The Other EB Visa for Foreign Investors? EB-1(c) Visas as an Alternative to the EB-5 Visa

Overview

I have written a few articles regarding the over-promotion of the EB-5 visa program from the standpoint that frequently the foreign investor’s desire for a Green Card is over-zealous before considering all of the tax consequences of permanent residency and U.S. citizenship.

The EB-5 Visa program has been widely promoted as a legal basis for foreign business owners to gain conditional residency followed by permanent residency in the United States. The program is a great solution to the proposition “Ï want to live in America.”

In many cases for a variety of political and economic reasons, the foreign investor’s decision to become a U.S. resident is immutable. Personally, if I were a wealthy Chinese investor or business owner, this is the mindset that I would have today. For foreign investors that fall into that category, the question might be how quickly I can get to the United States and how inexpensively?

The EB-5 program sunsets every three years. Senators Grassly and Leahy introduced a bill to extend the sunset date of the EB-5 Investor Program from September 20, 2015 until September 30, 2015. The new proposal makes three significant modifications to the program. First, the minimum investment is increased to $1.2 million for non-targeted employment areas and the minimum investment for regional EB-5 program for targeted employment is increased to $800,000 from its current level of $500,000. The wait for Chinese investors who account for almost 85 percent of EB-5 visas is almost two years.

Experienced immigration professionals in EB-5 will tell you that the investment by the foreign investor is typically much more than $1 million. For some foreign investors the problem is the lack of control over the underlying investment, and for others the uncertainty of the investment return.

What would you say if I told you that there was another type of visa for this caliber of foreign investor (Richie Rich aka Ricardo Rico) that did not have a minimum level of investment; has a much larger quota share than EB-5; no time delay and no employer certification but an immediate Green Card for the foreign investor and family members?

This article summarizes the benefits and potential of the EB-1(c) visa as an alternative to the EB-5 visa for wealthy and accomplished multi-national managers and executives.

EB-1(c) Visa Overview

The EB-1 category has a generous quota of worldwide visas – 28.6 percent. The EB-1 category has three different categories- persons of extraordinary ability (EB-1(a); outstanding professors and researchers (EB-1(b) and multinational executives and managers (EB-1(c). Generally, the EB-1 applicant must demonstrate extraordinary ability in sciences, arts, education, business or athletics. This ability has to have been demonstrated through sustained national or international acclaim with achievement recognized in the file through exclusive documentation. The EB-1 applicant seeks entry into the United States to continue work in the area of extraordinary ability.

Unlike other employment based visas, the EB-1 visa applicant does not require a specific offer of employment, but must intend to work in the U.S. in the foreign investor’s area of expertise. The position does not require labor certification with the Department of Labor. An approved EB-1 visa petition remains valid even if the visa beneficiary does not work for the initial employer as long as the EB-1 visa holder demonstrates plans to continue his work in the area of expertise. The legislative history of EB-1 legislative history states that this category is intended “for the small percentage of individuals who have risen to the very top of their field of endeavor.”

In the EB-1(c) category, the U.S. Company offering the position to the EB-1 applicant must be “doing business” in U.S. for at least one year. The U.S. company must make a job offer to the foreign executive or manager, and does not require labor certification. The EB-1(c) applicant must employed abroad for one year (in last 3 years) by “firm or corporation or other legal entity or an affiliate or subsidiary thereof.” The business applicant must be able to demonstrate business-related contributions of major significance, and a high salary or remuneration in relation to others in the field.

As a practical matter most of the foreign investors that have several million dollars to invest in a U.S. business should be able to demonstrate significant business contributions in their home country and industry as well as a high salary in relation to others in the field. Said plainly, if a foreign investor was able to invest one million dollars in a new U.S. business which is frequently a “throw away” investment for the foreign investor, the foreign investor must have done a few things correctly in the home country and is most likely has national level recognition and a considerable reputation .  The standard of proof for extraordinary ability, outstanding professors and researchers, and exceptional ability is the preponderance of the evidence standard.

The “one of three year requirement” may be met even if the person is in the U.S. for more than 3 years if he or she is working for the same employer, affiliate, or subsidiary in the U.S. and was employed for at least one of the last three years by the company abroad before entering in non immigrant status.  The petitioner must establish: (i) it maintains a qualifying relationship (parent, affiliate, and subsidiary) with the beneficiary’s foreign employer; and (ii) the foreign corporation or other legal entity that employed the beneficiary will continue to exist and have a qualifying relationship with the petitioner at the time the immigrant petition is filed

Managerial capacity means an assignment in an organization in which the employee primarily directs the management of the organization or a component or function; establishes goals and policies; exercises wide latitude in discretionary decision making; and receives only general supervision or direction from higher level executives, board of directors or stockholders

Executive capacity means an assignment in an organization in which the employee primarily directs the management of the organization or a component or function; establishes goals and policies; exercises wide latitude in discretionary decision making; and receives only general supervision or direction from higher level executives, board of directors or stockholders.

The foreign investor’s company must be operating abroad. If the foreign entity stops operating prior to visa appointment the person is ineligible for Eb-1 status. The foreign investor must demonstrate that company is not merely a shelf corporation but is active, conducting substantial business, and truly needs an executive or manager

Example

Facts

Joao Velasco is a resident of Sao Paolo. He is married and has three children. He operates a tile manufacturer in Sao Paolo. The company is sizeable and has 1,000 employees in Brazil and another 500 employees in Mexico. It is one of the largest tile manufacturers in Brazil. Joao has been the President of the industry association in Brazil and internationally. He would like to obtain a Green Card because he is convinced that the combination of personal safety, political and economic stability are irrevocably changed in his mind about living and raising

He would like to create a new U.S. subsidiary and transfer himself to manage the U.S. operation. He plans to bring his wife and family. He would like to set up the company in Florida and live in South Florida due to the similarity in weather and growing Brazilian community.

Solution

Joao creates a new Florida corporation as a subsidiary of his Brazilian corporation based in Fort Lauderdale. After a year of operation, Joao applies for an EB-1(c) visa. His immigration attorney compiles an extensive dossier of recommendations and list of business accomplishments for Joao and his company. The Eb-1 visa is approved.

His children will attend private school in Broward county. The Florida corporation forms three new LLCs. One LLC will serve as a new business venture to import and distribute Brazilian tile nationally. The second LLC will purchase several existing Dunkin Doughnut operation in South Florida with a license to add new restaurants in the area. The existing operation has fifteen employees and net profits of $500,000. Joao will operate his office out of warehouse space in the Dania area on a lease. He hires five people immediately to help with the new tile business in the United States. A third LLC will develop commercial real estate on Miami Beach to cater to the Brazilians moving to the United States.

Joao will travel back and forth to Brazil while his family remains in the United States. The EB-1 visa application can be made on an expedited basis with an initial decision in fifteen days and additional fifteen days in the event of a request for evidence by USCIS. The approximate filings fees including the expedited request is $1,250. Attorney’s fees are in the $5,000 range. The process from the time of submission to completion is one month instead of thirteen-fourteen months. The EB-1 visa application is made after the one year anniversary of the U.S. subsidiary.

Joao retains control over the management of the companies and makes additional investment within the company based upon the needs of the business.

Summary

The EB-1(c) visa gets no air time unlike its cousin the EB-5 visa. Like all EB-1 visas, it is hard to obtain approval but I maintain that the same person that has several million dollars to throw at an EB-5 most likely meets the qualification requirements of an EB-1 visa if the case is properly prepared and presented to USCIS. The benefits are substantial. The EB-1 visa provides for an immediate Green Card without a two year conditional period that is tied to job creation. Secondly, the EB-1(c) does not have a specific minimum investment requirement. Third, the foreign executive has the ability to manage and control the underlying company.

As the current EB-5 visa program prepares for renewal most likely with higher investment requirements and tighter requirements, other options need to be explored. The EB-1(c) visa offers strong potential for the same business profile that currently meet the EB-5 visa profile. My view is that the EB-1(c) is a visa option that should begin to attract the same amount of air time as its cousin, the EB-5 visa.

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