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How close must an investor live to an EB-5 direct project?

I have a student visa and live in San Francisco. My uncle has a restaurant in Los Angeles that I want to invest in, and then I will be applying for EB-5. I would like to remain in San Francisco for school. Will there be a problem if I make a direct EB-5 investment in his Los Angeles-based business, but I live in San Francisco? How close do I have to live to the EB-5 direct business I'm investing in?

Answers

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    There is no specific rule on this issue, but the business plan should make clear who will be managing the restaurant (if it is you, that would be hard to do from San Francisco). Your role in the EB-5 direct business might be as president or CEO of the company, and you would review the financials of the business and have weekly teleconferences with whomever is managing the day to day operations for you.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    There is no geographic proximity requirement; however, you must be able to show that you are either engaged in day-to-day operations of the business or policy formulation. Business documentation should be carefully drafted to allow for a more passive role.

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    Ed Beshara

    Immigration Attorney
    Answered on

    The legal requirements for a direct EB-5 investment are that the required investment of personal funds be made into a new commercial enterprise/job creating entity, the investor owns an equity interest, and performs a managerial role even though minor. The investor does not have to live in the same location as the direct EB-5 project.

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    John J Downey

    Immigration Attorney
    Answered on

    There is no requirement that you live near your investment. The statute requires you to have an "active participation" in the investment. This is usually satisfied by being a limited partner.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    You must demonstrate that you are developing and directing the project.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    This is why the direct investment is difficult since you are supposed to either have a day-to-day management of the business in which you are investing or have a policy direction control of the business. Also, in order to remove the condition on your green card, that business must be sustained and thriving enough to add 10+ permanent full-time jobs with I-9s and W-2s for those positions and employees with your I-829 application. This is your responsibility to show that the business in which you invested had grown, to remove the condition. You cannot simply say I gave my money to my uncle and I had nothing to do with it and I do not know. Thus, while there is no location requirement of how close you have to be to the business you have invested in, you must be aware of how the business is doing and have some control over how it is run so that your removal of condition application will be approved. So, make sure that you get quarterly reports from your uncle on the viability of the business and how things are progressing, particularly in terms of adding jobs to that business.

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    Melanie Yang

    Immigration Attorney
    Answered on

    If you decide to invest in a regional center, you are a silent partner in the newly established enterprise and you are not required to live near the regional center. So you can live in whichever part of the United States you like.

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    Michael A Harris

    Immigration Attorney
    Answered on

    The law does not state that you must live in the same city as the EB-5 investment. For direct EB-5 cases it will depend on how your active role is defined in your partnership agreements. A direct EB-5 case can have a structure similar to a regional center project. That is, there is nothing in the EB-5 law, regulations and policy that says that a structure that makes you a limited partner (and your uncle the principal manager) cannot be achieved. So, you may be fine living in San Francisco and investing in Los Angeles.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    It will depend on the management role you take in the business. If you are taking day-to-day responsibilities, then you may need to be prepared to be at the project site each day. How much of a commute you want is up to you.

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