Jian Joe Zhou, Attorney at Law

Often, people confuse the EB-1C multinational transferee immigrant visa with the EB-5 entrepreneur immigrant visas, and collectively call them investment visas. Yes, in some aspects, EB-1(c) and EB-5 share similar features: both deal with foreign capital and investment and often involve the creation of a new business entity in the U.S. However, EB-1(c) and EB-5 are drastically different categories and inappropriate application may result in strategic disaster or practical failure of immigration petitions.
EB-1(c) category allows international companies to transfer overseas high level managers or executives to their U.S. entities to take a permanent high level manger or executive position. The EB-5 category is for alien individuals who have invested or are in the process of investing capital into a new commercial enterprise in the U.S. The purpose of the EB-1(c) visa is to allow companies to cross-fertilize and translate business practices and ideas, while the goal of the EB-5 category is to stimulate investment and enhance job creation in the U.S.

The nature of the EB-1(c) and EB-5 visas differ in that that EB-1(c) is designed for transfer between companies and the EB-5 is for individuals to come to the US to invest. This makes the qualifications and requirements in terms of funding source and business design, employee position and role, and individual qualifications.

1. Business Structure

The EB-1(c) category requires a qualified multinational relationship between the U.S. and foreign business entities. This relationship involves a company investment from one entity to another, and examples of qualifying relationships include parent companies, satellites, and affiliates. It is used for transfer of executives between the related companies. In EB-1(c), the US entity is the petitioner, and the transferee alien is the beneficiary. The US entity must have been substantially operating for at least one year before it can file an EB-1(c) petition. A temporary L-1A visa may be available for transferee aliens before the immigration EB-1(c) is filed.

EB-5 category is designed for an individual alien to invest into a new business in the U.S. The individual does not need to be associated with any corporation overseas. The U.S. investment may be in a variety of different forms. For this type of case, the individual investor is the petitioner and beneficiary.

2. Funding source and Investment Amount

For EB-1(c) cases, the USICS usually looks into the initial investment between the overseas company and the related U.S. company. If the U.S. entity is a relatively new investment of the overseas parent company, the USCIS often requires evidence of a money transfer from the overseas company into the US entity. There is no set minimum for this investment, but the investment amount must be reasonable to cover the costs of the new office. In practice, we have seen initial investments into the U.S. subsidiary of around $100,000;these EB-1(c) cases were later approved after the U.S. entity operated substantially.

EB-5 is stricter:the petitioning individual’s investment must be at least $500,000 in a new commercial enterprise in the U.S. In some cases, a $1 million investment is required. In addition, the petitioning individual must prove through solid documentary evidence that the money used for the investment was his or her own money derived from a legitimate source.

3. USCIS Review Emphasis

In EB-1(c) cases, the USCIS emphasizes the establishment of a corporate structure and the business operation of the petitioning U.S. entity. The key to success in EB-1(c) cases is to prove that the petitioning U.S. entity has established a corporation structure that will allow the transferee alien to act in a high level managerial or executive function, not just on daily operations or first line worker supervision. Therefore, in general, 5-7 full time employees are required to establish the corporate structure necessary to satisfy the requirement. In addition, the U.S. entity must have substantial business operations with commensurate revenues.

For EB-5 cases, the USCIS focuses on the real transfer of the money, the legitimacy of the source of the assets, and whether the investment created at least ten full-time employment opportunities for U.S. workers. If the investment is in a USCIS approved “Regional Center,” indirect employment opportunities created by the investment influence may fulfill the job creation requirements.

4. Immigrant Alien’s Position and Role

For the EB-1(c) category, the position offered to the transferee must have managerial or executive duties. The position must be at a level that involves policy making, major decision making and/or management of other lower managerial subordinates. These duties are generally considered alongside the corporate structure of the U.S. entity.

The EB-5 category does not require an employment offer or a sponsoring employer. If the investor is applying under the Regional Center Program, the investor does not need to be involved in the day-to-day management of the investment or the running of the business, nor does the investor need to live in the place of investment.

5. Individual Qualification

A managerial or executive transferee in the EB-1(c) category must have worked in a managerial or executive level position for the related overseas company continually for at least one year out of the last three years prior to the filing of the petition. There is no minimum educational or experience requirement but the transferee must be reasonably qualified to hold the offered position.

The EB-5 has no educational or experiential requirements. There is no investment experience or specific technical skill required.

Conclusion to Part I

In summary, EB-1(c) is best suited for those who are in high level managerial or executive positions in overseas company that already had U.S. business exposure and are familiar with U.S. business operations. For individuals with limited business experience or no position within a multinational company but with financial resources, the EB-5 category might be a better way. EB-5 may also be a good option for those who do not want to work under a corporate structure or who do not have the corporate authority to transfer.

In the past, the EB-1(c) category has been frequently utilized by businesses of all sizes and organizational structures. Each year, thousands of aliens enter the U.S. with EB-1(c) immigrant visas. However, up until 2006, the EB-5 category was used by less than 600 individuals per year (there are total 10,000 available annual quota). The major issue for EB-5 cases was provingthe legitimacy of the source of income. Yet, as the Asian, Eastern Europe, and Latin America economy expands, the number of qualified individuals for EB-5 is growing.
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[To be continued with Part II, comparison of EB-1(c) and EB-5 in procedural aspects]

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*Attorney Jian Joe Zhou is the Co-managing attorney at Zhang & Associates, PC (www.hooyou.com). Joe has more than 8 years of experience in employment/business immigration and international law practice. Joe received his SJD, LLM, and MLI degrees from the University of Wisconsin Law School, and his LLB from East China University of Politics & Law. He may be reached at @hooyou.com">jzhou@hooyou.com.