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How can an E-2 investor change to EB-5 direct investment?

I am already on an E-2 visa in the United States. Can I use my business income (after taking out all taxes) to invest in an EB-5 project while I am still on the E-2 visa? I will be buying two fast food franchise businesses to get the EB-5 visa. Will creating two separate LLCs for the two businesses be acceptable for the EB-5 program?

Answers

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Reinvestment like that may not work. Personal funds are required for an EB-5 investment.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    An E-2 investor certainly could qualify for EB-5, assuming all of the legal requirements are met. Since the EB-5 investment must be into a single new commercial enterprise, you might want to consider structuring your LLCs so that they are wholly-owned by a holding company or that one LLC wholly owns the other LLC. There may be other alternatives to structuring your business so that it qualifies for EB-5 and still provides for the liability protection and tax advantages you are seeking with two LLCs.

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    Charles Foster

    Immigration Attorney
    Answered on

    An E-2 investor, like any foreign national, also can qualify for lawful permanent residency through the EB-5 program by filing an EB-5 petition on Form I-526. Every investor must establish a lawful source of income in conjunction with the investment whether it be at the current $1 million or $500,000 level remembering that the foregoing amounts almost certainly will be raised next year by Congress. With respect to using funds generated by your U.S. business, they can be used, but only after you personally declare taxes on distributions and then reinvest them into the business. With respect to buying two fast food franchise businesses and creating two separate limited liability corporations and showing that you have made a qualifying investment, it would be better if there was a single legal entity; otherwise it would appear that the investment is in two different enterprises, which would not qualify for EB-5 purposes.

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    Kyle Barella

    Immigration Attorney
    Answered on

    It is certainly possible to "upgrade" from E-2 status to a green card via the EB-5 program. As your question is quite complicated, I would recommend reaching out directly to an EB-5 lawyer.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    Yes, you can use this income, provided you are not using retained earnings and provided you structure this new business correctly; then you can use these profits to apply for either an EB-5 visa via the direct project option, or invest in a regional center project.

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    Irina Rostova

    Immigration Attorney
    Answered on

    For a direct investment, one LLC would be more appropriate. You can absolutely use income that you earned at your E-2 business for an EB-5 investment.

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    Lana Kurilova-Rich

    Immigration Attorney
    Answered on

    The short answer is, yes, you can change status from valid E-2 to EB-5 on direct investment. However, you must invest into one entity, and that entity can create two other entities it owns and invest your capital into those entities. You cannot invest half of the required capital in one LLC and half in another. You must invest your entire capital into one entity first. However, nothing stops that entity from creating and owning other entities and investing your capital into those subsidiaries.

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    Raymond Lahoud

    Immigration Attorney
    Answered on

    As long as the money is lawfully sourced, yes, you can use that money.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    As long as you can trace the funds to a legitimate source (i.e., business income as verifiable by taxes, etc.) such income may be used to invest for EB-5 direct investment purposes. You will still need to meet the minimum capital requirements ($1 million or $500,000 if the commercial enterprise is located in a Targeted Employment Area (TEA)), and create the requisite number of jobs (>10 full-time jobs). If you meet these requirements only by combining the two businesses, then these should be owned by one entity and the requisite capital should be invested in that entity, through which the jobs are created as well.

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