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How do my parents sponsor me for the EB-5 investment amount?

I am on a H-1B visa in the United States and wish to apply for EB-5. I am looking to invest in a new business in a TEA zone. My parents will be sponsoring me for the $500,000 amount. Some amount is in their account and the rest are properties in their name. Cash can be transferred to my account in the United States as a gift, but do they have to transfer the properties also to my name before filling for the I-526? Can I show my parents as my sponsors when the form is filed? We were planning to start investing and selling off properties as needed. I read an answer saying that father and son can be co-investor, and then the father assigns all the rights of the investment to the son by an executed power of attorney. Is this correct?

Answers

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    Julia Roussinova

    Immigration Attorney
    Answered on

    The best option would be for your parents to gift you the cash portion of the funds that is already available and also liquidate the non-liquid assets and then gift the cash proceeds to you for EB-5 capital, or alternatively transfer the properties in your name. As an EB-5 investor, you must possess and control the investment capital to file your I-526 petition. Please discuss your case with an experienced EB-5 attorney before you proceed further.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    The parents would not "sponsor" you as the EB-5 investor; instead, they can gift you the requisite minimum capital (i.e., $500,000 if the commercial enterprise you are investing in is located in a Targeted Employment Area (TEA)) so that you can invest that amount. You will have to be able to invest the minimum capital amount of $500,000 or $1 million (if the commercial enterprise is outside of the TEA) before you can file for the EB-5 petition, so having properties in your name, if you do not have the full minimum capital, is not enough; unless you will be using that as collateral for obtaining a bank loan.

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    Kyle Barella

    Immigration Attorney
    Answered on

    You will need to have full control over the entire investment amount (i.e. $500,000) when making the investment. Your father can gift you the money, and his source of funds will be detailed for the petition. As your question is quite detailed, I suggest you contact a qualified EB-5 attorney for additional consultation.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    If you are over 21 you and your father would each need to invest the full amount to obtain permanent residency through the EB-5 program. Are your parents gifting the money to you?

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    These are all excellent questions that can be best answered by your investment immigration attorney and the broker dealer that places you in the investment. Your parents may make a gift to you of the funds for the investment. As you are in the United States, your attorney and broker dealer will need to have evidence that you are an accredited investor. I recommend you seek the counsel of a knowledgeable professional.

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    Stephen Berman

    Immigration Attorney
    Answered on

    They cannot sponsor you. They can give you the money and you can invest it, and file your application as an investor.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    Your parents can certainly give you the investment fund of $500,000. However, the source(s) of the fund must be documented and be deemed legal. The entire fund must be transferred to you, the beneficiary, and be committed to the EB-5 filing (i.e. at the time of filing of the I-526). If you are working with a regional center, it is likely the regional center will have its own terms of agreement which clearly define when and how the fund must be under your control or the regional center. In most cases, the fund must be deposited into an escrow account before the I-526 is filed. Under this type of scenario, the option in which an asset is held but not converted into cash is not acceptable. Advisably, consult an EB-5 attorney and know the terms of agreement of the regional center you are working with before proceeding further.

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    Charles Foster

    Immigration Attorney
    Answered on

    In order to make a $500,000 investment, should you not have the funds, your parents can gift you that amount. They can either sell the properties and acquire the necessary cash and transfer it, or theoretically, they could first gift you the properties and you could then sell them. I think more typically, your parents would liquidate the properties first. Your parents are not your sponsors, but you would have to show the source of funds was a gift through your parents and how they acquired the $500,000. In terms of being co-investors with your father executing a Power of Attorney assigning all rights, that may be possible under certain limited circumstances, but it would far simpler to have your father gift you the funds.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    There would be many ways to do this - one of the best options would be for your father to liquidate the assets and then gift you the money, provided there are no gift tax consequences in your home country.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    If your parents are giving you the gift of the full investment amount, it would be better if they just give it and it be in your name when you make the investment. With the new "indebtedness" policy that USCIS came out with last year, there is a concern on having your parents owning a property that is being leveraged instead of you as the investor. The source of funds tracking will include all the finances of your parents since it is from their income and assets from which your investment was derived. While we had done the co-investor signatories with the business and then assigning all the control of the investment to the son as for EB-5 application purposes in the past, I think it may become more complicated with stricter review by USCIS recently. Thus, I would advise your parents to give a full gift to you so that you could make the investment in your name only.

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