If an investor wants to invest in the EB-5 program by investing in an existing business, can the investor do so by buying the company's stock? Also, does a lease commitment for a year count as money at risk? How does stock count as at risk?
Buying stock is considered a passive investment; therefore, it may not be eligible for EB-5 purposes. Another issue will be the ability of your investment to create the jobs required by the EB-5 visa program.
No, you cannot apply EB5 visa by investing money in stock or purchasing a real property and leasing it out. You need to create 10 jobs.
If you are doing a direct investment as opposed to a regional center investment, then a passive investment such as purchasing stock will not work. You must be coming to develop and direct the business.
Buying companys stock should be considered an investment. Keep in mind that the business plan must demonstrate how the funds will be sued for job-creating purposes. If investing in a corporation, it is normal for investors to receive stock in exchange for their investment. A lease commitment would be one factor that the USCIS would consider in adjudicating the petition. As for the stock purchase, the USCIS will look to see how the funds will be used in the business and how they will be placed at risk in furtherance of job creation. The fact that the investor received company stock in exchange for the funds should not negatively affect how USCIS will review the petition and business plan. It would be wise to have an experienced EB-5 immigration attorney review the business plan and prepare the I-526 petition package to make sure everything is in compliance with the EB-5 law and regulations.
Equity investments are permissible for both direct EB-5 investments and Regional Center EB-5 investments. Investing in an existing business is also permissible, though there are different job creation requirements that will need to be considered. In terms of the least, the requirements for the investment is that the funds ($500,000 or $1 million) are placed at risk. That is, while the value of a lease itself may not be considered, the money invested to lease the property will be.
The investment can be a stock equity investment, or via a loan to the job creating enterprise. There are special rules for investing in an existing business that makes it more complicated. A lease does not on its own resolve the issue-mainly need to show the investment is tired to job creation. The money has to be at risk in that it can be lost.
Just buying some stock in a company is considered passive investment not eligible for EB-5 investment. You must either have an active day-to-day management of a business or at least a stake as a limited partner of a partnership that will have an oversight capacity of a business.
For EB-5 purposes, the investment may not be a passive one. The at funds must be at risk with no guarantee of return of funds throughout the process which can last five years, this timing relates to when the conditional residence is acquired and when those conditions are removed.
To qualify as an EB-5 investor, you have to show USCIS that you have made a personal investment in a new commercial enterprise and/or job creating entity. The investment by you might be made in either an existing commercial enterprise or a new commercial enterprise. That is, the U.S. commercial enterprise may have been active for the past five years and continuing to employ existing personnel and generating revenues. By U.S. corporate law making a personal investment directly in the U.S. business, you are becoming an equity investor which may mean that you are also becoming an owner of the corporation through the issuance of shares or membership certificates of the U.S. corporation. The U.S. enterprise you are investing may have ownership of buildings and other assets. You in fact, are not individually owning those assets or buildings, in fact you are only the owner of the corporation by being an equity investor.
