Who Does Not Qualify for an EB-5 Visa?

Understanding Disqualification Criteria for the EB-5 Investor Visa

last updated Tuesday, August 13, 2024
#eb-5 program #EB-5 investor

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John Burson

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The EB-5 visa program, initiated by the United States Citizenship and Immigration Services (USCIS), is a gateway for foreign investors to obtain permanent residency in the United States by investing in U.S. enterprises. This program has attracted global attention due to its potential to secure a Green Card, leading to lawful permanent residence.

However, while the EB-5 program offers significant opportunities, it also has stringent requirements. Only some people who wish to participate will meet these criteria.

This blog post explores the common reasons that may disqualify a potential EB-5 investor, providing a comprehensive guide for those considering this pathway.

Considering an EB-5 investment? You can explore our comprehensive EB-5 Marketplace for the latest opportunities and subscribe for updates.

Understanding EB-5 Investment Criteria

The foundation of the EB-5 visa program lies in its investment requirements. To qualify, an investor must commit to one of two investment thresholds:

• $800,000 for investments in a Targeted Employment Area (TEA), which includes rural areas or regions with high unemployment.
• $1,050,000 for investments outside of a TEA.

However, merely having the financial means to invest does not automatically qualify an individual for the program. The USCIS imposes several additional criteria that can disqualify potential investors.

Exploring investment in a Targeted Employment Area (TEA)? You can learn more about the All Points North Project and why it qualifies as a TEA.

Insufficient Investment Funds

The amount and source of investment funds are critical factors in the EB-5 visa process. Here's how potential investors can fall short:

Source of Funds

One of the most critical aspects of the EB-5 application is proving that the funds used for investment were obtained through lawful means. This includes:

• Earnings from employment or business operations
• Inheritance
• Gifts (with clear documentation of the legality)
• Lawful business transactions

The USCIS requires extensive documentation to verify the legality of the funds. If an applicant cannot provide sufficient evidence to prove the legal sourcing of their investment funds, their application will likely be denied.

Amount of Investment

The investment amount must meet the required threshold—$800,000 or $1,050,000, depending on the location. Additionally, the investment must remain "at risk" for the duration of the investor’s conditional permanent residency. This means the funds cannot be guaranteed to be returned and must be subject to potential loss. If the investment is less than the required amount or is not truly at risk, the applicant will be disqualified.

Legal and Immigration History

An applicant’s legal and immigration history significantly affects their eligibility for the EB-5 program. Several factors in this domain can lead to disqualification:

Criminal Record

A past criminal record, especially involving crimes of moral turpitude (such as fraud, theft, or violence), can lead to the denial of an EB-5 application. The USCIS thoroughly reviews criminal histories, and even minor offenses can be cause for concern, depending on the circumstances.

Previous Immigration Violations

Any prior violations of U.S. immigration laws can disqualify an applicant. This includes:

• Overstaying a previous visa
• Illegal entry into the U.S.
• Misrepresentation of information on past visa applications

These violations indicate a disregard for U.S. immigration laws and can severely impact the chances of obtaining an EB-5 visa.

Financial and Tax Compliance

The financial history and tax compliance of an EB-5 applicant are scrutinized closely. Here’s how issues in these areas can lead to disqualification:

Tax History

Applicants must demonstrate full compliance with U.S. tax laws. A history of tax evasion, failure to file tax returns, or other tax-related issues in either the U.S. or their home country can pose significant problems. The USCIS views tax compliance as a critical factor in determining an applicant’s eligibility.

Bankruptcy

A recent bankruptcy, especially within the past several years, can raise red flags. While bankruptcy alone may not disqualify an applicant, it suggests financial instability and a potential inability to manage funds effectively. This could lead to concerns about the applicant's ability to sustain their investment, which is crucial for the EB-5 program.

Medical and Public Health Disqualifications

U.S. immigration law includes medical and public health criteria that all visa applicants, including those applying for the EB-5 visa, must meet:

Health Concerns

Certain infectious diseases or failure to meet vaccination requirements can lead to disqualification. The U.S. mandates specific health checks to ensure that applicants do not pose a public health risk. Please pass these medical examinations to avoid a denied visa application.

Public Charge

The U.S. immigration system aims to ensure that new immigrants will not become a "public charge," meaning someone who relies on government assistance. If an applicant is deemed likely to become dependent on public benefits, they may be disqualified from obtaining an EB-5 visa.

Employment and Operational Engagement

The EB-5 program requires that investors be actively involved in the business they are investing in. This is not merely a financial transaction; there are specific operational criteria that must be met:

Active Engagement

Investors must be engaged in managing the enterprise, either through direct day-to-day management or by participating in policy formation. The USCIS does not allow passive investment under the EB-5 program. If the investor cannot demonstrate active involvement, their application will likely be denied.

Navigating the EB-5 visa process is complex, and understanding the potential disqualifiers is crucial for a successful application. If you are considering this investment route, it is highly recommended to consult with an experienced immigration attorney who can provide personalized guidance. For more detailed information, you can also visit the USCIS official EB-5 page.

Discover how Rural EB-5 Projects might be the right choice for you.

Take Away

The EB-5 visa offers a viable pathway to U.S. residency for investors, but the process is surrounded by rigorous checks to ensure the integrity of the U.S. immigration system. Knowing the disqualifiers can help potential investors prepare a robust application. If you are considering applying for the EB-5 visa, please make sure that you meet all the necessary criteria and seek legal advice to guide your decisions.

Have questions or need personalized advice on your EB-5 application?  Contact Paperfree for a free evaluation.

 
 
 

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