Direct EB-5 Investment: Starting Your Own Business for a Green Card

The EB-5 Immigrant Investor Program offers a pathway to permanent residency (a Green Card) for foreign nationals who make significant capital investments in a new commercial enterprise in the United States that creates or preserves at least ten full-time jobs for qualifying U.S. workers. The Direct EB-5 route allows investors to manage their own venture, offering more control than the Regional Center Program.

Understanding the Direct EB-5 Pathway

Unlike Regional Center investments, where an investor is passive, the Direct EB-5 stream requires the investor to be actively involved in the management and operation of the new commercial enterprise (NCE).

Key Requirements for Direct Investment

To qualify under the Direct EB-5 category, an investor must meet specific financial and operational criteria:

• Capital Investment: The investor must commit and invest the required minimum capital amount.
• Job Creation: The investment must result in the creation or preservation of at least ten full-time jobs for qualifying U.S. workers within two years of the conditional residency grant.
• New Commercial Enterprise (NCE): The investment must be made in a business established after November 1990, or the capital must be used to expand an existing business, resulting in a substantial increase in net worth or number of employees.

Minimum Investment Thresholds

The required investment amount is determined by the location of the business:

1. Targeted Employment Area (TEA): The minimum investment is currently $800,000. A TEA includes either a rural area or an area that has experienced unemployment of at least 150% of the national average rate.
2. Non-TEA Area: The minimum investment is currently $1,050,000.

Active Management and Operational Control

The defining feature of the Direct EB-5 path is the requirement for active management. The investor must demonstrate that they are engaged in the day-to-day management or the formulation of business policy.

Active management can be satisfied through several roles, including:

• Serving as an officer or director, and actively managing the enterprise;
• Being employed by the enterprise in a managerial capacity; or
• Being actively involved in the day-to-day operations, provided the enterprise is structured as a partnership in which the investor has a general partnership interest or is otherwise similarly situated to a general partner.

Simply being a silent partner or holding a minority share without operational input will generally fail to meet the USCIS requirements for active management.

The Process: From I-526E to Green Card

The journey involves several critical steps, beginning with the filing of Form I-526E (Immigrant Petition by Alien Investor):

The investor must provide comprehensive documentation proving the lawful source of funds, the commitment of capital, and a viable business plan demonstrating how the ten jobs will be created.

Once the I-526E is approved, the investor proceeds to consular processing or adjustment of status to receive two years of conditional permanent residency. The final step involves filing Form I-829 (Petition by Alien Entrepreneur) to remove the conditions after two years, requiring proof that the required capital has remained invested and the ten jobs have been sustained.

The success of a Direct EB-5 application heavily relies on the viability and execution of the business plan. Unlike Regional Center investments, where job creation is projected based on economic models, Direct EB-5 requires verifiable, actual employment.

Conclusion

The Direct EB-5 investment route offers the control sought by entrepreneurs wishing to establish their own U.S. business while pursuing permanent residency. However, it demands a significantly higher level of operational commitment and business acumen than passive investment options. Success hinges on meticulous planning, full compliance with capital deployment rules, and demonstrable, ongoing active management of the new commercial enterprise.