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How much flexibility do investors have in terms of showing their source of funds?

When you are planning to invest directly into a new business located in a TEA ($500k investment), do you need to have all that cash ready in a bank account? Is it possible to show 70 percent of the cash in the bank and the remaining 30 percent in assets (in overseas property investment) to be liquidated in next 2-3 years? All funds are legally sourced and documented.

Answers

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Although an EB-5 investor may be in the process of investing into an NCE, you must be able to demonstrate that the investment funds are committed to the NCE and at-risk at the time of the I-526 filing. One option is to have the assets liquidated and then to deposit 100% of funds into an escrow account to be released to the NCE upon approval of I-526 petition. Another visa option you may consider is the E-2 treaty visa if you are eligible.

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    Charles Foster

    Immigration Attorney
    Answered on

    While you are planning, you can take as much time as you want. However, at the time you file the EB-5 Investor Petition on Form I-526, you must show not only the source of funds but that those funds are readily available. No, you would not be able to show that you had the assets, which could be liquidated in 2 or 3 years for one simple reason: at the time the I-526 petition is filed, at the very least you must have invested your minimum $500,000 in an escrow account so that those funds are out of your reach subject to the terms of the Escrow Agreement. Also, per pending legislation, there is some likelihood that the minimum $500,000 investment amount could soon increase to as much as $1 million or even more.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    The regulations do require investors to be "investing or in the process of investing". However, it is much safer to have invested at the time of filing. Most advisors will recommend having the full amount invested, meaning irrevocably committed or spent. For removing assets, they need to also be committed and should be liquidated and invested in the new commercial enterprise. If eligible for an E-2 treaty Investor, that may be a viable option with only 70% irrevocably committed to a business that is real and operating.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    While the EB-5 law does allow for an investor to be in the process of investing, it is wise to have the full amount of required capital committed to the new commercial enterprise (NCE) (i.e., deposited in full into the NCE bank account and at-risk before submitting Form I-526).

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    BoBi Ahn

    Immigration Attorney
    Answered on

    To process as an EB-5 Immigrant Investor, you need to invest or be in the process of investing the minimum requisite capital (i.e. $500,000). You need to have 100% of the funds ready to invest. In terms of demonstrating a legal source of funds, you need to be able to trace those funds to a legitimate legal source (i.e. money from salary, from the sale of a business/assets or from a gift, etc.).

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