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How can I invest in a start-up company and take an equity stake?

I would like to join a start-up company with 1 million of my parents'' capital. Would I be qualified for EB-5 or would my parents be the ones qualified? How can that be distinguished so that I am the one involved in the program? Instead of receiving a return of interest on the investment, can I receive equity instead? The start-up company is a clothes manufacture and could potentially create 10 jobs.

Answers

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    Reza Rahbaran

    Immigration Attorney
    Answered on

    Your parents may gift you the funds; then, you may apply as the petitioner. Your parents will be required to show the lawful source of the funds gifted. Also, you may hold equity interest in the new commercial enterprise.

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    Martin J Lawler

    Immigration Attorney
    Answered on

    We assess people with such investments all the time. Your parents may be able to gift or loan you the capital. If you are under 21 they can invest and you immigrate with them. I am pleased to set up a call.

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    Ying Lu

    Immigration Attorney
    Answered on

    Gifted money can be used as EB-5 funds. Normally, there will be a gift agreement between you and your parents. Though we will trace your parents'' source of the gifted funds, we can make you as the petitioner of the I-526 petition. You can hold equity interest of the new commercial enterprise.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Your parents would have to give you the money so that it is in your possession, ownership and control. Then, it becomes your investment. An equity investment is allowed; it cannot be a loan to the company. You should consult with an experienced EB-5 immigration attorney to advise you on the specific requirements and how they relate to your situation.

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    David Morris

    Immigration Attorney
    Answered on

    A foreign national investor can participate in the initial funding and capitalization of a start-up company AND seek to qualify that investment for EB-5 visa purposes. Of course the investment documents need to be carefully reviewed to ensure compliance with the EB-5 program rules, but it seems very possible to make that work. As for the "return" on investment, it is likely that only an equity investment would qualify under the immigration rules. If the start-up were to simply provide a specified interest return, USCIS could view as an impermissible debt arrangement, and not an EB-5 qualified investment. Remember, the EB-5 program requires an investment that is "at risk." Some of the other issues you should consider are comprehensive business plan an detailed and credible "direct" job creation projections.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    You could be the principal investor with EB-5 benefit after receiving $1 million in gift from your parents. How you arrange to pay back your parents, if at all, will be a discussion you should have with your parents. If one of them are the investor, the only way you could benefit is if you are under 21 years of age as the derivative beneficiary. EB-5 petition and immigration benefit attaches only to one investor and his/her spouse and children under 21.

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    Rachel Lew

    Immigration Attorney
    Answered on

    Yes, you can qualify for EB-5 immigration benefits. Your parents will sign an unconditional gift declaration, stating that it is a gift to you and not a loan. But they will have to prove that the $ 1 million came from legal sources and show the path of funds that end up to your personal account and then to the clothes manufacture company. To qualify for the EB-5 individual investor, you will be the equity owner of the manufacturing company and the company will issue you stock shares equivalent to 1 million USD investment. You will use that 1 million to pay for start up costs, inventory, lease rents and employee salaries. In the company''s business plan, it should provide the number of employees and dates for hiring and salaries to indicate that your 1 million will be expended by the time you apply for permanent green card. In other words, you have to show that the 1 million is put at risk and not just in a reserve funds of the company account that you can redeem in the future.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    Your parents may gift or loan you the money and you may be the EB-5 investor provided the loan is not secured by the business itself. You should obtain some assurances though that 10 jobs will be created otherwise you will lose your green card after two years.

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    Marjan Kasra

    Immigration Attorney
    Answered on

    You may be able to have an equity stake, if the project you are investing in is an equity based project. You should consult with a qualified EB-5 attorney to check the structure of a given project to ensure your interests are best protected.

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    Stephen Berman

    Immigration Attorney
    Answered on

    Your parents can give you the money as a gift, then you will be the investor.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    If you want to be the one to obtain conditional permanent residency, then you will have to make the investment. However, your investment funds can come from a gift of funds from your parents. You can make equity investments that can qualify under the EB-5 rules and regulations.

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