Generally
The new law makes available approximately 7.1% of
worldwide visas per year (10,000 visas) for immigrants seeking to
invest (after November 29, 1990), or who are actively in the process
of investing, in a new business in the United States with a capital
of at least one million dollars, so long as the business benefits
the U.S. economy, and provides at least ten full-time jobs for U.S.
workers.
Lower Investment Amount - Targeted Employment
Areas
The amount of investment may be decreased to no less
than $500,000 if the business established is in a rural area or
area of high unemployment, called ``targeted employment areas.''
Three thousand of the ten thousand available visas are set aside
for these "targeted employment areas."
A targeted employment area is determined through the petition providing
both evidence of the statistical area of the proposed investment
and a letter from the state agency that that particular area is
one of high unemployment.
An area of high unemployment is defined as
(1) a rural area (an area outside of a metropolitan statistical
area or outside of a city or town with 20,000 or more people) or
(2) an area experiencing an unemployment rate of at least 150% of
the national average.
Agencies that are approved
to designate high unemployment areas are:
* Alabama Department
of Economic and Community Affairs
* Arizona Department of Economic Security, Research Administration - 733!,
P.O. Box 6123, Phoenix, Arizona 85005
* Connecticut Employment Security Division
* Connecticut Department of Labor
* Massachusetts Department of Employment and Training
* New Jersey Department of Labor, Raymond L. Braucci, commissioner, CW
110, Trenton, New Jersey 08625-0110
* New York State Department of Economic Development
* North Carolina Department of Economic and Community Development, Bruce
Strickland, Director, 430 North Salisbury Street, Raleigh, North Carolina
27603
* Commonwealth of Puerto Rico, Alfredo Salasar, Jr., Administrator, Economic
Development Administration, P.O. Box 362350, San Juan, Puerto Rico 00936
* Texas local mayors of citizens and towns located within a metropolitan
statistical area or within a city or town with a population of 20,000
or more
The amount of required investment may be increased, however, to three
million dollars if the business is opened in an area with a high employment
rate.
New Commercial Enterprise or Troubled Business
"Commercial Enterprise"
A commercial enterprise is defined in a broad manner, including holding
companies, their wholly owned subsidiaries and for profit business operations.
An investment fund may qualify as a commercial enterprise for the purposes
of the fifth preference category so long as the investor is engaged in
the direct management of the enterprise. If the investment fund is organized
as a partnership, then the alien must also be engaged in the management
or policy-making activities of the partnership.
"New Commercial Enterprise"
For the purposes of this section, new is defined as either (1) the creation
of an original business established at the hand of the alien and established
after November 29, 1990, (2) the purchase and reorganization of an existing
business so that a new enterprise results, or (3) the expansion of an
existing business so that the net worth or the number of employees increases
by 40%. For the third option, the investor must still prove that the minimum
amount of investment has been met, and that ten jobs have been created,
however the 40% increase can be achieved by adding together the capital
invested by others, including LPRs and USCs.
"Troubled Businesses"
A troubled business is one that has been in existence for at least
two years and has sustained a net loss of at least 20 percent of the company's
net worth. These investments do not have to create new jobs, but rather
to show that the current number of employees will be maintained.
Requirements of Investment
Investment Amount
The amount of investment required is flexible in that in "high employment
areas," investors are required to invest 3 million dollars, whereas
in "targeted employment areas," investors are only required
to invest $500,000. If the investment does not take place in either of
these areas, the required amount of investment is 1 million dollars.
A "high employment area" is defined as one that is not a targeted
employment area and that has unemployment rates that are significantly
below the national average.
A "targeted employment area" is defined as a rural area (outside
of a city or town with 20,000 or more people) or an area experiencing
unemployment of at least 150% of the national average.
The full amount of the required investment amount must be made available
to the commercial enterprise for the purpose of generating profit. Therefore
any capital that is used for any other purpose does not count toward the
requisite investment amount.
"At Risk" Investment
"Invest" is defined as the contribution of capital. This
definition does not include when the alien is acting solely as a creditor
in a debt arrangement. "Capital" includes cash, cash equivalents
that are easily convertible into cash, equipment, inventory, tangible
property, or debt secured by the alien's assets, for which he is personally
liable. Valuation is determined by fair market value in US dollars.
Job Creation Requirement
Only those persons authorized to
work in the US can be considered employees for the purposes of this requirement.
"Troubled Businesses"
A "troubled business" is defined as a business which has lost
20% of its assets.
Investors in troubled businesses do not have to create ten new jobs, but
rather must show that the number of existing employees will be maintained.
Full-Time Employment
The INS requires that whatever be considered by the organization to be
full-time employment for that specific occupation is considered full-time
for immigration purposes. Two part-time employees may be counted as one
full-time employee.
Investor Must be Actively Involved
The rules require that the investor either be involved in the day-to-day-
management of the enterprise, or that they are policymakers with regard
to their investment. The investor may meet this requirement by showing
that he is a corporate officer or director. The investor cannot play a
passive role in his investment. Limited partners are considered sufficiently
involved to qualify as a fifth preference investor, if the limited partnership
confers the usual rights and obligations to the limited partner alien
investor.
Supporting Documentation
For "New Commercial Enterprises"
1) Articles of incorporation, partnership agreements, and any other organizational
documents
2) Proof of the enterprise being able to do business in the state or municipality
3) Evidence that after November 29, 1990, 1 million dollars (or $500,000
in high unemployment areas) has been transferred to the enterprise and
that the investment has caused an increase in the net worth or number
of employees
4) Evidence of all property transferred from abroad
5) Tax returns of any kind filed within 5 years, foreign business registration
records, evidence showing sources of capital
6) Copies of employee records for the ten new employees, including tax
information or similar documents
7) Copy of the business plan showing the need for no fewer than ten new
employees, including the dates they will be hired (approximation) in the
next two years
8) Proof that the investor will be taking an active role in the enterprise,
through a description of their duties, evidence that the investor is a
corporate officer or director or proof that the investor is involved in
policy making or management (including evidence of limited partnership
if applicable)
9) Evidence that the enterprise is located in a high unemployment area,
if applicable
Application Process
The alien investor may file the Form I-526 (Immigrant Petition by
Alien Entrepreneur) (dated 12/02/91) on his own behalf with the
INS. Since the final regulations have been issued, these petitions
will now be reviewed and decided. The fee for the investor petition
is $350, due to the complexity of the review of these applications.
Conditional Grant of LPR
The investor is granted conditional permanent residence for two
years, and can petition for removal of the condition at the end
of that period by showing compliance with the statutory conditions.
The alien investor must write a petition to the INS ninety days
before the end of the two year conditional residence in order to
ask that the conditions on the alien's residence be removed, and
showing that the conditions of the residency have been met. The
alien investor does not need to be present in the US at the time
of the filing, but may be required to return for an interview if
one is scheduled.
If the petition is not submitted, the alien begins unlawful presence
the date of the expiration of the conditional residence. The alien
is then subject to the three to ten year rule of inadmissibility
to the US from their date of departure.
Petition to Remove Conditional Residency
The alien must submit the INS Form I-829 (Petition by Entrepreneur
to Remove the Conditions), a copy of the alien registration receipt
card (Form I-551) for themselves and their family, supporting documentation
and the filing fee of $345.
Supporting Documentation:
The petition must be accompanied by proof that the enterprise was
established by the alien, that the requisite amount of capital was
being invested in that enterprise, that the enterprise was sustained
throughout the entire period of conditional residency, that ten
full-time jobs have been or will be created in a reasonable amount
of time, or that if the alien invested in a troubled business, the
number of pre-investment employees remained constant over the entire
period of conditional residency. A copy of the original I-526 is
also helpful in the submission of the I-829.
Termination of Status If
the INS determines within the first two years that certain conditions
exist, the residence of the alien investor can be terminated. If this
occurs, the investor will be placed in deportation proceedings.
The INS will terminate residency if the INS determines that the commercial
enterprise was established for the purposes of evading immigration laws,
that the enterprise was never established, that the alien is not in the
process of investing the required capital, that the alien was not sustaining
the enterprise, or that the investor obtained the capital used for investment
through illegal means.
Generally, this occurs when the alien files the petition to remove conditions,
unless the INS receives information from law enforcement agencies. The
INS may also terminate residency if the alien investor fails to file the
petition to remove conditions on the residency. The filing period begins
ninety days prior to the two year anniversary of the grant of residency.
If the petition is filed late, it may still be accepted, so long as an
explanation is included as to the good cause of the lateness.
If the INS decides to terminate the conditional residence of the alien,
the alien begins unlawful presence when the INS formally terminates the
status of the alien.
Labor Certification Requirement
The investor category is not subject to the labor certification requirement.
Immigrant Investor Pilot Program
Congress created this program in order to increase the interest in the
investor category. The pilot program relaxes the requirement of the creation
of employment by allowing reasonable methods of determining the number
of jobs created, including those created indirectly. The pilot program
is to continue until September 30, 2000. The alien investor must also
establish some connection to the production of exports.
The program requires that participants "will promote economic growth
through increased export sales, improved regional productivity, job creation,
and increased domestic capital investment." The investor must still
meet all the criteria of employment creation investors, except he can
demonstrate that the investment will create jobs indirectly through the
revenue generated by increased exports.
The investor invests with a regional center in order to meet the job creation
requirement. The INS has approved the following regional centers:
* World Trade Center/Greenvill-Spartenburg, Inc., Greer, South Carolina
* Beacon US Studios, Inc., Blaine, Washington
* City of New Orleans Mayor's Economic Development Department, New Orleans,
Louisiana
* North Country Alliance, Rouses Point, New York
* Aero-Space Port International Group, Tukwila, Washington
* North Texas Commission, DFW Airport, Texas
* Legacy Project, Atlanta, Georgia
* Atlanta International Center for Academic and Athletics, Roswell, Georgia
* The Gateway Freedom Fund, Seattle, Washington
* West Rand Gold Trust, Ridgecrest, California
* Miami Chinese Community Center, Miami, Florida
* CKS Western, Inc., Lake Elsinore, California
* Abacus Advisors, Inc., Weston, Massachusetts
* American Export Partners, Charleston, South Carolina
* Danou Enterprises, Trenton, Michigan
* Pueblo Economic Development Corporation, Pueblo, Colorado
* GV Development, Golden Valley, Arizona
* Unibex Global Corporation, Las Vegas, Nevada
* State of Hawaii, Department of Business, Economic Development and Tourism,
Honolulu, Hawaii
* Empirical Entertainment, Hollywood, California
* State of Vermont, Agency of Commerce and Community Development
* Trading Partners International of California LLC, Santa Ana, California
* CMB Export LLC, Corona, California
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