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What can an EB-5 regional center do with investment funds?

Is an EB-5 regional center allowed to allocate investor funds prior to the full use of funds to generate jobs? For example, could the regional center invest the funds to trade stocks in NASDAQ or AMEX and use the funds to trade stock options to optimize the return of investments?

Answers

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    Julia Roussinova

    Immigration Attorney
    Answered on

    The primary focus should be job creating activities.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    To qualify for EB-5, the investment capital must be at risk in a new commercial enterprise for the purpose of job creation. Stock trading/investment likely would not demonstrate a sufficient nexus between the EB-5 investor's commitment of capital to the new commercial enterprise and job creation.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    The proper use of funds would be focused on the job creating business activities of the project or development. USCIS is working on guidance for the redeployment of funds after the job creating activities are ended/before the investor reaches the end of their conditional permanent residency period.

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    John J Downey

    Immigration Attorney
    Answered on

    Very doubtful. If for some reason the regional center had submitted this idea with their business plan and USCIS accepted it, then they could.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    Use of funds in this manner does not appear to be consistent with the critical job creation focus of this program, and should be discouraged. Moreover, there needs to be full disclosure in the PPM, but I caution against such use. If the full amount of $500,000 is not commuted into job creation, the case will likely be denied.

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    Raymond Lahoud

    Immigration Attorney
    Answered on

    The funds that are invested are held in escrow for the purpose of the projects designated for the investment. The money may not be played around with, using other investments, such as stocks or the like.

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