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Does an investment fund qualify as an EB-5 direct investment business?

Is setting up a venture capital fund or investment fund qualify for an EB-5 direct investment? Part of the $500,000 will go into fund, and the rest will be used to hire employees. Is this an acceptable business?

Answers

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    Marko Issever

    EB-5 Broker Dealer
    Answered on

    Unfortunately, you will need to provide more details on the proposed business plan and mode of operation to get a straight answer here. In principle, any new business that creates 10 new full-time positions should be OK, but that all depends. For example, if all you do is in reality purchase securities and the employees are not salaried but compensated totally on a success basis, most likely it would not qualify. On the other hand, if you genuinely make an investment in the business and hire salaried staff, then it could be ok.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    You must be able to document that invested capital in the fund will be used to create at least 10 full-time positions as supported by a credible EB-5-compliant business plan. Passive investment will not qualify for EB-5.

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    Charles Foster

    Immigration Attorney
    Answered on

    Whether or not a venture capital fund or an investment fund will qualify for a direct EB-5 investment at the $500,000 level depends upon a variety of facts. You would still have to show that the principal location of the business is located in a targeted economic area (TEA) and that it will create directly 10 jobs for U.S. workers. Normally a fund invested in other businesses would not qualify.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    If the investment company has 10 full-time direct positions, then yes. Administrative staff, professionals, HR, sales, customer service, etc.

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    Dale Schwartz

    Immigration Attorney
    Answered on

    It should qualify, if it can hire 10 U.S. employees.

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    Mitch Wexler

    Immigration Attorney
    Answered on

    Any for-profit business can work as long as it employs 10 full-time, direct employees as per its business plan. Be sure it is in TEA if you are planning on investing $500,000.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    Would need more details, but I don't see why not.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    While the fund model has been accepted, it has been very difficult and it must be proven that the money invested will be directly earmarked for job creation. This is doable but difficult.

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    Phuong Le

    Immigration Attorney
    Answered on

    Possibly if the VC fund can clearly breakdown the 10 full-time positions that they're hiring for (including salaries). I also assume this VC fund has additional (non-EB-5) funds to invest because there won't be much left to invest after paying 10 full-time salaries.

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    Belma Chinchoy

    Immigration Attorney
    Answered on

    Likely not, but hard to tell based on the facts presented here. Consult with an attorney.

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    Hassan Elkhalil

    Immigration Attorney
    Answered on

    Depends on your plan. This scenario requires a close scrutiny of your plan and whether it will meet the EB-5 program requirement! Your best option is to consult with an immigration attorney who is experienced in EB-5 for the best answer to your question.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    If you are starting a VC firm/company and hiring the requisite number of employees to operate the company then that may work, but investment into a VC fund itself won't work for EB-5 purposes since passive investment does not qualify.

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