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Can a U.S. citizen lend an EB-5 investor money?

I am UK national and a friend who is a U.S. citizen would like to lend me the money to invest in a regional center. Does it matter if the loan is from a U.S. citizen that has no interest in the regional center, or does all the money have to originate from outside the United States? He can wire me the money from an overseas bank account.

Answers

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    Reza Rahbaran

    Immigration Attorney
    Answered on

    Yes, your friend may loan you the money and the loan must be secured by the investor''s personal assets. Your friend needs to show that the funds loaned came from a lawful source. Further, it is not required that the investment capital originate from overseas.

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    Anthony Korda

    Immigration Attorney
    Answered on

    Yes, the funds may be in the form of a loan from a U.S. Citizen. However, the loan must be secured on assets owned by the investor and the investor must be able to show that the assets were acquired lawfully.

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    Lei Jiang

    Immigration Attorney
    Answered on

    The money has to be yours. If you borrowed, the collateral has to be your asset. Besides, you have to be an accredited investor (meet certain income/ asset requirements).

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    Rohit Kapuria

    Immigration Attorney
    Answered on

    A gift is fine insofar as the giftor (your friend) can adequately demonstrate how s/he obtained such funds, i.e. they must have been legally acquired funds.

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    Ebiho Ahonkhai

    Immigration Attorney
    Answered on

    Yes, a U.S. citizen can lend an EB-5 investor funds. It is important to seek the advice of EB-5 immigration counsel to ensure that the loan terms are adequately documented and that the loan is sufficiently collateralized by the investor. Further, the investor will need to demonstrate that he or she earned sufficient income to acquire the property used to collateralize such loan. If the loan is not sufficiently collateralized, the provision of funds to the investor, could be construed as a gift by USCIS. We have advised several investors in matters where EB-5 qualifying investment funds were derived by loan and/or by gift and are happy to offer you a brief complimentary telephone consultation to discuss your options.

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    Marjan Kasra

    Immigration Attorney
    Answered on

    The short answer is "yes." However, you need to go over this with a qualified attorney to properly document the source of funds.

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    Michael A Harris

    Immigration Attorney
    Answered on

    Yes, it''s possible. But the way you secure the loan is critical here. You should consult with an experienced EB-5 attorney.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    Yes the source of funds may be from a loan, however it must be secured by property it cannot be an unsecured loan.

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    Margo Chernysheva

    Immigration Attorney
    Answered on

    A loan is allowed as part of EB-5 investor funds if it is backed by investor''s assets. If there are no assets, it is a gift and should be followed through gift tax law. Please hire an experienced EB-5 immigration attorney to assist you.

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    David Morris

    Immigration Attorney
    Answered on

    From the USCIS perspective, there is no prohibition on the EB-5 investor receiving funds from friends and family in the form of gifts or loans. Likewise, there is no immigration rule that requires the donor of the gift or loan be a foreign national, or be outside the U.S. In fact, we have handled many cases where the source of the funds to the EB-5 applicant came as a gift or loan from a U.S. person. The key is to ensure that the U.S. person can provide sufficient records to prove "lawful source of funds." Also, it is important that the EB-5 applicant and the U.S. person (loaning the funds) get advice from a qualified tax lawyer to make sure there are no special tax issues. Lastly, the loan cannot be collateralized by the EB-5 investment (under the USCIS rules).

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    The loan can be from a U.S. citizen, but it must be secured by your personal assets valued at fair market value. No part of the new commercial enterprise may be used as collateral or involved in the debt arrangement in any way. Furthermore, you will need to prove the source of funds to obtain the collateral in the first place. The funds can originate within the United States; they do not need to come from overseas. The funds need to be your funds (in your possession, ownership and control) in order to be considered your investment.

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    Rachel Lew

    Immigration Attorney
    Answered on

    The EB-5 regulations allow cash and cash equivalents, equipment, inventory, other tangible property and debts (valued at fair market value at time of investment) as capital to be invested in the new commercial enterprise. A loan from a third party may be used subject to execution of a promissory note with schedule of repayments and the loan is secured by your real estate or personal assets. However, for the EB-5 application, a qualified investor should be a natural person who, either individually or jointly with his/or her spouse, has a minimum net worth of $500,000, or a minimum net worth of $250,000, and, during the last taxable year had, and during the current year expects to have, a minimum gross income of $100,000 (net worth shall be determined exclusive of home, home furnishings and automobiles) . In addition, the investor is defined as an "Accredited Investor" as defined in Regulation D, that is: 1. Any natural person whose individual net worth or joint net worth with that person''s spouse, at the time of purchase exceeds $1,000,000; 2. Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person''s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level inside current year; If you satisfy these basic requirements and have the means to repay the third party loan by the time I-829 petition is filed, the loan can qualify as capital for Eb-5 purposes.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Generally, as long as the actual investment is made from your personal account, you can qualify. Retaining EB-5 counsel, like our law firm, to assist you with authenticating the source of funds (gifts, loans, salary, sale of assets, etc.) is essential.

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    Jessica Marks

    Immigration Attorney
    Answered on

    There is no prohibition against using funds that are a gift for the EB-5 investment. However, the evidence must demonstrate how the giftor lawfully obtained the funds. Additionally, your friend would be wise to speak to a tax professional about potential gift tax consequences.

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    Ed Beshara

    Immigration Attorney
    Answered on

    You may use borrowed or loaned funds from a friend or family member and use these funds towards your personal investment funds that will be required to be invested personally into an EB-5 project. Please note the agreement to loan you the funds can occur in the United States and from a U.S. institution or U.S. individual. There will also be a need to show how the lawful source of the funds were accumulated and transferred to the foreign national investor.

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    Robert West

    Immigration Attorney
    Answered on

    It is possible but the loan must be secured. An unsecured loan will not work.

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    Ying Lu

    Immigration Attorney
    Answered on

    If your U.S. citizen friend will lend you the money, this friend needs to prove the legitimacy of his/her funds and you also need to justify why this friend wants to lend you this money. It is also possible that USCIS will ask how you can pay back this personal loan. It is not necessary that the investment funds originates outside of the U.S.

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    Olga Karasik

    Immigration Attorney
    Answered on

    Thank you for your question. There is no prohibition for a U.S. citizen to lend you money for the purpose of EB-5 investing. However, there are certain safeguards. First, the U.S. citizen will have to show the clear and clean source of the funds. Second, the loan cannot be secured by your investment in the EB-5 project and will have to be secured by some of your other assets. If this is contemplated as a unsecured loan, you will need to show close ties with this person, whether family or close friendship or some other compelling reasons why he/she would give you last unsecured loan. I hope it answers your question.

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    Neville M Leslie

    Immigration Attorney
    Answered on

    No, it has to be the investor''s own money.

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