INVESTOR VISAS INFO

Unlike family-based immigration, immigrant visas based on financial investment and the creation of employment is a relatively new concept. The Immigration Act of 1990 created a new class of investors eligible for lawful permanent residency. Only 10,000 visas are allowed per year under this category.

In general, employment-based investment visas for immigrants require a significant investment that creates local employment in the United States for at least 10 qualifying employees. The goal of such visas is to enlarge the economic base, and particularly, the job base of the United States. The minimum amount invested is $1 million, but this amount may be reduced to $500,000 for qualifying investments in rural America or "inner city" zones.

This category requires the investment of capital to be "at risk." The investor must be "at risk" of losing the investment if the business fails to be profitable. In addition, the investor must be actively involved in the management of the business. Such may be at a higher level, through policy formulation for the business enterprise. As a result of the alien's capital investment and management involvement, opportunities exist for lawful permanent residency. This visa also enables the potential creation of significant wealth through venture capital investment.

The Investment-based visa is particularly well-suited to high technology sectors, such as Internet and e-commerce companies. It is also useful for investments in lower technologies such as light manufacturing, services industries and those industries involving significant numbers of employees, as critical resources for commercial success.

Necessary Investment

The amount of capital necessary to make a qualifying investment in a commercial enterprise varies depending on where the commercial enterprise is located and the unemployment rate in the relevant geographic area. The amount of capital necessary to make a qualifying investment in most areas is one million U.S. dollars ($1,000,000). This includes metropolitan areas, which at the time of investment have an unemployment ratio significantly below the national average unemployment rates. These areas are called "high employment areas." The amount of capital necessary to make a qualifying investment in a rural area or an area that has experienced unemployment of at least 150% of the national average or above is only five hundred thousand U.S. dollars ($500,000). These areas are called "targeted employment areas." Targeted employment areas are designated by the state government of each state in the U.S.

"Capital" is defined by the INS as "cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien, provided the alien is personally and primarily liable". The assets of the commercial enterprise upon which the petition is based many not be used to secure any of the alien's indebtedness. All capital is computed at fair market value in U.S. dollars. Any assets acquired directly or indirectly by unlawful means (such as drug trafficking or other criminal activities) may not be used for the purposes of this application. "At Risk" Amounts. To constitute a "bona fide investment, the alien must not contribute his/her capital in exchange for a note, bond, convertible debt, obligation or any other debt arrangement between the alien and the new commercial enterprise."

Because of the need for significant capital in some business enterprises, INS regulations allow a group of alien investors to invest jointly in one single commercial enterprise. Each member of the investment group would qualify for the visa, provided that the ratios of investment and employment created is the same as for one individual alien making one individual investment.

Each petitioning investor must have individually invested, or must be in the process of investing, the required amount for the area in which the enterprise is principally doing business, and each individual investment must result in the creation of at least ten full-time positions for qualifying employees. Alternatively, the establishment of a commercial enterprise may be used as the basis of a petition for alien entrepreneur even though there are several owners of the enterprise, including persons who are not seeking classification, provided that all sources of capital invested are identified, and have been derived by lawful means. To prevent certain abuses the INS reversed its point of view after initially approving such visas.

What is Commerce and Enterprise?

A commercial enterprise is an entity which conducts business "for profit", in activities generally undertaken for the ongoing functioning of a lawful business. It may be a sole proprietorship, a partnership (limited or general), a holding company, a joint venture, a corporation, a business trust, or other entity, which may be publicly or privately owned. A commercial enterprise does not include within its definition, a noncommercial activity such as owning and operating a personal residence.

The establishment of a new enterprise includes the formation of an original business, the purchase of an existing business, a merger, acquisition or the expansion of a newly organized or existing business.

If the alien chooses to purchase an existing business, the business must be restructured and reorganized in a way that results in the creation of a new commercial enterprise. If the alien chooses to expand an existing business through investment and capitalization, a substantial change in the net worth of the business or the number of employees must result from such investment. A "substantial change" means at least a 40% increase in the new worth or the number of employees in the business. This does not exempt the alien from the requirements relating to the amount of capital investment and the creation of full-time employment for ten qualifying employees.

When an alien wishes to demonstrate business activity at a professional level (such as doctor, engineer, architect, accountant or lawyer), the applicant must submit documentation, such as licenses, diplomas, degrees, certificates, or membership in professional organizations.

Number of Qualifying Employees. For this visa category, the alien must invest in a commercial enterprise that will benefit the U.S. economy and create at least 10 full-time employment positions for lawful U.S. workers other than the alien and his or her spouse and children.

An "employee is defined by INS as an individual who provides services or labor for the commercial enterprise, and who receives wages or remuneration directly from the enterprise". A "qualifying employee is a U.S. citizen, a lawfully admitted permanent resident, or other immigrant lawfully authorized to be employed in the United States". They may include conditional residents, temporary residents, people seeking asylum, refugees or aliens remaining in the U.S. under suspension of deportation. It does not include the alien entrepreneur, his/her spouse, or children and relatives, or any nonimmigrant alien expressly forbidden to work in the U.S. or any independent contractor who is not an employee.

Hours of Work. The qualifying employee must be employed in a position that requires a minimum of thirty-five (35) hours per week. Job-sharing arrangements are acceptable whereby two or more qualifying employees share a full-time position of at least 35 hours per week. Part-time employees, and combinations of part-time positions even if, when combined, meet the hourly requirement per week, shall not be included as full-time employment. Such part-time arrangements fail to satisfy the employment creation element of the visa requirements.

Exception for Investment in a Troubled Business. An alien who makes an investment in a "troubled business" is exempted from the mandatory requirement of creating ten jobs. – "A troubled business" is one that has been in existence for at least two years continuously, and has incurred a net loss for accounting purposes during the twelve or twenty-four month period prior to the alien filing his/her petition. The financial loss to the business must be at least equal to 20% of the business' net worth prior to the loss. If an alien invests the required amount of capital in a "troubled business", the number of existing employees, whether greater or less than ten full-time employees, must "be maintained at no less than the pre-investment level for a period of at least two years."

The petition to obtain permanent resident status under this classification must be filed on Form I-526, "Immigrant Petition by Alien Entrepreneur". The petition must be signed by the alien or his/her authorized representative, and accompanied by the appropriate fee. The petition must be filed at the relevant INS Service Center having jurisdiction over the area in which the new commercial enterprise is, or will principally, be doing business.

Detailed and conclusive evidence must be submitted with the Form I-526, "Immigrant Petition by Alien Entrepreneur" to document that the alien has invested or is actively in the process of investing the required amount of lawfully obtained capital in a new commercial enterprise in the U.S. which will create at least ten full-time positions for qualifying employees.

To demonstrate that a new commercial enterprise has been established in the United States, the alien must submit:

1. Articles of Incorporation, Certificate of Merger or Consolidation, Partnership Agreement, Certificate of Limited Partnership, Joint Venture Agreement, Business Trust Agreement, or other similar organizational document for the new enterprise;
   
2. A certificate evidencing the qualification to do business in a state or municipality, or if the form of the business does not require any such certificate, or the state or municipality does not issue such a certificate, a statement to that effect, or
   
3. Evidence that, at any time after November 29, 1990, the required amount of capital for the area in which the enterprise is located has been transferred to an existing business, and that the investment has resulted in a substantial increase in the net worth or number of employees of the business to which the capital was transferred. This evidence must be in the form of stock purchase agreements, investment agreements, certified financial reports, payroll records, or any similar instruments, agreements, or documents evidencing the investment in the commercial enterprise and the resulting substantial change in the net worth or number of employees.

To illustrate that the petitioner has invested or is actively in the process of investing the required amount of capital, the petition must be accompanied by evidence that the petitioner has placed the required amount of capital "at risk" for the purpose of generating a return on such capital placed at risk. Evidence of mere intent to invest, or of prospective investment arrangements entailing no present commitment will not suffice to show that the petitioner is actively in the process of investing. The alien must show actual commitment of the required amount of capital. Such evidence may include but is not limited to:

1. Bank statement(s) showing the amount(s) deposited in U.S. business account(s) for the enterprise;
   
2. Evidence of assets which have been purchased for use in the U.S. enterprise including invoices, sales receipts, and purchase contracts containing sufficient information to identify such assets, their purchase cost, the date of purchase, and clearly identifying the purchasing entity;
   
3. Evidence of property transferred from abroad for use in the U.S. enterprise, including U.S. Customs Service commercial entry documents, bills of lading, and transit insurance policies containing ownership information and sufficient information to identify the property and to indicate the fair market value of such property;
   
4. Evidence of monies transferred or committed to be transferred to the new commercial enterprise in exchange for shares of stock (voting or non-voting, common or preferred). Such stock may not include terms requiring the new commercial enterprise to redeem it at the holder's request; or
   
5. Evidence of any loan or mortgage agreement, promissory note, security agreement, or other evidence of borrowing which is secured by assets of the petitioner, other than those of the new commercial enterprise, and for which the petitioner is personally and primarily liable.

To prove that the petitioner has invested or is actively in the process of investing capital obtained through lawful means, the petition must be accompanied, as applicable, by:

1. Foreign business registration records;
   
2. Corporate, partnership, or any other entity in any form which has filed in any country or subdivision thereof, personal tax returns including income, franchise, or property (whether real, personal, or intangible), or any other tax returns of any kind filed within five years, with any revenue jurisdiction in or outside the United States by or on behalf of the petitioner;
   
3. Evidence identifying any other sources of capital; or
   
4. Certified copies of any judgments or evidence of all pending governmental civil or criminal actions, governmental administrative proceedings, and any private civil actions (pending or otherwise) involving monetary judgments against the petitioner from any court in or outside the United States within the past fifteen years.

To authenticate that a new commercial enterprise will create no fewer than ten full-time positions for qualifying employees, the petition must be accompanied by:

1. Documentation consisting of photocopies of relevant tax records, Forms I-9, or other similar documents for ten qualifying employees, if such employees have already been hired following the establishment of the new commercial enterprise; or
   
2. A copy of a comprehensive business plan showing that, due to the nature and projected size of the new commercial enterprise, the need for not fewer than ten qualifying employees will result, including approximate dates within the next two years, and when such employees will be hired.

A new commercial enterprise which has been established through a capital investment in a "troubled business" meets the statutory employment creation requirement when the petition is accompanied by evidence that the number of existing employees is being, or will be, maintained at no less than the "pre-investment" level for a period of at least two years. Photocopies of tax records, Forms I-9, W-2s, or other relevant documents for the qualifying employees, and a comprehensive business plan must be submitted in support of the petition.

To illustrate that the petitioner is, or will be, engaged in the management of the new commercial enterprise, either through the exercise of regular managerial control, or through policy formulation, as opposed to maintaining a purely passive role in regard to the investment, the petition must be accompanied by:

1. A statement of the position title that the petitioner has or will have in the new enterprise, and a complete and thorough job description;
   
2. Evidence that the petitioner is a corporate officer or a member of the corporate board of directors; or
   
3. If the new enterprise is a partnership (limited or general), evidence that the petitioner is engaged in either direct management or policy-making activities.

If the petitioner is a limited partner, and the limited partnership agreement provides the petitioner with certain rights, powers, and duties normally granted to limited partners under the Uniform Limited Partnership Act, the petitioner will be considered sufficiently engaged in the management of the new commercial enterprise.

In order to demonstrate that the new commercial enterprise has created or will create employment in a targeted employment area, the petition must be accompanied by:

1. In rural areas, evidence that the new commercial enterprise is principally doing business within a civil jurisdiction not located within any standard metropolitan statistical area as designated by the Office of Management and the Budget, or within any city or town having a population of 20,000 or more as based on the most recent U.S. census;
   
2. In "high unemployment" areas:
   (i) Evidence that the metropolitan statistical area, the specific county within a metropolitan statistical area, or the county in which a city or town with a population of 20,000 or more is located, in which the new commercial enterprise is principally doing business has experienced an average unemployment rate of 150% of the national average; or
   (ii) A letter from an authorized agent/representative of the government of the state in which the new commercial enterprise is located which certifies that the geographic or political subdivision of the metropolitan statistical area, or of the city or town with a population of 20,000 or more in which the new commercial enterprise is doing business has been designated a "high unemployment" area.