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How can I use crowdfunded capital in my EB-5 application?

What are the requirements of USCIS on EB-5 capital from crowdfunding? I have a business plan and want to implement it with crowdfunded money. I also plan to use this business to support my EB-5 application. What documents do I need to prove the lawful source of funds?

Answers

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    It can be done but it is fraught with legal issues that, unless done properly, may be deemed unacceptable or in the end is virtually unachievable. By the way, crowdfunding is largely used by startups to supplement their financing. It is not used as the only form of financing. In addition, even if you go through EB-5 financing for your project (or startup), you have to comply with at least two main EB-5 requirements. First, you must raise the mandatory minimum amount of either $500,000 if your business is located in the targeted employment area (TEA) or $1 million in non-rural area. Beginning from Nov. 21, 2019, these two minimum amounts will go up from $500,000 to $900,000 and $1 million to $1.8 million, respectively. Furthermore, the second EB-5 requirement which you must comply with is that with each investment amount you raised, you must create at least 10 jobs. Advisably, contact an attorney for appropriate planning and analysis of the legal implications before proceeding.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    Crowdfunding might be difficult, as you need to prove that these are your own personal funds being invested.

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    Marko Issever

    EB-5 Broker Dealer
    Answered on

    Whose crowdfunding money are you talking about? If the money belongs to third parties who invested in your crowdfunding venture, then you cannot use those funds. EB-5 capital has to be either your money or money you borrow on a collateralized basis. If the funds you are talking about were earned from crowdfunding investments you made, then as long as you could trace all your earnings and properly document them you should be fine. I think you need to provide more details on your question to obtain a proper answer. Please do not proceed before speaking with a professional.

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    Daniel A Zeft

    Immigration Attorney
    Answered on

    USCIS does not have a rule on this specific issue.

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    Stephen Berman

    Immigration Attorney
    Answered on

    If you have the money and you explain who gave it to you and why, it should be fine.

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    Phuong Le

    Immigration Attorney
    Answered on

    It would probably be easier to use crowdfunding as a portion of your non-EB-5 funding (versus using it as your EB-5 funds itself). Otherwise, good luck explaining lawful source of funds from a stream of micro transactions to USCIS.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    I do not think your plan will work with EB-5.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    Crowdfunding may be difficult, as you have to go to the source of the crowdfunding to show lawfully earned but may not be impossible.

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    Charles Foster

    Immigration Attorney
    Answered on

    Using crowdfunding as part of your EB-5 investor I-526 petition can be complex. In terms of source of funds, you must show that these funds were effectively gifted to you in an unrestricted manner for the purposes of investing in an enterprise that is EB-5 compliant. You would have to establish that the conditions upon which these funds were transferred to you, and perhaps their source of lawful funds as well.

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