I have few years of work experience and I would like to use the EB-5 program. My family has been in VC/PE for over 10 years and I wanted to know if I can basically do a VC/PE type investment (gift) as long as it meets the TEA requirements and will create 10 jobs? What would be the criteria to meet for this?
Properly traced gifted funds can be used for EB-5 investment if the gifted funds originate from a lawful source. Direct EB-5 investment requires creation of a new commercial enterprise that will use EB-5 funds to create at least 10 full-time positions (at least 35 working hours/week). A comprehensive EB-5 business plan will also be required for the petition.
There are very strict rules for the structure of the EB-5 and in terms of the new commercial enterprise that has to be created. The investment must clearly show how the investment in the NCE creates the jobs in a wholly owned job creating entity. The VC/PE framework does not easily lend itself to direct EB-5, especially since the investment must be in a limited partnership generally and the investor must play at least an active role in management, or if a limited partnership, in policy development.
You must show funds were lawfully sourced and your funds, not that of the company.
Yes, we have done just this type of investment in the past. The most important aspect besides tracing the VC/PE money of your family (essentially, the "seed" money you are using for the investment) is the type of business you intend to create. Note that it cannot be speculative or a blind portfolio. You have to actually identify the business, draw up a budget/funding sources, and lay out a hiring plan with the expected number of employees. If you are prepared to do all that, it is doable.
Yes, investment funds can be gifted funds as long as the gift can be sourced back to show lawfully acquired.
This looks like a "personal investment funds" question. For EB-5, the funds used for the investment must be "personal" to the investor. I would love to discuss how this gift will work, but we would need to go back in time to see if the gift was earned from lawful sources as well.
