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What portion of the EB-5 investment can be inventory?

I am the owner of a dental appliances plant in Brazil. I want to sell my products in the United States. I plan to open a company to import them, find a distributor, and if the sales are good, build a new plant in the United States. When I open my company to import my products, is my inventory considered part of the investment for EB-5 purposes, or do I need to deposit $500,000 in a bank account and then start my business with another investment?

Answers

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    Ed Beshara

    Immigration Attorney
    Answered on

    The minimum investment requirements can be comprised of personal funds and the value of inventory you own.

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    Anthony Korda

    Immigration Attorney
    Answered on

    8 CFR - 204.6 provides that, "Capital means cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur 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. All capital shall be valued at fair market value in United States dollars." This can include inventory.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Inventory can be part of the EB-5 investment, though usually investments are equity (cash) investments. Valuation of these assets will be key.

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    Steffanie J Lewis

    Immigration Attorney
    Answered on

    The law does not put a limit on the EB-5 investment of inventory and your plan appears feasible. I understand that you will independently create a U.S. company into which you will transfer the inventory. There is a limitation on inventory as your investment. Neither the inventory nor the new enterprise can be used to secure the funds required to create the new company. You would not need to deposit $500,000 in a bank account, but your business plan would need to show funds sufficient to make the plan reasonably profitable.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Inventory/equipment can certainly be part of a qualifying EB-5 investment. The issues that need to be addressed will include: (1) the valuation of the inventory, i.e., you must get it appraised and assign a monetary value to it, (2) your ownership of the inventory and how you lawfully obtained it, and (3) how the inventory will be used in your new commercial enterprise, which must create at least 10 jobs for qualified U.S. workers. You must show a credible and feasible business plan that is based upon verifiable detail. There probably should be a commercially reasonable mix of inventory and cash because your business likely will need that flexibility in order to start up and to survive. An experienced immigration attorney working together with a good EB-5 business plan writer can help with this process.

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    John J Downey

    Immigration Attorney
    Answered on

    Inventory may be used, as well as cash. You must provide documentation showing the market value of the inventory.

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    Charles Foster

    Immigration Attorney
    Answered on

    It appears that you wish to make a direct EB-5 investment in your own business, which you can do once you have done your due diligence and you believe that you can make a solid investment in a business that you will be able to maintain for a number of years and most important, that will allow you to employ at least 10 U.S. workers as required by law. Obviously, once you make an investment, a portion of same could be used to buy inventory. Transferring existing inventory and getting credit for that would be more questionable and risky.

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    Robert Cornish

    Securities Attorney
    Answered on

    There are many parts to your question. First, the $500,000 investment you mention would appear to be for a regional center investment. If you wish to raise money in $500,000 increments from others, you should affiliate with a regional center in a community where you can take advantage of tax abatements, loan programs, etc. I do not think your inventory counts as the investment. It needs to be capital at risk.

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