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What financial limitations are there on an EB-5 investor’s funds?

Can an EB-5 investor''s funds be treated as equity in a project or are they limited to being a loan? If equity is allowed, is there a maximum investment allowed?

Answers

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    Ed Beshara

    Immigration Attorney
    Answered on

    The EB-5 requirements will allow an equity investment in a direct EB-5 project, while in an EB-5 regional center project the investment will be into the new commercial enterprise which will then loan the funds to the job creating entity.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    There is no maximum, only a minimum $500,000 in TEA investments and $1 million in non-TEA investments. Funds are generally equity. They can be given as loans by a new commercial enterprise into which you invest for job creation purposes.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    Equity is fine - the money must be at risk to qualify for EB-5. There is a minimum to obtain EB-5 green card approval, but no maximum.

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    John J Downey

    Immigration Attorney
    Answered on

    You may use the funds as equity. You would need to check with the attorney for the company on the percentage of equity allowed.

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    Ying Lu

    Immigration Attorney
    Answered on

    EB-5 investment can be equity or loan. The former is normally seen in direct EB-5 projects and the later is widely used in regional center projects. There is no maximum as to the amount of the investment.

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    Denyse Sabagh

    Immigration Attorney
    Answered on

    They can be treated as equity depending on the project.

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    Kevin Michael Reilly

    Immigration Attorney
    Answered on

    The financial investment required is $500,000 or $1 million depending on the economic status of the area where the investment is made. Loans are not allowable forms of EB-5 investments. The funds can be an asset, but the investment must create 10 new jobs for American citizens or permanent residents. There is no limit on the maximum investment.

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    John Tishler

    Securities Attorney
    Answered on

    EB-5 funds must come in as equity in the "New Commercial Enterprise" that raises such funds. However, if the project is sponsored by a regional center, the New Commercial Enterprise may in turn make a loan of funds so invested into the "Job Creating Entity" that will actually spend the funds on job-creating activity. In this structure, the return on investment to the EB-5 investors depends on the performance of the borrower under the loan. There is no maximum amount of equity that may be invested. Only a minimum of $1,000,000 per investor, or $500,000 if the project is located in a targeted employment area (TEA).

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    James Wolf

    Immigration Attorney
    Answered on

    There is no maximum loan or equity the EB-5 investor can contribute. The minimum EB-5 investment ($500,000 if the job creation will occur in a targeted employment area) must be contributed as equity into a New Commercial Entity (NCE). This money cannot be returned to the investor until sometime after the green card is renewed (I-829 is approved). The business that actually creates the jobs can be either the NCE, or, in the case of a regional center offering, the NCE may loan the money to another company which will create jobs, called the Job Creating Enterprise (JCE).

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Equity is allowed. In fact, the investment must be an equity investment into the new commercial enterprise ("NCE"). An NCE may be in the business of offering loans to projects and that is permissible, but in a sense, all EB-5 investments are equity investments. There is no maximum amount of capital, only a minimum amount. Also, all of the capital must be at risk and used for job creation purposes.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    There are two parts to this: First, the investor must actually make an investment into the new commercial enterprise. If the new commercial enterprise is also the job creating entity, then we are all set. If the job creating entity is a different entity, the new commercial entity can either make a loan or equity investment into the job creating entity. Total investment limits may be subject to SEC regulations. For that, we cooperate with experienced attorneys who specialize in those areas.

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