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Once an EB-5 investment is made, what is the investor’s role in the new commercial enterprise for the term of their conditional residency?

I am asking this question assuming the investor is a minority owner of the enterprise. If the majority owner wants to sell the enterprise, can the minority EB-5 investor sell their stake as well during the 2-year conditional residency term? If yes, can the investor then submit their I-829 and apply for nonconditional residency if the investment meets the EB-5 visa requirements?

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    Answered on

    Do not assume everything will work well in this fashion as the sale may leave the EB-5 investor in a lurch for a number of reasons. First, a sale at the end of two years means you may not be fully invested when the I-829 is actually under consideration. What if there are any Requests For Evidence on any of your information, data or records. You may not be able to effectively respond which may result in denial. Second, unless the sales agreement is properly written, the I-829 reviewing process may not be supported by the new emerging corporate entity once you have divested from it and may unwittingly cause the I-829 not to be approved. Finally, look at the exit clause of your investment; unless clearly allowed, you may not be able to sell. Thus, it is advisable to talk to an EB-5 attorney and, to be cautious, do not sell before the I-829 is approved.

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    Answered on

    The role of the investor in the new commercial enterprise, once the EB-5 investment is made and your petition is filed on Form I-526, will depend on your circumstances. If you have invested in your own company or a company in which you have a significant interest, then presumably you would exercise a great degree of managerial authority. If you have invested through a regional center and you are a limited partner, your role will be de minimus; simply the legal role or position of limited partner. It sounds like you have made a direct EB-5 investment and while the majority may very well sell the enterprise, should you, as a minority EB-5 investor, sell your stake during the 2 years, you may very well be deemed to have failed to have maintained your investment at risk as it must be maintained through the full 2 years and until you file your I-829 petition to remove conditions.

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    Answered on

    An EB-5 investor must be invested in the commercial enterprise through which he or she has gained lawful permanent residence at least until the I-829 application to remove conditional permanent residence has been filed and approved. Irrespective of what the majority owner does with his or her investment, you need to be invested and created jobs maintained for the duration for EB-5 purposes.

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    Answered on

    You need to read the documentation with the new commercial enterprise (regional center or private project) and make sure you understand exactly what your interests are and what you rights are. In most regional center projects, you are a limited partner and these are questions you need to ask before investing your money.

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    Answered on

    The new commercial enterprise must create ten jobs and the funds must remain invested until the I-829 is granted. Please, before you invest, work under the guidance of a qualified investment immigration attorney. There is simply too much at stake.

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    Answered on

    The role of an investor would depend on the offering documents of the new business enterprise. But, normally, it is that of a limited partnership and, as the title states, your role will be limited. The law requires that the investor takes an active role, such as setting policies of the business. I do not understand what you mean by selling your interest including a conditional green card. Your status cannot be sold.

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    Answered on

    First, you need to examine the documents including the agreements you have signed. Second, from an immigration position, you need to show that the investment has been sustained at least until the filing of the I-829. So the money must remain at-risk for at least two years from the approval of conditional residence.

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    Answered on

    The answer to this question largely depends on how your corporate and investment documentation was drafted, although immigration analysis is necessary to determine the practical effect on your immigration process. Whether you have the right to "tag-along," as corporate attorneys generally refer to it, in the sale depends on the documentation. Typically, one would look at the operating agreement, partnership agreement or articles/bylaws of the company that they invested in to find this answer. In some cases, these issues might be covered in separate agreements, such an investor rights agreement, a shareholder/stockholder agreement or buy-sell agreement. In most EB-5 deals, the EB-5 investors do not have these "tag-along rights," but you would want to refer to your documentation and perhaps a corporate attorney to confirm for your case. With respect to immigration implications, I would defer to the immigration attorneys.

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