Can the funds used to purchase real estate qualify as part of the required capital? - EB5Investors.com

Can the funds used to purchase real estate qualify as part of the required capital?

Instead of leasing a space and paying rent, can I buy a commercial space, say for $500K, and use the rest of the $500K to buy inventory etc. and operate the business? Would this meet the $1 million requirement? The business will occupy and use the newly purchased commercial space.
Technically, real Estate investment is also “at risk”, as it can go up or down in value. So I am wondering if this qualifies.

Answers

Reza Rahbaran

Reza Rahbaran

Immigration Attorneys
Answered on

Based on the information you have provided, it may qualify as a direct investment, provided that you submit a comprehensive and effective business plan that fully satisfies the EB-5 requirements.

Salvatore Picataggio

Salvatore Picataggio

Immigration Attorneys
Answered on

It probably could, but qualified EB-5 counsel, like our law firm, should review the plan for compliance with EB-5 regulations and policies. Also, depending on the location of this business, a $500,000 investment may be all that is required.

Fredrick W Voigtmann

Fredrick W Voigtmann

Immigration Attorneys
Answered on

Yes, but you want to be careful in documenting and justifying your investment. Your business plan must be both credible and feasible for the type of business you plan to operate. Is it reasonable for such a business to purchase the commercial space, does it make sense in terms of operations (no rent, so lower overhead), or does it look like a passive, real estate investment that has no relationship to the business activity you are pursuing? As long as the purchase can be tied to making the business viable and therefore, better able to create the jobs required, you can show that all-important link between the investment, expenditure of capital, and job creation. You should consult with an experienced EB-5 immigration attorney to advise you on this matter.

A Mina Tran

A Mina Tran

Immigration Attorneys
Answered on

Yes, that would qualify as the EB-5 investment and is very common for many direct EB-5 investors.

Lynne Feldman

Lynne Feldman

Immigration Attorneys
Answered on

I would need to analyze more fully. The business must be one you can develop and direct and not be a passive investment such as buying property and hoping it goes up in value. You would also need to create ten new jobs in the business.

Ed Beshara

Ed Beshara

Immigration Attorneys
Answered on

The facts of your case seem to suggest that your personal investment will be in your own direct new business commercial enterprise. As long as the comprehensive business plan clearly states how the investment funds are going to be committed and lead to the creation of the required number of U.S. jobs you should be fine.

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