Questions and Answers: EB-5 Basic or Direct Petitions

Question: Are the following statements correct with respect to EB-5 Basic or Direct Petitions?

Investors may pool their funds and jointly invest with other EB-5 investors (as with RC petitions), so long as they are “actively involved” e.g., shareholders of a business in which they have voting rights as to management and policy

Response: 8 CFR 204.6(g) specifically allows immigrant investors to pool their investments with others seeking EB-5 status. Each investor must invest the statutorily required amount ($900,000 or $1.8 million) and the jobs created by the new commercial enterprise will be allocated among those within the pool seeking lawful permanent residence status.

8 CFR 204.6(j)(5) requires an investor to be “engaged in the management of the new commercial enterprise, either through the exercise of day-to-day managerial control or through policy formulation, as opposed to maintaining a purely passive role in regard to the investment…”

Investors may diversify their funds into one or more businesses either directly or through an investment company.

Response: The original EB-5 program did not allow for indirect investment through an investment company that relies on the crediting of jobs in businesses that are not wholly owned by the new commercial enterprise. This is due to the fact that job creation can only be credited through the creation or preservation of jobs that are directly within the commercial enterprise in which the EB-5 Investor made his or her investment. Any such diversification of EB-5 investments must occur within the new commercial enterprise but the structure of the new commercial enterprise may consist of a holding company and its wholly-owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business. See 8 CFR 204.6(e) and 8 CFR 204.6(j)(4).

Investors may invest in Targeted Employment Areas.

Response: Yes. INA section 203(b)(5)(B) allows for investment within designated Targeted Employment Areas.

Petitions are adjudicated based on the order they are submitted; i.e., RC petitions submitted after EB-5 Basic petitions (I-526s) have been filed are not put ahead of them.

Response: Basic I-526 petitions have a processing workflow that is separate from regional center-associated I-526 petitions. However, the target processing time for each workflow is currently the same.

Taken from USCIS Quarterly EB-5 Stakeholders Meeting on June 30, 2011