Questions & Answers

Can we pool EB-5 investments?

Is it possible to pool EB-5 investments (from say, 2-3 dozen investors) together and structure them as a micro-VC or super-angel fund that makes investments in hi-tech ventures? What are the possible issues that one might run into? Also, does being a Regional Center or not affect the situation in any way?

Answers

• Michael A Harris, Esq

  Answered on April 17, 2013

  Yes, you are allowed to pool funds together with multiple investors as long as each invests the required amount and at least 10 jobs are created for each investor (or maintained in the case of a troubled business). A regional center affects the pooled investment in that job creation may use indirect/induced jobs in addition to direct jobs. A pooled investment which is not part of a regional center cannot take advantage of this part of the law.

• Julia Roussinova

  Answered on April 17, 2013

  Possible issues would be the creation of the requisite 10 full-time jobs per investor; each investor is still required to invest either $500K or $1mln depending on whether or not the investment is in a rural are or TEA; and whether the pooled investment is a function of an approved project in a Regional Center or a properly structured and complying direct EB-5 investment.

• BoBi Ahn

  Answered on April 11, 2013

  Answer: Interesting question. Pooling the invested funds is not the issue as far as EB-5 is concerned, but whether a fund can function as an EB-5 Entity for which the investors would qualify, is the question. If the pooled investment is put into a Regional Center project, each of the investor responsible for the $500k or $1Mil may use those funds for EB-5, provided they meet the requisite 10 f/t hires, etc.

• Reza Rahbaran

  Answered on April 11, 2013

  Yes you may pool investments. The added advantage of doing this under the regional center model will be the indirect and induced jobs that will also be accountable, with direct investments the jobs must be full time. In a pooled investment scenario you will also need to show a direct link between the jobs created and each investor, as I am assuming this VC will be investing in different enterprises. For further information please contact Rahbaran & Associates.

• Lei Jiang

  Answered on April 11, 2013

  In order to receive green cards, each investor must create 10 full time jobs. Regional center is good when you could not create required job directly.

• Fredrick W Voigtmann

  Answered on April 5, 2013

  Yes; you can pool investments in either the direct or regional center EB-5 context. Regional centers help out when you cannot create enough jobs directly (10 fulltime jobs per investor) or when the project may be owned by a different entity. Each investor much make the required amount of investment, either $500,000 or $1million, regardless of whether or not the capital is pooled and/or funneled through a regional center.

• Roberto Ortiz

  Answered on April 5, 2013

  The possible issue with this type of investment is that it will not create full time jobs. The EB-5 requires that each investor has to create ten full time jobs with each investment that they make. If you have any other questions, please do not hesitate to contact me. Thank you.

• Philip H Teplen

  Answered on April 5, 2013

  Investments can most Definitely be pooled. The major question comes to how many direct and indirect jobs are created. I will be happy to personally work with you.

• Daniel P Hanlon

  Answered on April 5, 2013

  Yes, investments may be pooled, however, each investor desiring to acquire status under the EB-5 program must be able to show that his investment is creating 10 jobs. Regional Centers are USCIS'' investment vehicles in generally economically challenged areas that USCIS has approved for pooled investment, based on a showing that each investor''s infusion of capital will indirectly create 10 new US jobs in the economic area.

• Mona Shah

  Answered on April 5, 2013

  Generally the diversified investment (hedge fund) model you describe does not work. The new policy memo from USCIS has not really addressed this issue. The following question remain unanswered: "Whether and under what conditions a new commercial enterprise may identify a business plan to generate jobs in and remove capital from an initial job creating enterprise and move the capital into subsequent enterprises during the investors'' conditional residence (particularly, must all future such JCEs be fully documented in I-526, must they be principally doing business in RC or TEA, and must they create any new jobs if the original JCE maintains the jobs)." In general it is implied from the matter of Izummi that the source of the job creation must be identifiable in a certain project. "I-526 petitions may not be approved for investments (or loans) to businesses that will not be identified or selected until after the approval of the petition."

• Kenneth Byrd

  Answered on April 5, 2013

  Thank you for your question. Please call us at the number below to discuss in more detail.

• Stephen Berman

  Answered on April 5, 2013

  I can''t see how that would create 10 new jobs each as required.

• Ed Beshara

  Answered on April 5, 2013

  A group of investors may be able to invest in a direct EB-5 or EB-5 RC infrastructure.

• Steven Anapoell

  Answered on April 5, 2013

  You can pool investors for a specific, identified project. Blind pools such as venture capital and other private equity funds are not permitted.

• Shahzad Q Qadri

  Answered on April 5, 2013

  You can pool investors, however, the scheme you describe will only work if you use a RC, the regualar eb5 program will not work.

• Boyd Campbell

  Answered on April 5, 2013

  Yes.

• Bernard P Wolfsdorf

  Answered on December 31, 1969

  Yes provided you create 10 jobs for each $1,000,000 dollars, or $500,000 dollars invested. The amount depends on whether the business is in a high unemployment area (150% of national average) or a rural area, as defined by the guidance.