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How can I invest into a U.S. LLC then transfer the money into a project?

I would like to purchase an existing business in the U.S. For some liability consideration, can I first transfer my investment money into a U.S. LLC wholly owned by me, and then transfer my investment from this LLC to the existing business? How can I do this? How would this affect the processing of the EB-5 visa and filming the I-526? Would it make showing the source of funds more difficult?

Answers

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    Reza Rahbaran

    Immigration Attorney
    Answered on

    No, you must transfer the money from your personal bank account to an escrow account in the United States, or directly to the company''s bank account.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    You don't need to transfer the investment money into your wholly owned U.S. LLC and then re-transfer it to an EB-5 program. The transferring of funds from one entity to the other won't necessarily prevent liability rather it actually can create a set of new problems associated with inter-corporate transfers. Since you also stated you would own both companies, the funds will be traced back to you and in fact, in a couple of non-EB-5 cases related to inter-corporate transfers, inter-corporate like your planned transfer(s) could be considered as mere paper transfer(s) and in event of future litigation the ownership status could be easily pierced regardless of the LLC status (piercing means both corporations and you would be considered to have merged and you are as just liable as the two entities would be under any transactions). If not correctly done, inter-corporate transfer(s) can complicate your EB-5 processing and possibly lead to investigations by the USCIS and cause delays as you have to explain the transfer(s) through a few requests for further evidence and may finally result in a denial of your application if not properly handled. The risk of losing investment funds is part of any EB-5 investment program and no liability avoidance strategy through inter-corporate transfer(s) will effectively forestall the risk. On this question and all the attendant implications talk to immigration, accounting and corporate professionals on how to structure your planned EB-5 application.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    It is not a good idea to transfer into an LLC first. It is best to transfer to a personal account.

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    Jeffrey E Campion

    Immigration Attorney
    Answered on

    No. You must transfer the money from your personal account into either (a) an escrow account for the company you are investing in or (b) directly into that company.

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    Philip H Teplen

    Immigration Attorney
    Answered on

    Your question can be yes; however, involves the creation a very precise structure. I suggest that you call either me or any qualified experienced EB-5 lawyer for advice.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    The source of funds is critical so work with an attorney to document this each step of the way and you should be fine.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Since this is a direct EB-5 investment and not a regional center EB-5 project, you need to make sure that you are investing in the new commercial enterprise ('NCE') that is creating the jobs. As a direct investment, you cannot take credit for indirect job creation. Therefore, the NCE (or its wholly-owned subsidiary) must create the jobs directly. This should not affect the source of funds documentation because that relates to how you lawfully obtained the capital to invest in the first place. You should consult with an experienced EB-5 immigration attorney to advise you.

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    Johanna Keamy

    Immigration Attorney
    Answered on

    The issue is whether you are personally and primarily liable for the capital if the assets are held by a company and not a person. The relevant law is stated below concerning capital: Capital means cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. All capital shall be valued at fair market value in United States dollars. Assets acquired, directly or indirectly, by unlawful means (such as criminal activities) shall not be considered capital for the purposes of section 203(b)(5) of the Act.

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    Ed Beshara

    Immigration Attorney
    Answered on

    The EB-5 direct investment rules allow you to invest your personal funds into a LLC which can be the holding company of wholly owned subsidiary LLC companies. From the holding company, the personal investment funds can be distributed to the subsidiary LLC's. The filing of the I-526 would not be adversely effected and with a comprehensive business plan the I-526 should be approved. The source of fund preparation has nothing to do with this infrastructure.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    The investment funds must be personal investment funds. In your proposed scenario, the funds would be the U.S. company's funds. You may have options if your salary from that business is enough or if some sort of loan could be made.

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