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What capital qualifies for EB-5 investment?

I am planning on forming an EB-5 regional center in a Targeted Employment Area, with a focus on jewelry manufacturing. Can foreign investors contribute valuable jewelry totaling $500,000 for the regional center's inventory instead of making a cash investment?

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    This does not appear to be a feasible idea. Also, there is an issue of valuation of the jewelry and a host of other issues. Further, will this business investment result in the creation of at least 10 jobs? There are a lot of issues that need to be ironed out on this project. Advisably, seek further counseling with an EB-5 attorney before proceeding further.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    The definition of "capital" for EB-5 purposes includes non-cash items such as inventory, equipment and other tangible property. The items would have to be properly appraised and documented (along with the source of funds to purchase them or how they were legally acquired) to show that they are worth $500,000. The question would arise as to the use of the jewelry being contributed and how it is connected to job creation, i.e., if the EB-5 project's business is jewelry manufacturing, how will finished jewelry pieces fit within its business plan and model? Perhaps the jewelry to be "invested" will be used in the manufacturing process somehow. It is a novel concept, but USCIS would have a lot of questions about how the business plan shows a connection between the investment and job creation.

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    John J Downey

    Immigration Attorney
    Answered on

    Yes, capital includes cash as well as inventory.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    Technically jewelry could qualify, but realistically this is going to be very hard to get an approval. You need to have watertight valuations and even then expect problems. You need to be very cautious showing where the money was earned to buy the jewels. It''s a huge tracing job.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    The law says "Capital means cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien entrepreneur [immigrant investor], provided that the alien entrepreneur [immigrant investor] is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness." So, maybe! The specific details of the project structure would need to be prepared by experienced EB-5 immigration attorneys and a team of professionals, as this would still be an uncommon structure.

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