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What are the “accredited investor” requirements for the EB-5 Immigrant Investor Program?

If I am in the states on F-1 and my parents are going to gift me the funds necessary to apply for the EB-5 program, would I personally need to be an accredited investor? Can my parents serve as the “accredited” people? I ask because I have heard a lot of conflicting statements. Furthermore, if part of the source of funds consists of real property that my parents inherited, what type of documents would they need to prepare to prove that it was from a lawful source?

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    Answered on

    You, being a primary investor applying under the EB-5 investment program, will have to prove that you are an accredited investor. Your parents are merely gifting you the funds. However, the requirement of being an accredited investor is not an immigration requirement under EB-5 investment program. Regional centers, on the other hand, are required to have an exemption (Regulation D and Regulation S) from the registration requirement mandated by the Securities and Exchange Commission to offer their equity interests for purchase. As such, you must prove one of the following requirements: (1) you must have individual net worth, or joint net worth with your spouse, that exceeds $1 million at the time of the purchase, excluding the value of your primary residence; or (2) you must have annual income exceeding $200,000 in each of the two most recent years or a joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year. A gift is a valid source of funds, and it must be freely given to you without expectation of your parents of receiving repayment or anything else of value from the recipient in exchange for the gift. Documents you may have to provide include bank statements, tax returns, property ownership documents, deeds of gift, probate records and personal affidavits.

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    Answered on

    USCIS does not require that you be an accredited investor to qualify for an EB-5 visa. This is rather the U.S. securities law requirement. Under the current U.S. securities laws, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements. Under current U.S. securities laws, companies are given several exemptions from the registration requirements. To that end, any approved regional center or other securities issuer, such as a lawful business entity offering a business interest for sale, may use an exemption to offer you, as an investor, an equity interest. One of the common exemptions from the registration requirement in the EB-5 regional center context is offering an equity interest for sale (generally, a limited partnership interest or unit) to an EB-5 investor who qualifies as an accredited investor under Securities Regulation D. In this context, to be an accredited investor, you must meet either one of the following requirements: (1) have an individual net worth or joint net worth with your spouse of more than $1 million at the time you purchase an interest less than the value of your primary residence (i.e. your main home), or (2) have an annual individual income of more than $200,000 or annual joint income with your spouse of more than $300,000 in each of the preceding 2 years and a reasonable expectation of the same level of individual or joint income in the current year (values are in U.S. dollars). If your parents inherited the property, and plan to sell the property and gift the sale proceeds to you, you would generally need to provide evidence that your parents went through a process to inherit the property (probate or equivalent inheritance procedure under the local law) and show purchase and sale documents, the payment of any taxes associated with the sale of property (if imposed under the local law), gift documentation and complete funds tracing documentation. Preparing an I-526 petition is a complex matter and documentation varies on a case-by-case basis. To that end, it is highly recommended that you consult and engage the legal services of an experienced EB-5 immigration attorney to advise you and prepare your I-526 petition for filing with USCIS.

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    Answered on

    The EB-5 Immigrant Investor Program does not require you to be an accredited investor; however, keep in mind the gift you get is truly a gift from your parents without a requirement of repayment. To prove the gift, you will have to trace the funds from the source (i.e. the buyer of the property) to your parents' account and, eventually, to your account. If your parents inherited the property, you will have to show the inheritance documents or property deed evidencing ownership of the property.

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    Answered on

    An accredited investor is one who has demonstrated the financial means to support the project developer, qualifying for a registration exemption under Schedule D. Regarding your source of funds, your family would simply have to show that they inherited the property, which would normally be through the court records that would reflect the transfer of the property.

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    Answered on

    To be considered an accredited investor, your net worth must be >$1 million or have an income >$200,000 individually or $300,000 jointly with spouse for the past 2 years. To meet the SEC requirements for a regional center project, in most cases you will be required to show proof of being an accredited investor. As the investor, you must be accredited, not your parents.

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    Answered on

    To be an accredited investor, a person must demonstrate an annual income of $200,000, or $300,000 of joint income for the last two years with the expectation of continuously earning the same or higher income. An individual must have earned income above the thresholds either alone or with a spouse over the last three years. The income test cannot be satisfied by showing only one year of income and the next two years of joint income with a spouse. The exception to this rule is when a person is married within the period of conducting a test. A person is also considered an accredited investor if he has a net worth exceeding $1 million, either individually or jointly with his spouse. If your parents gift you $1 million and you invest $500,000, that would qualify. You would need the estate documents and, if possible, to show how the prior owner acquired the property, which can be challenging.

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    Answered on

    The securities attorneys can weigh in with more information but, generally, if you are the primary investor listed on the I-526 application (and the subscriber) then you would need to be an accredited investor. For most students, if their SOF is a gift from their parents, they would need to be gifted at least a million (assuming they have no other assets/income).

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    Answered on

    There are no EB-5 requirements for an accredited investor. These requirements refer to SEC rules governing United States issuers of securities. Most regional centers will have an accredited investor questionnaire that lists the requirements for net income or net worth over the last two years. If you are the investor, you should be the one who meets the regional center requirements, not your parents, even if they give you the funds.

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    Answered on

    The investor must be accredited to receive offering documents, and to sign the subscription and partnership agreement in the United States.

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    Many regional centers will insist the child be an accredited investor. The procedures at regional centers range from self-attestation to submitting bank statements or proof of being accredited. That is likely why you see inconsistency as some will self-attest they are accredited. Children can also meet requirements if they have assets that meet the dollar value (and their parents can transfer assets to them). The SEC states the person investing must be the accredited investor. For the property, you should have the inheritance/probate documents showing ownership as well as all fund transfer documents.

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    Answered on

    If they gave you the money as a gift, you would be able to invest in an EB-5 project. They could sell the land and present documentation that details the proceeds they received from the sale.

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