Labor Immigration Law

The NPR ran a story yesterday, March 5th, on the EB-5 investor visa program.  While the story is intended for a general audience and is fairly general in nature, it is interesting to read (or listen to the podcast) a mainstream media story about this growing in importance and profile program.

One of the points of the story is that the EB-5 program may be considered as a unfair “pay-to-play” program where foreign nationals “buy” their U.S. visa.  Of course, the story provides plenty of support for the EB-5 program which is considered by many to be a beneficial job-creating and foreign capital-attracting program in these difficult economic climate.

NPR story:  For Some Immigrants, The Ticket To A Visa Is A Check.

Among our clients and readers, we  have many entrepreneurs and start-up companies which may be interested in a recent development in Congress.

Senators Kerry (D-MA) and Lugar (R-IN) have introduced a new bill in Congress seeking to drive job creation and increasing America’s global competitiveness by helping immigrant entrepreneurs secure visas to the United States.  The bill’s title is the “StartUp Visa Act of 2010″ and will allow an immigrant entrepreneur to receive a two-year visa if they can show that a qualified U.S. investor is willing to dedicate a significant sum – a minimum of $250,000 – to the immigrant’s startup venture.   Please see full text of the draft bill and Senator Lugar’s press release.

The Act would amend immigration law to create a new EB-6 category for immigrant entrepreneurs, drawing from existing visas under the EB-5 category, which permits foreign nationals who invest at least $1 million into the U.S., and thereby create ten jobs, to obtain a green card.  After proving that he or she has secured initial investment capital and if, after two years, the immigrant entrepreneur can show that he or she has generated at least five full-time jobs in the United States, attracted $1 million in additional investment capital or achieved $1 million in revenue, then he or she would receive permanent legal resident status.

We will monitor the path of this bill through Congress and provide updates as we have them.

About EB-5 and the Regional Center Program

In 1990, the U.S. Congress created the fifth employment-based preference category (EB-5) for qualified foreign entrepreneurs seeking to invest in a business that will benefit the U.S. economy and create or save at least 10 full-time jobs. The basic amount required to invest is $1 million, although that amount is reduced to $500,000 if the investment is made in a rural or high unemployment area.  Of the approximately 10,000 EB-5 green cards available each year, 3,000 are reserved for foreign nationals who invest through a Regional Center.

A Regional Center is a private enterprise or corporation or a regional governmental agency with a targeted investment program within a specific region.   The Regional Center Investment Program allocates 3,000 green cards each year for people who invest in designated Regional Centers.  The program does not require that the foreign investor’s enterprise itself directly employ 10 U.S. workers.  Instead, it is enough if 10 or more jobs will be created directly or indirectly as a result of the investment. As a result, he Regional Center Investment Program aids foreign investors by directing and professionally managing their investment in the designated business and geographic focus of their Regional Center.

Current Regional Centers

An updated list of approved EB-5 Regional Centers can be found at USCIS’ website below:

Immigrant Investor Regional Centers (external link)

As of the date of this article, there are 75 approved Regional Centers and there are approximately 50 Regional Center applications pending for review at USCIS California Service Center.

Contact Us for Information and Help

Please contact us if we can help you  understand the EB-5 Regional Center program, help you establish eligibility and guide you through the process.

In a December 14, 2009, meeting, USCIS has provided some helpful information about the current state of the EB-5 program.

I-526 Premium Processing Possible Later in the Year

A review of the question of reinstating premium processing for I-526 petitions will be done during the second quarter of 2010.  USCIS will reinstate premium processing if it determines that it has sufficient resources at the California Service Center to adjudicate I-526 within the 15-calendar day window.

EB-5 Statistics

As of December 14, 2009, USCIS was able to provide only statistics for fiscal year 2009 (FY 2009).  Accordingly, in FY 2009, where were 1,028 I-526 petitions (EB-5 immigrant petition) filed, of which 966 were approved and 163 denied.   Also, in FY 2009, where were 437 I-829 (removal of condition) petitions filed of which 335 were approved and 55 denied.

Note that these numbers do not add up because not all petitions filed during FY 2009 are adjudicated during FY 2009.  Additionally, some petitions filed during FY 2008 are adjudicated during FY 2009 and are included in the numbers above.

The October 2009 Visa Bulletin which is the first visa bulletin for the new FY2010 fiscal year was released earlier today by the State Department.   This October 2009 Visa Bulletin has been widely expected not only to see the EB-3 category go back to some availability of visas but also to use the movement in this month’s Visa Bulletin to gauge the level of visa numbers movements for this upcoming fiscal year.

EB-2 Numbers Indicate Minor Movement

The October 2009 Visa Bulletin dates suggest a minor forward movement as follows:

• EB-2 China moves forward by a little over two (2) months from January 8, 2005 to March 22, 2005;
• EB-2 India moves forward  by two (2) weeks from January 8, 2005 to January 22, 2005; and
• EB-2 Rest of World (“ROW”) remains current.

EB-3 Visas Are Available Although Forward Movement May Be Slow

As expected, the October 2009 Visa Bulletin brings a number of changes.  Most notably, the EB-3 category is no longer unavailable and the visa cut-off dates are as listed below.  We also provide the visa cut-off dates from the April 2009 Visa Bulletin which was the last time EB-3 visas were available.

• EB-3 China has a cut-off date of February 22, 2002 (compared to March 1, 2003 in the April 2009 Visa Bulletin);
• EB-3 India has a cut-off date of April 15, 2001 (compared to November 1, 2001 in the April 2009 Visa Bulletin);
• EB-3 ROW has a cut-off date of June 1, 2002 (compared to March 1, 2003 in the April 2009 Visa Bulletin).

We have included a comparison with the April 2009 EB-3 visa numbers to illustrate that even though the State Department has made EB-3 visas available, the fact that the government chose to set cut-off dates in October 2009 which are earlier than the April 2009 cut-off dates indicates that a slow movement in EB-3 over the 2009 fiscal year is to be expected.

EB-5 Is Unavailable

The EB-5 category is now unavailable.  This is due to the expiration of the EB-5 Pilot program on September 30, 2009, which means that no visas can be issued after September 30 under the EB-5 category until Congress extends it.  Once this happens, the visa availability is expected to become current.

USCIS has updated the list of regional centers which provide interested investors with an opportunity to put money in a specially-designated center and become eligible for EB-5 investor green card.

There are currently 49 approved and active regional centers in 21 states. By contrast, as of 6/30/08, there were only 23 approved regional centers.  According to USCIS, each time a new regional center is approved, their information is posted to the webpage, generally within 5 business days.

In a Memorandum dated June 17, 2009, Donald Neufeld, the Acting Associate Director for Domestic Operations, has provided some guidance on the employment-based fifth preference (EB-5) green card category reserved for entrepreneurs willing to invest a substantial capital into the U.S. and create at least 10 full-time jobs.

About EB-5

Section 203(b)(5) of the Immigration and Nationality Act creates a class of immigrant visas, EB-5, for individuals who invest a specified amount of capital in the U.S. economy and who will “create full-time employment for not fewer than 10″ qualified employees.   Initial EB-5 status has conditions which condition must be removed at the end of a two-year period by filing an application to remove conditional residency and by showing that the applicant has continued to meet section 203(b)(5) requirements.

The Neufeld Memorandum and Job Creation

The Neufeld Memorandum directs the adjudicators that a specific business plan be required as part of each EB-5 application which business plan must provide accounting of the required number of jobs created within the two-year period of conditional residency.  However, the adjudicators are given some flexibility as to  the timing of job creation.

For purposes of determining the period in which job creation is counted, USCIS has indicated that such period begins six (6) months after the adjudication of Form I-526 and the business plan filed in support of Form I-526 must make sure that job creation covers this 2-year period commencing 6 months following adjudication.

The Neufeld Memorandum specifically indicates that certain construction jobs can be included in the count of 10 full-time jobs required by EB-5.  Section 203(b)(5) requires that 10 full-time jobs be created by the proposed venture.  Full-time employment is defined as “employment in a position that requires at least 35 hours of service per week at any time, regardless of who fills the position” (emphasis added).  USCIS has advised previously that intermittent, temporary or seasonal jobs do not qualify for “full-time jobs.” However, the Neufeld Memorandum specifically indicates that some construction-related jobs should qualify to be considered full-time jobs and should therefore be counted.  The focus on the inquiry, according to the Neufeld Memorandum, should be whether the position created is continuous full-time employment rather than intermittend, seasonal job.  This shift in focus allows some full-time construction jobs, generated from the foreign entrepreneur’s investment, to be counted towards the 10 jobs requirement.

An additional clarification by the Neufeld Memorandum — independent contractors and multiple part-time jobs cannot be used and be counted towards the jobs requirement.

About the EB-5 Visa and Regional Centers

Under section 203(b)(5) of the Immigration and Nationality Act (INA), 8 U.S.C. § 1153(b)(5), 10,000 immigrant visas per year are available to qualified individuals seeking permanent resident status on the basis of their engagement in a new commercial enterprise (generally of at least $1 million).  Of the 10,000 investor visas (i.e., EB-5 visas) available annually, 5,000 are set aside for those who apply under a pilot program involving an CIS-designated “Regional Center.”

The Regional Center program was established by Congress as a pilot program to determine the interest of foreign investors, in exchange of a green card, in specific investment areas, determined by the U.S. government, which are in need of investment capital and development.  The general requirement of $1 million investment is lowered by half, to $500,000, for such Regional Centers.

A Regional Center is generally set up and run by a third party, that allows the prospective foreign national to invest $500,000 (in an economically depressed area in the US), but not have to be involved in the oversight of the investment nor the job creation. The Regional Center personnel are set up to create 10 new jobs on behalf of the investor and are involved in the day to day operations of the whatever investment vehicle that they are overseeing.  The Regional Center program thus allows foreign investors to obtain the benefit of their investment, receive a green card, and not have to be involved in the day-to-day operations of their U.S.-based business.

Extension of the Regional Center Program

The Regional Program is a temporary program, which was scheduled to expire on September 30, 2008.  However, Congress has extended its expiration through March 6, 2009.    This is only a short extension to allow Congress time to debate and discuss the future of the program.

The U.S. House of Representatives has passed the bill authorizing the extension of the Regional Center program, but the Senate has yet to review it as of the time of this writing.  It then has to be signed by the President into law.   However, in the meantime, the EB-5 program has been authorized by a stop-gap resolution signed by the President.

Fiscal Year 2008 Regional Center Statistics

To support the popularity of the Regional Center program, USCIS recently releases statistics on EB-5 and the Regional Center EB-5 visas.  During Fiscal Year 2008, there were:

• 12 new EB-5 regional centers were approved;
• 1017 Forms I-526, Immigrant Petitions for Alien Entrepreneur filed; and
• 350 Forms I-829, Petitions by Entrepreneurs to Remove Conditions filed.

These numbers suggest some very good news for foreign EB-5 investors who seek to obtain a green card – while Congress is designating more and more new Regional Centers, there are still plenty of investor visas available to fill the annual cap of 10,000.