Aginsky Capital | FAQs (EB-5)

FAQs (EB-5)



What constitutes as a qualified employee?

A qualified employee is a U.S. citizen, permanent resident or other immigrant authorized to work in the United States. The individual may be a conditional resident, an asylee, a refugee, or a person residing in the United States under suspension of deportation. This definition does not include the immigrant investor; his or her spouse, sons, or daughters; or any foreign national in any nonimmigrant status (such as an H-1B visa holder) or who is not authorized to work in the United States.

What is considered ‘full-time employment?

Full-time employment means employment of a qualifying employee by the new commercial enterprise in a position that requires a minimum of 35 working hours per week. In the case of the Immigrant Investor Pilot Program, “full-time employment” also means employment of a qualifying employee in a position that has been created indirectly from investments associated with the Pilot Program.

What is a job-sharing arrangement?

A job-sharing arrangement whereby two or more qualifying employees share a full-time position will count as full-time employment provided the hourly requirement per week is met. This definition does not include combinations of part-time positions or full-time equivalents even if, when combined, the positions meet the hourly requirement per week. The position must be permanent, full-time and constant. The two qualified employees sharing the job must be permanent and share the associated benefits normally related to any permanent, full-time position, including payment of both workman’s compensation and unemployment premiums for the position by the employer.

What are the pros and cons of investing in Direct Investment Vs. Regional Center?

Metrics Direct Investment Regional Center
Business Control 100% control No control
Number of Options Virtually unlimited Very limited
Involvement Level Passive/Active/Hybrid (options) Passive only(no options)
Transparency Full Limited
Liquidity Liquid Illiquid
Tangible Asset Free and clear ownership of business Minority shareholder
Business Expansion Optional Not an option
Returns 12% to 30% 0% to 1.5%
Risk Low High

What is a Targeted Employment Area (TEA)?

A targeted employment area is an area that, at the time of investment, is a rural area or an area experiencing unemployment of at least 150 percent of the national average rate.

What constitutes rural Areas?

A rural area is any area outside a metropolitan statistical area (as designated by the Office of Management and Budget) or outside the boundary of any city or town having a population of 20,000 or more according to the decennial census.

How does one define Direct Jobs?

Direct jobs are actual identifiable jobs for qualified employees located within the commercial enterprise into which the EB-5 investor has directly invested his or her capital.

How does one define Indirect Jobs?

Indirect jobs are those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor. A foreign investor may only use the indirect job calculation if affiliated with a regional center.

How do I determine if my source of funds is satisfactory?

ACG and its team of accountants and lawyers will review the source of funds and determine if the documentation is satisfactory. ACG will not file the application if the source of funds is not satisfactory.

When do I get my conditional green card?

Conditional green card is granted once the I-526 application is approved by the USCIS. USCIS takes approximately six months to process applications.

How soon thereafter do I get my permanent Green Card?

A permanent green card is issued by the USCIS once the I-829 application is approved. The applicant must demonstrate that the invested amount created the required number of jobs. The I-829 is filed two years after the I-526 is approved

When do I get my US passport?

The investor will be applicable to apply for a U.S. citizenship (if desired) three years after receiving his/her permanent Green Card. The applicant will also be required to fulfill his residency requirements of 3 consecutive years prior to the citizenship application to be eligible for the passport.

How long must I keep the business? When can it be sold or dissolved?

The business must be kept until the I-829 application is approved. Once the USCIS approves the I-829 application the business may be sold or dissolved. The investor also has the option of continuing the business if he/she desires.

Do I need to work in the business directly or can the day to day management be outsourced?

You do not need to work in the business directly and the day-to-day management can be outsourced to a third party management company. However, you will need to be involved in the business in a decision-making capacity (board level).

Can my wife and kids work in the business and if so, will those jobs also be counted towards the 10 requirement?

Your wife and kids can work in the business but their employment will not be accounted to fulfill the requirement of 10 jobs. The 10 new jobs have to be for American citizens.

Can I live in one state and have the business in another?

Absolutely yes, you can. For example, you can live in New York but invest into and/or own a business in Seattle.

Are there any limitations on the type of business or industry one can have?

No, there are no limitations on the type of business or one can invest in. However, the business needs to fulfill other USCIS criteria, which are as follows:
• It should be established after Nov. 29, 1990, OR
• Established on or before Nov. 29, 1990, that is:
1. Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or
2. Expanded through the investment so that a 40-percent increase in the net worth or number of employees occurs

Does it have to be a new business or can it be an existing business?

The investment can be made into a new business or an existing business.

Can I connect the business in the U.S. with my existing business in my home country?

Yes, the business in the U.S. can certainly be connected with your existing business in home country. For those investors who already have an existing business in their home country, an investment into the U.S. may also serve the purpose of creating a new subsidiary of their existing company and diversifying its risks geographically. Alternatively, the new U.S. entity could become the global headquarters while the business in the investor’s home country becomes the subsidiary. Doing so will increase the overall value of the business, including the existing business in the investor’s home country. Moreover, by creating such a global company, the investor is likely to have new access to cheaper U.S. capital for business expansion, new distribution channels, and partnership opportunities, as well as building on existing experience in a particular business field. However, note that only the Direct Investment route will be feasible for this purpose.

What happens to my application if the business fails or goes bankrupt?

If the business fails, you have an option to re-capitalize and incur business losses and maintain the required number of jobs until your I-829 application. This way, your green card is secured even if the business fails.

How do I make sure that the information provided by the Sellers of the business is correct and how do I know what I am actually buying?

The information provided by the sellers can be verified by hiring industry experts for a thorough due diligence. The due diligence will include verification of financials, legal and criminal background checks, discussions with customers, employees, and any other stakeholder. All of this will be documented and backed by legally binding contracts. Furthermore, a physical inspection of the asset prior to making any investment is strongly encouraged.

Does your firm provide any guarantees?

It is illegal to provide guarantees of any sort for EB-5. The law requires the investment to be ‘at risk’. However, we work with experts in EB-5 to ensure that the application will qualify prior to applying. As far as the business is concerned, we recommend businesses that have a long-standing track record and recurring revenues that are backed by customer contracts. This significantly minimizes the immigration as well as the business risk.

The investor should be wary of any guarantees provided by any intermediaries or firms.

How is ACG compensation structured for these services?

ACG charges a one-time fee at the time of the transaction and the client bears any third party expenses. If ACG is hired post acquisition for the management, we charge a management fee, which is tied to the profitability of the asset, effectively aligning our interest to yours.

What types of businesses do you recommend?

We recommend businesses, which have positive and recurring cash flows, a strong historical track record, and are easily scalable (in order to fulfill the job creation requirement). The businesses we recommend for EB-5 are labor-intensive as opposed to capital intensive.

Can I operate the business myself or do I need to hire your firm to run it?

It is up to you to decide the kind of involvement you want in your business. You have the option of running it or hiring us. Since operating a business in a new environment is always challenging, we recommend hiring a management firm at least initially until you get acclimated to the new business environment.

What kind of returns can I expect?

The kind of returns depends on the level of risk you are willing to take. Historically, our clients have earned of 10% to 30% in Direct EB-5 investments. With Regional Centers, you can expect anywhere from 0 to 2% annual returns.

Can I invest into or purchase multiple businesses to reduce my overall risk?

Yes, you may purchase multiple businesses to reduce your overall risk. The investments will have to be structured to demonstrate that one company is creating the required jobs. We can assist you with that.

Can the investment into a business be combined with an investment into real estate?

Yes investment into a business can be combined with an investment into real estate. As long as the investment is creating 10 new jobs, the investment will qualify for an EB-5 green card. Note that combining real estate with a business purchase will entail a higher capital outlay.

Will your firm work with me if I already have a business identified for acquisition?

Yes, we can provide each of our service on an individual basis or as a packaged end-to-end solution, if required. Click here to see our complete service suite.

Do you provide the immigration legal services? If so, do you do that in-house?

Our firm is a one stop shop for investments in the U.S. which includes immigration legal services as well. While we do not have an in-house attorney, we work with leading EB-5 lawyers to process your application. As far as you are concerned, we will be your only point of contact throughout the process. If you would like to work with your own attorney, we are certainly open to that as well.

If I have my own attorney, can I work with them?

Yes, you can work with your own attorney.

What are the immigration legal fees that I can expect to pay for the application to the USCIS?

The fee ranges anywhere from $16,000 to $25,000.

What if I already own a business in the U.S.? Can that qualify me for an EB-5 visa?

An already owned business may qualify for an EB-5 visa if the investor makes an investment of $500,000/$1,000,000 (depending on the area) and is able to create the required number of jobs.