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How long after I incorporate a U.S. company can I apply for EB-5?

I am an Indian programmer and my target audience is from the United States. So I plan to incorporate a company in the United States, but I will be managing the company from India for now. All money transactions will be made via my company U.S. bank account. Can I apply for the EB-5 program two years from now using the profit I make via my company? If yes, will it be treated as a new company even after two years, as per the EB-5 visa requirement?

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Retained earnings generally cannot be used. You must demonstrate that the company pays you salary and/or dividend and/or distributions on which you pay U.S. tax, and then you may use funds for EB-5 investment. However, funds must be from a lawful source. If you manage a U.S. entity without an underlying work authorization in the United States (for example, L-1 visa) this will not likely be lawful source of funds. On the other hand, if you are a passive investor, who receives passive income from the U.S. entity, then you should be able to use passive income as lawful source of funds. You should retain EB-5 immigration counsel before you proceed.

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    Raymond Lahoud

    Immigration Attorney
    Answered on

    It is really about job creation and investment. The investment must be money that is lawfully derived and if earned in the United States, properly taxed. You can use profit from a lawful enterprise that you have operated. There is some confusion in your question, however is your company an American company, which will be providing services to the United States, or are you simply incorporating it here in the United States, with operations/work to be conducted abroad. If it is the latter, why not just operate where you are and when you have sufficient capital to invest, move your company to the United States, through the EB-5 program?

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    No, you cannot use retained earnings. You have to pay tax and then use those funds for EB-5.

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    John J Downey

    Immigration Attorney
    Answered on

    Any company started after Nov. 1990 is eligible for EB-5 investment. You may start your company, and when you have the requisite amount to invest, you may do so. You then must show that your investment will create 10 new jobs.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Your question raises two issues, source of funds and establishment of a new commercial enterprise, in a rather novel way. A new commercial enterprise is considered "new" if it was established after 11/29/1990. Since yours is a new company, it does not matter if you invest now or wait two years after starting business operations to make the qualifying EB-5 investment. On the other hand, the source of funds issue is a bit tricky. Funds earned lawfully in the United States, or any other country, certainly may be used to make a qualifying EB-5 investment. In your situation, however, you must comply with all U.S. laws and regulations (including tax laws and immigration laws) in documenting how you earned the funds that were sourced from the United States. Also, you may not use retained earnings to invest in your company; you must take the earned funds out, pay any necessary taxes, and then document that you personally received the funds (you may have to do that in your bank account in India if you do not have a personal U.S. bank account). This will complicate matters and increase the documentary evidence needed to apply for EB-5, but with the right legal counsel, one experienced in EB-5 matters, you should be able to find a way to make it work.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Probably not. EB-5 investment funds must be personal funds.

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    Ian E Scott

    Immigration Attorney
    Answered on

    If you start a business and make profits, you can reinvest those after tax dollars in the same business and include that as your investment. This does not mean that money sitting in retained earnings counts, but instead it would have to be paid out to the owner, taxes paid, and then reinvested. The company will still be treated as a new commercial enterprise.

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    Stephen Berman

    Immigration Attorney
    Answered on

    Yes, you can do that, and yes it would be treated as a new company.

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