Investment category 5th of employment visa (Eb5), requires
- “Investment of Capitals,
- in a “new” enterprise,
- which creates “jobs” for American market.
The Eb5 has two types
- Regional Center Program, which means investing in a company
- Stand-alone, none-regional program, which means investing in investor's company
What constitutes the “Capital”?
But what is Capital? Congress has created the immigrant investment visa for the economic benefit of the US. The regulations set forth by congress regarding this visa, also defines Capital.
Capital is not only cash. Capital includes cash, inventory, tangible properties, indebtedness secured by assets owned by immigrant investor.
The immigrant investor should be personally and primarily liable and the assets of the “Eb-5 enterprise” is not used as collateral to secure the “indebtedness”.
Capitals value is “US Fair Market Values” of it.
Immigrant Investor must prove he is the “legal owner” of the Capital. Only portion of what has been earned through “lawful means” is considered “capital”.
To show the “Capital” is within the lawful means, one may introduce
Foreign business, corporate, partnership registration records, previous tax records, income, personal or business properties, licenses within the last “5 years”.
Evidentiary documents establishing the “sources of the capital”
Certified copies of formal court documents including but not limited to all pending civil or criminal actions, administrative proceedings within the last “15 years”.
Capital may partly be a loan to the investors, secured by promissory note. But the promissory note can not use part of the “immigrant US Eb5” company to secure the debt. The person should be personally and primarily be liable for the debt. The note must be “recoverable” and “amenable”. The money must be payable within “2 years”, no extension is accepted. And the value of the note is the “present market value”.
What constitutes an “Investment”:
Investment of his or her own capital s the key. The paths of the funds or the future paths of the funds must be fully documented.
The meaning of invest means “contribution”. Many prior investment Eb5 visas have not been resulted in receiving a visa because the capital can not be used as “loan” to fund the investment project. The funds actually must be placed at “risk”. A loan against assets of the “Eb5” subject, even if is initiated by the “investor” himself, is mean to secure the assets against the loan and therefore won't work.
To qualify, the investment must actually be placed at risk. A mere intention of “wanting to be at risk” is not sufficient for this purpose.
Purchasing a “share of a business” from a previous investor will not qualify for the purpose of Eb5, because the funds are not directly injected as “capital” to the Eb5 firm. It is paid to the shareholder, not to the business.
There should be no language of “guaranteed return”. According to the USCIS (United State's Citizenship and Immigration Services” : “if the investor is guaranteed the right to eventual ownership or use of a particular asset in consideration of the investor's contribution of capital into the new commercial enterprise, the expected present value of the guaranteed ownership or use of such asset will count against the total amount of the investor's capital contribution in determining how much money was placed at risk”.
Eb5 Business can generate profit. Profits can be used by the investor. Profits, if not otherwise prohibited can be distributed to the investor during his “conditional residency period” and even before the required jobs have been created. The distribution of the profits from the new commercial enterprise cannot be a portion of the investors initial minimum required qualifying investment. It can not be guaranteed to the investor.
For example, if the immigrant investor is given a right of ownership or use of real estate, the present value of that real estate will not be counted as investment capital put at risk of loss.”
Nothing prevents an immigrant investor from receiving a return on his or her capital in the form of a distribution of profits from the new commercial enterprise. This distribution of profits may happen during the conditional residency period and may happen before creating the required jobs. However, the distribution cannot be a portion of the investor's minimum qualifying investment and cannot have been guaranteed to the investor.
The investment of the capital must be in a new or an existing “in trouble business” and the terms to apply are complicated and open to interpretations. To succeed in receiving a Green Card, an investor must first to consult with a lawyer. Third party businesses in America are eager to solicit and provide terms that appears attractive, but not all of those businesses will lead to a green card. Engagement in a business activity or contract must be secondary to full consultation, investigation, assessment and primarily approvals of compliance with all EB5 immigration requirements. Such laws can not be waived, changed, modified to suit a business. A business investor must assure the “compliance” with the help of an experienced lawyer.
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