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How can off-shore costs be included in the EB-5 investment amount?

My venture has mostly Capex expenses (from U.S. companies), but a portion is used for web and app development being planned in India. If I purchase the services of an Indian IT firm for development, can these costs go toward my minimum EB-5 investment amount? If so, up to what portion of my investment amount could be devoted to this (say I devote $50,000 out of $500,000 for such services)?

Answers

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    Ed Beshara

    Immigration Attorney
    Answered on

    Your EB-5 investment in the new commercial enterprise in the United States can be used for soft and hard costs for the U.S. business operations.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    More information is needed. Based on the facts presented, your comprehensive business plan will really need to demonstrate credibly a clear connection between investment and the job creation of at least 10 full-time jobs in the United States.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    The EB-5 law and regulations require that all of your capital be placed at risk (that means it must be subject to both potential gain and risk of loss) and that the new commercial enterprise must create 10 jobs for qualified U.S. workers within the conditional period. There is no requirement that 100 percent of the capital must be spent in the United States. It is important, however, to show as close a connection (or "nexus") as possible between the investment/expenditure of capital and the creation of jobs. Therefore, USCIS might question the connection between the expenditure of $50,000 offshore (in India) and the creation of jobs in the United States. If your business plan/business model can credibly and feasibly make that connection, then it appears your capital will be qualified for EB-5 purposes.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    This may not really follow the intent of the program, which is for investments into U.S. companies to create jobs for U.S. citizens and permanent residents.

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    Charles Foster

    Immigration Attorney
    Answered on

    From the facts you presented, it may be difficult. The minimum $500,000 investment must be invested directly in the United States and be shown to create 10 jobs for U.S. workers directly or indirectly. I do not think any of the funds that you used to purchase the services of an Indian IT firm could be included toward your minimum investment.

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    John J Downey

    Immigration Attorney
    Answered on

    I think this will be problematic. The main objective of EB-5 is U.S. employment; any funds spent overseas on employment would probably be denied or at the very least would generate an RFE requiring an explanation.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    Off-shore expenses are likely to draw a lot of questions, particularly if they create jobs elsewhere but not in the United States. In addition, such capital expenses may make the accounting and other aspects of your operational budgets and revenues more difficult to discern for taxation purposes. This type of accounting brings into question the roles of outsourcing versus a major of goal of EB-5, promoting economic development by creating jobs in the United States. Consult both an EB-5 attorney and accounting experts before proceeding, because offshore production/outsourcing is not in any way related to EB-5 and the application may not be approved.

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    Margo Chernysheva

    Immigration Attorney
    Answered on

    There is not enough information to give you an answer. In general, you must show that the investment funds went directly into the creation of the qualified jobs. I would strongly recommend you hire an experienced immigration attorney to assist in your case.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    It would depend on how you structure the job count. If you are arguing the U.S. expenditure is creating U.S. jobs, obviously offshoring is going to work against you so would need to keep it to a minimum.

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    Peter Zhang

    Immigration Attorney
    Answered on

    If you are doing a direct investment, it should not matter as long as you made the required investment and have maintained 10 full-time jobs for qualified U.S. workers.

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