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What are the “active management” requirements for an EB-5 investor regarding the new commercial enterprise (NCE)?

Can an EB-5 investor in a direct equity single-entity model only be a shareholder in a new commercial enterprise (NCE) under a corporate structure and still meet the "active management" requirement? I figured this could work as it is like a limited partnership. Or must the EB-5 investor also be active at the corporate office or a member of the board of directors?

Answers

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    BoBi Ahn

    Immigration Attorney
    Answered on

    As an EB-5 investor, you should either have a day-to-day management/operational role or have a say in the management of the company policies (i.e., a limited liability partnership). You cannot just be a passive investor/shareholder.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    An EB-5 investor must either engage in the day-to-day management of the EB-5 entity or be involved in policy formulation tasks.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    The investor can be a shareholder or limited partner in the new commercial enterprise (NCE) and still meet the active management requirement. You do not have to be a corporate officer or a member of the board of directors to meet this requirement.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    You can meet active management requirements either through day-to-day managerial control or through policy formation. While a limited partner and corporate shareholder may be similar, the limited partner is required to participate in the formation of policy activities for the Partnership rather than merely holding shares. Thus, if you want to set up an entity, you may want to establish a limited partnership so that you are one of the partners setting policies of the company.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    A limited partner is considered active, though there are other roles you could take on, as well.

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    Charles Foster

    Immigration Attorney
    Answered on

    For a regional venter EB-5 investment, an EB-5 investor may be a limited partner. However, for a direct equity single entity model, the investor should be more than a shareholder in the new commercial enterprise such as an officer and/or board member.

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    Jon Eric Garde

    Immigration Attorney
    Answered on

    Your latter supposition is correct. There needs to be some managerial involvement, although not as much as with other immigration investment strategies.

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