1. How does the USCIS EB-5 Program work?
The United States government’s EB-5 program allocates 10,000 visas per year for foreign investors and family members whose qualifying investments result in the creation of at least 10 full-time jobs for U.S. workers; in areas of high unemployment where the United States Citizenship and Immigration Services (“USCIS”) has approved Regional Centers, the qualifying investment requirement is $500,000; if handled properly through an experienced and reputable EB-5 program such as the one managed by Inland Investor Visa Group 8 (“Inland”), a foreign investor and his/her family can obtain a conditional Green Card in as little as 6 months and a permanent one in as little as 3 years (see question 20 for more detail on the time line).
2. What are the primary benefits of possessing a U.S. Green Card?
A. Safe Haven for Money : in a very uncertain political and economic world, the U.S. remains the most secure place to bank or invest your money;
B. Education : your children will gain access to the best system of higher education in the world and you will enjoy in-state or resident tuition at all public universities and colleges; foreign students without a
Green Card would be subject to out of state rates which are
typically 25%-50% higher;
C. Work : you are allowed to work for any company anywhere in
the U.S., or you can start your own business;
D. Travel : you can travel anywhere in the U.S. and leave and enter the country without fear of being denied at the port of entry;
E. Legal Rights : all of your legal rights are protected under U.S. law (except the right to vote, which is available upon becoming a U.S. citizen, should you wish to) including eligibility for Social Security (if you have worked for 10 years in the U.S.);
F. Housing : in most cases, it is much easier to be approved for a home mortgage and to obtain lower interest rates;
G. Medical Treatment : you gain access to the best and most private medical care available anywhere in the world;
H. Citizenship : you are automatically eligible to apply for U.S. Citizenship and have a U.S. Passport after living in the U.S. for 5 years.
3. Who is eligible?
Any foreign non-citizen individual or family (husband, wife and unmarried children under 21), from virtually any country or walk of life
(there are some limitations).
4. What is the minimum?
$500,000…Can it be in installments? All $500,000 must be invested before the I-526 can be submitted for processing; however, the Inland Investor Visa Program will accept installment payments prior to submitting the I-526 application, for the purpose of securing a place in a particular project and/or for initiating preparation of the I-526 application.
Can money gifted by a parent or other relative be used for an EB-5 Investment? Yes. The EB-5 regulations state that the capital must have been obtained “through lawful means.” Therefore, the only requirement is to demonstrate that the giver made the money “lawfully” and to pay applicable gift taxes, if any.
5. What is included in the “Processing Fee”?
The $50,000 Processing Fee beaks down as follows:
• $24,000 – Marketing expenses (e.g., Broker/Agent, etc.)
• $10,000 – Payment for preparation and filing (incl. initial fee)
of the I-526 by Investor’s immigration lawyers (Fragomen)
• $15,000 – Inland administrative expenses
• $1,000 – Misc. Fees and Expenses (e.g., escrow fee, etc.)
6. Do I need to be an “accredited investor”?
Yes; this is defined under U.S. regulations as having a “net worth” of at least $1 million (not including personal residence) or make at least $200,000 per year for the past 2 years plus one year forward ($300,000 together with spouse, if married).
7. How is the investment structured?
Each investor contributes US$550,000 to the Limited Partnership (see question 9 below): $50,000 goes to cover up front Processing Fees – see Question 6) and $500,000 is placed in escrow (see questions 12 and 15 below) until it is loaned by the Limited Partnership to the specific Project (see question 10 below); the General Partner (Inland) manages the Limited Partnership on behalf of the individual EB-5 investors (the Limited Partners or LPs); the Limited Partnership receives income in two forms: (i) interest payments on the loan, which is paid quarterly to the LPs, and (ii) return of the $500,000 principal after the 6 year term of the loan.
8. What is a limited partnership?
A Limited Partnership (in this case, Inland Temecula Investor Visa Group I, L.P.) is authorized by the California state government.
9. What is the Project? How are the 10 jobs created?
The current Project is a 65,000 sq.ft., four story, mixed use commercial office building located in Temecula, California, called the “Truax Building”; The Project will cost $18.5 million to construct and the owner, Bernie Truax has already contributed $2.5 million in equity; the remaining $16 million is being raised through $500,000 contributions of 32 EB-5 investors and will be loaned to Truax. Since each investment is required to generate 10 jobs, the Project will need to create 320 qualifying jobs; Inland’s independent economic consultant (who has successfully performed many such studies for the USCIS) has performed a detailed analysis of the Project and determined it will generate 570 new jobs (250 more than needed), so the Project will safely meet the USCIS requirements.
10. Must I stay in the U.S. (or the Project location)?
You are expected to stay in the U.S. most of the time; once you receive a Green Card, you are expected to establish residency in the U.S. (by opening a bank account, buying/renting a home, obtaining a Driver’s License and Social Security Card and paying taxes); you can live anywhere, it does not have to be in the same area as the Project; if you stay in the U.S. for 6 months out of the year, there is no problem but if you want to be gone for longer than that, you must obtain a re-entry permit (USCIS form I-131) which is readily obtainable.
11. How is my money protected?
Inland recognizes this is very important and we have put the following safeguards in place:
• Your money is initially placed directly into a secured escrow account at East-West Bank where it can only be released upon receipt of notification from the USCIS that the investor’s I-526 filing has been received and then, only to the General Partner, Inland.
• The Project developer and builder have put in place Payment and Performance Bonds from a credit worthy Surety in the full
amount of the construction cost; the Bonds ensure that even
if something happens to the Developer/builder, the money to
complete the Project will still be available;
• Inland has retained the services of a Funds Manager to verify that the money loaned to the developer is actually spent on the Project, according to the agreed upon budget.
• The Project developer (Borrower) is required to put in place the full range of commercial insurance, including Builder’s All-Risk and Business Interruption; • The Inland Limited Partnership has a first deed of trust on the Project; in this way, even if something were to happen to the developer the Limited Partnership would take over ownership of the building, thereby ensuring that a project worth at least the amount of the loan will be built.
12. Is my investment guaranteed?
According to USCIS rules, the investments cannot be individually guaranteed; however, as indicated in question 11 above, the safeguards put in place by Inland result in dramatically reducing your risk.
13. Do I get my investment back if I do not get my Green Card?
You will receive a full refund of the $500,000 investment if your I-526 (the key step in obtaining a “conditional” Green Card) is not received; however, once you have received your conditional Green Card, USCIS rules do not allow your money to be refunded in the unlikely event that your permanent Green Card (I-829) is not received;
Note that the risk associated with not obtaining the I-829 is very small — this is because the USCIS review leading to issuance of the I-829 focuses primarily on two areas: (i) were the jobs generated? (ii) is the investor still active in the project and still fully invested? Because of Inland’s management of the program, these criteria are easily met.
14. What are the benefits of using an Escrow account?
Placing your money in an escrow account with a reputable bank ensures that the money cannot be used for purposes other than as described in the investor documents; under the Inland program, the agreement with East West Bank’s escrow manager (which you will review and sign) will not allow your money to be released until the USCIS has formally notified you that your I-526 application has been received. Re the Loan vs. Investment, many of Inland’s competitors require investors to actually invest in a project, which typically means that any payments to investors (including repayment of principal) are dependent upon how well the project itself performs; under the Inland program, investors place their money in a Limited Partnership which then loans the money to the project’s owner – this means that regardless of how well the project performs, the owner is contractually obligated to make interest payments according to a regular schedule and to repay the loan on a date certain (in this case, 6 years after the first loan is made) – this approach involves much less uncertainty/risk.
15. Must I speak or read English?
No, you do not need to be proficient in English to obtain an EB-5 Green Card or to apply with the Inland Program; Inland has full time employees who speak Chinese fluently and, if you speak another language, we can obtain translators. Please note that investors must sign the English version of all formal documents.
16. What is the difference between a “conditional” Green Card and a permanent” Green Card?
Once your I-526 application is approved, you will receive a “conditional” Green Card which is valid for 2 years – with the exception of that time limit, the conditional Green Card confers all the rights and privileges of a permanent Green Card; 21 months later, a 3 month window opens up during which you must file an I-829 application with the USCIS to verify that the requisite number of jobs have been created and that all of the money was invested; once this has been confirmed, a “permanent” Green Card is issued
(see question 20 for further details on the time line).
17. What information is required for the application?
A number of documents are required – Inland and the Investor’s immigration attorneys (Fragomen) will assist you with their preparation; in general, the information falls into 2 major categories:
• Business or Professional background: brief biographies and description of your educational and business backgrounds designed to show how you achieved enough financial success to be able to accumulate the necessary wealth to meet the accredited investor requirements;
• Source of funds: you must be able to demonstrate that the funds come from a lawful source; the USCIS requires 5 years of taxre turns, bank records and any other financial records to support this.
18. What if I have been rejected before?
Rejection in the past does not disqualify you, unless the reasons for rejection were related to immigration fraud or other major problems; it is important that you disclose all criminal, medical or U.S. immigration problems to Inland or your immigration attorney beforehand so we can help you evaluate whether there are any issues or not.
19. What is the processing time for: the I-526? The Conditional Green Card? The Permanent Green card?
A number of documents are required – Inland and the Investor’s immigration attorneys (Fragomen) will assist you with their preparation; in general, the information falls into 2 major categories:
The USCIS processing times vary considerably – we have seen I-526 applications approved in as little as 4 months and as long as 14 months; typically, it takes 6-8 months to gain approval for the I-526 application and obtain the conditional Green Card (although, since an interview is required for the conditional Green Card, the location of the interview will affect the timing – if the interview is held in the U.S., the conditional Green Card can typically be issued much faster than if it has to be scheduled abroad); then, 21 months after issuance of the conditional Green Card, it typically take the USCIS 3 months to confirm that the “conditions” have been met – therefore, the I-829 can then be filed to remove the conditions, leading to issuance of a permanent Green Card 2-3 months later; all told, the process is currently taking anywhere from 3 to 3.5 years to complete, from start to finish; however, the timing is largely in the hands of the USCIS and, although Inland can and will move the process as fast as it can, there are no guarantees as to the
timetable for a specific investor.
20. Will this help me (or my children) get a job in the U.S.?
Yes – this will help you or your family members obtain employment in the U.S. but obtaining a Green Card does not automatically provide employment.
21. Will I have to pay U.S. taxes?
Yes, once you obtain your conditional Green Card, you are eligible for all the rights (except voting) and obligations of a U.S. citizen, including the obligation to pay taxes to the U.S. government on income earned worldwide. Note that this does not necessarily mean that the foreign investor’s tax burden will increase –- taxes paid in China, for example, can be deducted from U.S. taxes (i.e., no double taxation) and, generally speaking, assets need only be reported, not taxed (unless they generate income that is not taxed elsewhere); As this can be somewhat complicated, you should seek counsel from your own tax attorney to ensure you fully understand the implications of this or, Inland can assist you in obtaining legal advice on tax matters. Inland’s team includes a Chinese born U.S. tax expert who is fully conversant on this issue.
22. How do I know that Inland is trustworthy?
Inland has been in business in the same location for 23 years; its President Buck Johns is not only a very successful businessman, but he is also a major participant in local, state and national politics (see the “Inland Political Activities Brochure”) – he has been and is friends with several Presidents of the United States as well as numerous U.S. Vice Presidents, Senators, Congressmen and state Governors. Mr. Johns has established a reputation for trustworthiness and success over many decades; similarly, Tom Barnett, Inland’s Executive Vice President, is a former officer in the U.S. Army and has enjoyed a very successful project development career for more than 35 years, the last 13 of which have been in close association with Buck Johns. The track record of Inland and its principals speaks for itself.
23. Can I visit the Project site/Inland Offices?
Inland welcomes visitors to its offices in Newport Beach and encourages investors to visit the Project site as well. The elected officials in the Project communities are enthusiastic supporters of Inland’s projects and we can arrange meetings with the Mayors and other government representatives. In fact, Inland can assist you in obtaining a temporary visa (B-1, H-1B, etc.) by providing you with a letter of invitation from the Mayor of the Project cities.
24. I want to invest in businesses/projects in the U.S.
If you are seeking investments for the purpose of high return, the EB-5 program is not the best approach; the EB-5 program is intended to secure a Green Card for the investor’s family, not to generate high returns and, as a result, it is much less risky; however, Inland is involved in projects which do provide higher returns (but do not result in the investor obtaining a Green Card) and Inland would be happy to discuss participation in such opportunities.
25. I understand that the USCIS is going to begin applying quotas to applicants from China which could result in cut-offs; will this affect me?
If you are a Chinese citizen, then yes.
The Immigration and Nationality Act (INA) allocates approximately 10,000 EB-5 immigrant visas per year and establishes the basis for setting individual country limits. The December 2012 Department of State Visa Bulletin predicted that the quota usage from China could be so high in the fiscal year ending September 30, 2013, that the per country limit may have to be imposed on China in the second half of the fiscal year, since approximately 80% of the world’s EB-5 investors are from China. Even though it appears that a cut-off date for China is not certain for FY2013, the increased demand makes the establish-ment of a cut-off date in the coming years almost inevitable.