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How can my investment funds be used in EB-5?

I am an EB-5 investor, and would like to invest 1 million dollar for restaurant business in Los Angeles. Can I use 500k to purchase the restaurant and the property and 500k for working capital? Thanks!

Answers

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    Reza Rahbaran

    Immigration Attorney
    Answered on

    You may use funds to purchase the restaurant and for working capital as long as you create 10 new jobs and spend all $1M within 24-30 months of being approved for your EB-5 visa.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    The funds must be used for "job-creation purposes." Therefore, in order for land purchase costs to be considered qualifying EB-5 capital, a nexus or a link between the land purchase and job creation must be shown. This can be done in the business plan and by comparing industry practices for similar restaurants in your area. Do most restaurants of similar size and location purchase the land or do they lease? Is there a significant benefit to the business in purchasing the land as compared to leasing? For example, you might show that the financing costs are lower than the lease/rental payments and the savings allows you to hire more employees. That way, you can show a nexus between the expenditure of the funds and new job creation. This assumes that you are starting a new business and not purchasing an existing business that already has employees. There are different rules for troubled businesses and for restructuring or expanding existing businesses. You should consult an experienced EB-5 immigration attorney to advise you in these matters.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    Yes, that would work if it is all part of the same commercial enterprise. It will need to be structured properly and of course ten jobs will need to be created in the commercial enterprise.

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    Jeffrey E Campion

    Immigration Attorney
    Answered on

    It all depends. Remember you must be creating 10 new jobs. If it is an existing business, this could create issues for your application.

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    Margo Chernysheva

    Immigration Attorney
    Answered on

    As long as you can link your investment to creation of the jobs, yes. Use an experienced immigration attorney to assist you.

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    Philip H Teplen

    Immigration Attorney
    Answered on

    Depending upon how the business plan is written, such a divide and allocation for working capital is possible. I suggest that we have a conversation in detail to discuss.

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    Shahzad Q Qadri

    RC Creator
    Answered on

    The investment needs to be invested into a job creating entity and show that it will create the requisite number of jobs (10). You can use the formula you propose if in fact you are investing in a TEA, area of high unemployment.

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    Dawn M Lurie

    Immigration Attorney
    Answered on

    The USCIS has recognized that EB-5 monies can be used to pay financing costs to unrelated third parties, purchasing the land, developing the plans, obtaining the licenses, building the structure, staffing the restaurant, and the many other types of expenses involved in the development and operation of a new restaurant. So yes, your $1 million investment can be used to purchase the land, build the restaurant and then operate it. You will also need to create 10 direct jobs to qualify for the EB-5 visa and you should consider how you will meet the necessary EB-5 management requirements prior to structuring the deal.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    The land purchase is considered a non-qualifying cost of EB-5 for job creation requirement. However, in your case, if you are the sole investor with $ 1million for which you must create 10 direct jobs, the allocation of how that $1 million is used is your business plan and USCIS will not dictate how you purchase and run your business as long as you create 10+ permanent, full-time job with your total investment.

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    Angeline Chen

    Immigration Attorney
    Answered on

    Yes, you can use $500k to purchase the restaurant and property and $500k for working capital. You just have to create 10 more jobs by the time you file to remove the conditional residency.

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    Jan H Brown

    Immigration Attorney
    Answered on

    Yes, you can use some of your investment funds as capitalization of your venture. If you would like to contact me directly about your project, I will be happy to assist you.

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    Karen Weinstock

    Immigration Attorney
    Answered on

    Yes, that is acceptable. However, note that if you are purchasing an existing business, it will have to be treated as an expansion and create 10 more additional full time jobs than what they currently have.

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    Rohit Kapuria

    Immigration Attorney
    Answered on

    Generally, yes, part of your $1 million investment could go towards the purchase of the restaurant. However, the $500,000 used for the purchase of the property cannot be allocated to the determination of job creation. The broader question is whether this restaurant will result in the net creation of 10 new jobs. This means that if, for example, the pre-existing restaurant had an operation with 8 staff members, you can only count the jobs that are over the 8 that previously existed. If, however, the pre-existing restaurant had not been operational for a while, then perhaps this issue would not be as important. The other question, though, is whether the restaurant was formed after November 29, 1990. If it was not, then you have some additional issues to deal with.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    As long the the requisite minimal amount of investment for EB-5 purposes (i.e., $500K for TEA and $1million for the rest) is invested in the business and, the capital/investment may be used for purchasing the property and/or for working capital.

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    Boyd Campbell

    Immigration Attorney
    Answered on

    Not unless the restaurant is in a TEA. USCIS does not believe that purchases of land or real estate creates jobs.

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