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Can an EB-5 Investment be made in a 501(c)3 non-profit?

Can an EB-5 Investment be made in a 501(c)3 non-profit?

Answers

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    Clem Turner

    Securities Attorney
    Answered on

    The EB-5 investment must be made in a commercial enterprise. It is unlikely if a not-for-profit would qualify, however there may be ways to structure around this limitation. You should speak to an EB-5 specialist about the facts and circumstances of your particular situation.

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    Kate Kalmykov

    Immigration Attorney
    Answered on

    The regulations require that the investment for EB-5 purposes be made into a "for-profit" entity.

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    Lei Jiang

    Immigration Attorney
    Answered on

    Yes. There are regional centers which are owned by non-profit organizations.

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    Toni L Castel

    Immigration Attorney
    Answered on

    No. An EB-5 investment must be made into a "commercial enterprise", which is defined (in 8 CFR 204.6(e)) to be "for-profit".

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    Susan Pilcher

    Immigration Attorney
    Answered on

    The job-creating commercial enterprise needs to be a for-profit commercial entity. If structured carefully, it is possible for a non-profit to develop a successful EB-5 project, but you will need to work closely with experienced EB-5 counsel to determine whether this will be feasible for your organization.

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    Steven Anapoell

    Securities Attorney
    Answered on

    Must be a for profit organization.

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    Philip H Teplen

    Immigration Attorney
    Answered on

    Absolutely yes. The issue is not profit but investment, risk and creation of jobs.

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    Daniel A Zeft

    Immigration Attorney
    Answered on

    No, EB-5 investments must be made in for profit enterprises.

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    Rebecca White

    Immigration Attorney
    Answered on

    The EB-5 regulations relate to for-profit commercial enterprises. There may be a way to to structure the investment to satisfy the requirements, but an investment in a 501(c)(3) on its face will not qualify.

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    Margo Chernysheva

    Immigration Attorney
    Answered on

    Here is the legal language of the statute with highlighted information that should help you to make a decision: All EB-5 investors must invest in a new commercial enterprise, which is a commercial enterprise: * Established after Nov. 29, 1990, or * Established on or before Nov. 29, 1990, that is: 1. Purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise results, or 2. Expanded through the investment so that a 40-percent increase in the net worth or number of employees occurs Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to: * A sole proprietorship * Partnership (whether limited or general) * Holding company * Joint venture * Corporation * Business trust or other entity, which may be publicly or privately owned This definition includes a commercial enterprise consisting of a holding company and its wholly owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business. Note: This definition does not include noncommercial activity such as owning and operating a personal residence.

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    Rakesh Mehrotra

    Immigration Attorney
    Answered on

    No. Investment can only be made in any new commercial enterprise. i.e. any for-profit lawful business. This does not include non-profit organizations. Commercial enterprise is defined as any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to: A sole proprietorship; Partnership (whether limited or general); Holding company; Joint venture; Corporation; Business trust; or other entity, which may be publicly or privately owned. This definition includes a commercial enterprise consisting of a holding company and its wholly owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business.

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    Ying Lu

    Immigration Attorney
    Answered on

    It depends. The law requires that all EB-5 investors invest in a new commercial enterprise. Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business. If it’s in the regional center context, through proper structure, EB-5 funds can be pooled in a new commercial enterprise (such as a for- profit LLP) and then be loaned to a non-profit entity. However, for direct EB-5, this mode may not apply because the direct jobs must be created ‘in’ the new commercial enterprise. If a commercial enterprise consists of a holding company and its wholly owned subsidiaries each such subsidiary must be engaged in a for-profit activity.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    EB-5 business should be for-profit business that will create 10+ full-time, permanent jobs.

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    James Stuber

    Immigration Attorney
    Answered on

    No. The EB-5 regulations, at 8 CFR 204.6(j), provide that a petition for classification as an alien entrepreneur must be accompanied by evidence that the alien has invested or is actively in the process of investing lawfully obtained capital in a ‘new commercial enterprise’. The regulations, at 8 CFR 204(e), provide that ‘commercial enterprise’ means “any for-profit activity formed for the ongoing conduct of lawful business . . . .” [Emphasis supplied.]

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    Alexander Lebedinski

    Immigration Attorney
    Answered on

    No. The investment must be in a commercial enterprise, which is defined as ''any for-profit activity formed for the ongoing conduct of lawful business'' - 501(c)(3)''s are not ''for-profit'' organizations.

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    Mahsa Aliaskari

    Immigration Attorney
    Answered on

    Unfortunately this is not an option, based on current regulations the investment must be made into a for profit entity.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    EB-5 investment must be made in a new commercial enterprise (with certain exceptions for investment in a preexisting business). The key concept here is "commercial," meaning any for-profit activity for the ongoing conduct of lawful business. The term new commercial enterprise does not include a nonprofit enterprise, such as a 501(c)(3) tax-exempt organization. However, certain types of corporations with a social purpose in mind may be formed which would allow for investment into for-profit activity, which could potentially attract EB-5 investors. Do not hesitate to contact me should you have further questions.

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    Shahzad Q Qadri

    RC Creator
    Answered on

    No, unfortunately it has to be a ''for-profit'' entity.

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    Angeline Chen

    Immigration Attorney
    Answered on

    No, the investment has to be for profit.

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    Taher Kameli

    Immigration Attorney
    Answered on

    The investment has to be done for profit. So, it is an opinion of many people that non for profit organizations may not be able to obtain EB5 investments.

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    Katie D T Sanders

    Immigration Attorney
    Answered on

    No, it has to be a commercial for profit enterprise.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    No, that is not an acceptable EB-5 investment.

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    Michael G Homeier

    Securities Attorney
    Answered on

    Not directly. USCIS points to the statutory language that an acceptable EB-5 investment must place funds at risk in return for the expectation of profit. The Service believes that non-profits by definition do not make a profit, hence they do not qualify under the statute. From a standard corporate law perspective, this misunderstands the true nature of non-profits: which is, they are intended to make as much profit as possible, but that profit is targeted to a charitable or similar purpose, rather than paid to the persons managing the business. For example, the non-profit American Cancer Society seeks to raise as much money as possible to help finance research of treatments for cancers - but none of that profit may lawfully be received by ACS'' management (beyond salaries and related compensation for employee services, and other expenses). Once USCIS comes to understand that a non-profit business in which an EB-5 investor would wish to invest has the same profit motivation as a private, for-profit business (they differ mainly in to whom the profit is paid), it may well sanction EB-5 investment into non-profits. However, the Service is not yet there, hence for the moment, such investments, made directly, are impermissible. By contrast, even under today''s operating logic, it may be possible that a for-profit business may be established by a non-profit as its subsidiary, and that EB-5 investment into the for-profit subsidiary would be acceptable to USCIS. It is not readily known whether USCIS has ever had this structure proposed to it, and what was its decision; if not, businesses may be reluctant to propose this to the Service, given its expressed position disallowing non-profits mentioned above.

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    Christopher Jaensch

    Immigration Attorney
    Answered on

    No, an EB-5 investment cannot be made in a 501(c)3 non-profit.

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    Stephen Berman

    Immigration Attorney
    Answered on

    I have not seen anything to indicate that it is a problem.

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