Register your INTEREST in the EB-5 INVESTMENT VISA
For more information on the the VISA LOTTERY click here
FREQUENTLY ASKED QUESTIONS
Q: Is an EB-5 related investment truly passive?
The EB-5 regulations require involvement in management or policy making. The regulations deem a limited partner in a limited partnership that conforms to the Uniform Limited Partnership Act as sufficiently engaged in the EB-5 enterprise. However, the Uniform Limited Partnership, adopted by most states, prohibits the limited partner from actively participating in management.
On one hand you must be involved in management or policy making, while on the other hand you can’t. This contradiction is resolved by granting the limited partners the right, as a group, to oust the general partner for “cause” and to suggest or recommend issues of overall policy. American Life’s limited partnerships comply with the Uniform Limited Partnership Act.
Q: How is the investment structured?
Each Limited Partnership owns one building. Your investment purchases an interest in a Limited Partnership and you become a Limited Partner. Your share of the Limited Partnership will be proportionate to the percentage your investment bares to the value of the project. The prospectus for each project (building) details the valuation.
American Life Inc. is the General Partner of the Limited Partnership. The General Partner manages renovation, an essential element in qualifying for the EB-5 visa, leasing to tenants and day to day management.
Each month investors receive a rental distribution equal to seventy per cent (70%) of your pro rata share of the total distribution for Limited Partners. When the building is sold you will receive the proceeds, made up of your initial capital plus seventy per cent (70%) of your pro rata share of the capital appreciation.
Q: What is a limited partnership?
A limited partnership combines corporate limited liability with partnership taxation. The limited partnership, formed by filing a charter with a state government, consists of a general partner and one or more limited partners. The charter details the rights and powers of the limited and general partners, percentages of ownership, and distributions of profits. The general partner manages the business. As in a corporation, the limited partners are passive investors liable only for the value of their investment. As in a general partnership, limited partnership income is taxed at the partner level, not at the entity level.
American Life Inc. could use a limited partnership or limited liability company with equal effect. American Life uses a limited partnership because the USCIS regulations specifically refer to limited partners, exempting them from the requirement to actively participate in the business. The regulations make no mention of limited liability companies.
Q: How is my limited partner interest protected?
The Certificate of Limited Partnership must be recorded with the State of Washington as a public record. The Certificate refers to a Schedule A of the limited partnership agreement, which lists the names and percentage interests of the limited partners. The deed for the investment property is held in the name of the limited partnership. The deed is also of public record. This means the property cannot be sold, mortgaged or altered without complying with the terms of the limited partnership agreement.
Q: Is my investment guaranteed?
No. The law requires an “at risk” investment without guarantees or redemption rights.
Q: What are my risks?
As in any investment there is a risk of loss. We invest in real estate without mortgage or bank financing. This lack of debt eliminates much of the risk. Like everybody we risk the deleterious effects of acts of god, war, and market fluctuations in rental income or real estate prices. We urge all investors to visit us, check our references and to independently verify the information contained in our prospectus.
Q: Why should I pay a deposit?
Some visa applicants may wish to secure a place in a specific building while deferring their investment of US$525,000. A 90 day deferment may be secured with a deposit of US$50,000, payable to American Life, Inc.
Please note that deposits will be credited to the Limited Partnership when the balance of the investment of US$475,000 is made into the Limited Partnership. However, a deposit is non-refundable if the balance of the investment is not made within the agreed period of 90 days.
Q: Why must I invest before applying for my green card?
The regulations permit escrow arrangements but we have found that USCIS looks more favorably on petitions based on a completed investment.
In addition, because we offer our properties to US citizens as well as immigrant investors, it is appropriate to do so on a first-come first-served basis, with a reserve option of up to 90 days. If your investment capital sits in escrow or trust pending the results of a visa application, the target investment which formed the basis of your visa petition may have been sold out to other investors. You would be in the unfortunate position of basing your green card application on an investment that was no longer available, thereby jeopardising your visa application.
Our primary business is real estate development. Most of our capital comes from investors who do not seek an immigration benefit. They invest on financial considerations only, without preconditions, whereas EB-5 investors have two considerations, the soundness of the investment and obtaining their green card.
The investment must be analyzed upon its merits. If you believe we offer a sound investment then we require that you commit your capital as any other investor. If for some reason you do not receive your green card, our contract with you requires us to refund your investment. We maintain credit lines with several banks for this purpose. We also have a constant stream of new investors, providing an alternative source of funds to refund your investment.
Q: How does the partnership distribute income?
Rental profits are distributed to investors on a monthly basis. The distributions are based on the prior month’s gross rental income net of expenses and investors receive a profit and loss statement with each distribution. At the end of the year the partnership issues a summary report along with Internal Revenue Service form K-1. Form K-1 details your yearly income and expenses. Your accountant will require form K-1 to prepare your US annual tax return.
Q: I understand that EB-5 has been the subject of litigation. Will this history effect my green card applications?
The EB-5 visa category started in 1990. Regional Center investments were started in 1993. American Life Inc. formed its Regional Center in 1996 and raised capital from some 40 investors between 1996 and 1998. Several companies competed for investment capital during this period. Most of the companies didn’t offer sound investments and were really in business to collect fees rather than to fund an ongoing business. Many investment opportunities did not even raise the full $500,000 investment capital or hire the required number of employees.
The CIS rightly wanted to stop these abuses of the program. In 1998, it revised its rules and applied them retroactively, attempting to revoke visa petitions that had already been approved. This started litigation. In 2002, Congress passed a new law to protect the pre-1998 investors. Also, in 2002, in a case commonly known as “Chang” the 9th Circuit Court of Appeal” ruled that the CIS may not apply their new rules retroactively.
In the light of the revised legislation the CIS is now supportive of the program and in March 2005 established a visa processing department dedicated to the EB-5 program. We believe that EB-5 immigration petitions based on sound investments as prescribed by the rules and with proper supporting documentation, will continue to be approved.
Q: What documents must I prepare to process my visa petition?
You must prepare complete biographical information for each applicant and the principal applicant must prove the source of the investment funds. To prove the source of investment funds, USCIS requires five years of tax returns, five years of bank records, proof of ownership in any businesses, financial statements for each business and business licenses. The idea is to present a track record of an honest course of dealing. If your capital came from a specific transaction, such as sale of a house, inheritance or gift, you must prove the transaction occurred by providing an official document, such as a closing statement or contract. Other documents may be required and vary on a case-by-case basis.
Q: Where can I find a copy of the relevant law and regulations to study?
Please go to the USCIS web site. CLICK HERE for a direct link to investment visa information
Q: How long will the whole process take?
Processing times vary so we cannot accurately predict or promise a particular processing time, but the table below outlines the procedures and probable timescale:
• Processing at the California Processing Center - 3 Months
• Processing at the National Visa Center - 4 months
• Awaiting the consulate interview - 2 months
• Issuance of conditional Green Card - 9 months
• Application for ‘removal of conditions’ & Permanent Green Card
21 months
• Removal of conditions - 3 months
• Total 33 months
Q: What are the processing procedures?
A general outline of the application process follows. Your attorney will be able to give you a more complete description.
Step 1)File form I-526 Petition for Alien Entrepreneur with the California Service Center. This petition requests the CIS to certify the applicant and the investment as eligible for EB-5 visa status.
Step 2) Upon approval of the I-526 petition, (a) if you are in the United States you may apply for Adjustment of Status to Permanent Residence by sending form I-485 and supporting documents to the CIS regional processing center nearest your US residence. (b) If you are outside the US you must wait for notification from the Embassy in your home country to prepare documents for the visa interview.
The purpose of the Adjustment of Status or consular visa interview is to ensure you are not subject to grounds of exclusion such as a criminal past or infectious diseases.
Step 3) upon approval you receive a form evidencing the approval as well as a travel document. You will also receive the temporary green card in the mail. If you are outside the US you must enter the country within six months of the date of the Embassy approval.
Step 4) After one year and nine months, you may file for removal of conditions for your permanent green card using Form I-829. This procedure permits the CIS to verify that you have maintained your approved investment for the required two-year period.
Important Tax considerations
The United States charges income tax on all US citizens and permanent residents based on worldwide income. Treaties and various exemptions eliminate some but not all of the risk of double taxation. Each state of the United States has its own tax system. All but four states raise revenue through state income tax. Investors should consider the tax effects of becoming a US resident before investing. As a general rule, if you are moving all of your assets to the US you will not have a problem with double taxation. If you will continue working or investing in your home country after moving to the US, a trip to your tax advisor is in order.
