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What is the purpose of an EB-5 investor signing the Form W-8BEN?

What is the purpose of an EB-5 investor signing the Form W-8BEN? Will the regional center file this form with the IRS?

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    Julia Roussinova

    Immigration Attorney
    Answered on

    This form allows a regional center to determine the withholding amount on income received by a foreign investor subject to a bilateral income tax treaty between the United States and the home country of a foreign investor (if any). Please consult a tax professional or tax attorney to complete the form.

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    Steffanie J Lewis

    Immigration Attorney
    Answered on

    Non-U.S. persons are subject to U.S. tax at a flat 30 percent rate on certain kinds of income they receive from U.S. sources. The tax is withheld at the source by the payor of the income. If a non-U.S. person receives this type of income, he must provide the Form W-8BEN directly to the payor of the income, not to the IRS, to establish that he is not a U.S. person and to claim that he is the beneficial owner of the income. When the payor of the income has the W-8BEN on file, the payor will undertake its withholding duties. When a regional center issues income, the investor needs to sign and return the Form W-8BEN to the regional center in order to claim himself as the beneficiary of the income from his investment. A regional center as the payor will undertake its withholding duties on behalf of the investor upon received the signed Form W-8BEN. In the event withholding is required and the payor fails in its duties, the payer can be held personally liable for the tax.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    As an investor in a U.S. company and, eventually, a U.S. permanent resident, you may be subject to U.S. taxation on your U.S. and worldwide income. Seek out an experienced tax attorney for U.S. and international tax planning, which should be done in anticipation of your investment.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    This is a form required by the banks and by the IRS. The form is necessary to identify the beneficiary of funds held in a U.S. bank account where the beneficiary is a foreign national without a social security number or tax identification number. The form is usually for bank recordkeeping purposes.

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    Michael A Harris

    Immigration Attorney
    Answered on

    You should confer with the regional center that you are investing with, as well as your own personal tax and estate attorney. I believe that this is signed by you because you may be due interest payments as a result of your membership in the new commercial enterprise investment group you joined. You can also read more online here, http://www.irs.gov/instructions/iw8ben/ch01.html#d0e175, which explains in part: *Who must provide Form W-8BEN *You must give Form W-8BEN to the withholding agent or payer if you are a nonresident alien who is the beneficial owner of an amount subject to withholding, or if you are an account holder of an FFI documenting yourself as a nonresident alien. If you are the single owner of a disregarded entity, you are considered the beneficial owner of income received by the disregarded entity. Submit Form W-8BEN when requested by the withholding agent, payer, or FFI whether or not you are claiming a reduced rate of, or exemption from, withholding. You should also provide Form W-8BEN to a payment settlement entity (PSE) requesting this form if you are a foreign individual receiving payments subject to reporting under section 6050W (payment card transactions and third-party network transactions) as a participating payee. However, if the payments are income which is effectively connected to the conduct of a U.S. trade or business, you should instead provide the PSE with a Form W-8ECI.

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    Oliver Huiyue Qiu

    Immigration Attorney
    Answered on

    IRS Form W-8BEN is part of the due diligence required by the regional Ccenter and it actually benefits the EB-5 investor. By completing this form, the EB-5 investor notifies the regional center of the existence of a bilateral tax treaty between the United States and his/her home country that could reduce or exempt the amount of income tax an investor should pay. The regional center uses it to determine how much withholding it should take out of the income owed to the EB-5 investor. Such income may include interest [including certain original issue discount (OID)]; dividends; rents; royalties; premiums; annuities; compensation for, or in expectation of, services performed; substitute payments in a securities lending transaction; or other fixed or determinable annual or periodical gains, profits, or income. Unless exempted by the tax treaty, such income is subject to U.S. tax at a 30 percent rate.

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