If I borrow money from an American friend (who can prove that her funds are from lawful sources) or from a foreign company of which I own 20%, can I use the loan proceeds for my EB-5 investment? Also, if I am not in the U.S., do I still need to show $200,000 annual income for the past 3 years or $1 million in assets?
You may use a loan, but it must be secured by your personal assets. The EB-5 program does not require a foreign investor to be an accredited investor. An accredited investor is defined by SEC laws and often used by regional centers to comply with SEC laws when marketing to foreign investors.
Yes, you can use a loan but it has to be secured usually by some type of real property. And yes, you need to be able to state that you have at least $200,000 income or $1 million in assets to qualify as an accredited investor.
Yes, the law defining capital investment for EB-5 purposes includes loan proceeds (indebtedness). The collateral must not be an assets of the new commercial enterprise receiving the investment and the collateral should be in investor''s own personal assets valued at fair market value. As for the accredited investor requirements ($200,000 income or $1 million net worth), these are not EB-5 requirements, but SEC definitions used by some regional centers in making sure they are complying with SEC laws regarding marketing their securities (ownership in limited partnerships for example) to potential investors.
Whether you are in the U.S. or not in the U.S. you may still have to prove that you are an accredited investor. The U.S. immigration attorney will be able to review the circumstances of your EB-5 investment and advise as to whether it is necessary to prove that you are an accredited investor. You may receive a loan in the investment amount and use these loaned funds to show you have made a personal investment in and EB-5 PROJECT. You are correct that the person loaning you the money will have to prove their authentication of these loaned funds which will then be subsequently personally invested by you. The USCIS will still need to know by what financial means and resources you will be in a position to repay the loan over a reasonable period of time.
Borrowed money is one of the acceptable sources of funds for EB5 investment. You will need to show the source of funds for the person or entity lending you the funds. If you have any further questions, please do not hesitate to contact our office.
There are many approvable methods of obtaining the legal and lawful source of funds, and loans could be one of them. We recommend retaining qualified EB-5 counsel to authenticate the source and transfer of funds, as our law firm does. Accredited investor status is required for all purchases of securities in a US business, regardless of where the investment comes from, and our law firm associates with experiences securities attorneys to assist with those matters.
No, it needs to be your own capital.
Yes, a loan secured by property can be the source of EB-5 funds. You will need to document the source of the funds used to purchase the property used as security for the loan.
