How can I split my $1 million investment between land purchase and working costs? - EB5Investors.com

How can I split my $1 million investment between land purchase and working costs?

I am planning to be an EB-5 investor (direct investment) and would like to invest $1 million for a residential home development. What problems, if any, will I run into if I want to use $600,000 to purchase the land and $400,000 to cover working capital (salaries for 10 workers, materials, outsourcing suppliers, etc.)? At the end of two years, what do the EB-5 requirements say I must do with any profits exceeding my initial $1 million investment?

Answers

John J Downey

John J Downey

Immigration Attorneys
Answered on

To the best of my recollection the cost of land is not considered as part of the investment. There are no requirements as to what you do with your profits.

Fredrick W Voigtmann

Fredrick W Voigtmann

Immigration Attorneys
Answered on

You must prove that your business will be an active business and not just a passive real estate investment. You will need a comprehensive business plan describing the industry, market analysis, financial projections based upon industry standards, etc. You may use the capital to purchase land, but you must show that all of your investment is at risk and that it will be spent on job-creating activities. Your business plan must be credible and it must be feasible. Therefore, you need an experienced EB-5 business plan writer, and an experienced EB-5 immigration attorney who can guide you through this process. The full amount of the capital must be at risk and you must sustain your investment for the full conditional period. There is no restriction on profits; you may take those out of the business before or after the two-year conditional period. You may NOT take out or reduce your principal investment amount until after you receive your permanent green card.

Salvatore Picataggio

Salvatore Picataggio

Immigration Attorneys
Answered on

The uses of funds can vary, but you may not be able to count the jobs created as a result of the land purchase. In regards to exiting the investment, there cannot be a guaranteed return of the investment funds, as the result would be an investment that is no longer at risk.

DISCLAIMER: the information found on this website is intended to be general information; it is not legal or financial advice. Specific legal or financial advice can only be given by a licensed professional with full knowledge of all the facts and circumstances of your particular situation. You should seek consultation with legal, immigration, and financial experts prior to participating in the EB-5 program. Posting a question on this website does not create an attorney-client relationship. All questions you post will be available to the public: do not include confidential information in your question.