed

 

FALSE. Qualifying EB-5 investments must be at-risk investments, meaning that the petitioner has placed the required amount of capital at risk for the purpose of generating a return on that capital. Evidence of mere intent to invest, or arrangements which entail no present commitment, are not suffice to show the capital was place at risk.

 

Once a TEA, always a TEA

 

FALSE. A common misconception is that once a particular area is designated as a targeted employment area (TEA) it will retain this status indefinitely. In order to qualify as a TEA, the area in question must either be a rural area or an area where the unemployment level is 150 percent higher than the national average. If an area designated as a TEA ceases to be considered a rural area, or if the unemployment level in the area goes below 150 percent of the national average, then the TEA will likely lose its designation as such.

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