Questions & Answers

How can an EB-5 petitioner use his business as an investment source?

If a potential EB-5 petitioner owns a business/corporation, can that business invest in a New Commercial Enterprise on his behalf? Or, alternatively, can that business loan him funds to invest in an NCE for an EB-5 petition? How can an EB-5 petitioner use his business as an investment source?

Answers

• Julia Roussinova

  Immigration Attorney

  Answered on April 24, 2015

  An EB-5 investment must be a personal investment from an EB-5 investor. Your foreign business entity cannot invest on your behalf because it is a legal entity separate from you, an individual EB-5 investor. Your business entity may loan the business funds to you (member or shareholder loan) which must be properly documented and then you could invest the funds under the EB-5 program either through a direct EB-5 investment or through a project within an approved regional center in the United States. You should consult an experienced EB-5 immigration attorney for further details.

• Fredrick W Voigtmann

  Immigration Attorney

  Answered on April 3, 2015

  EB-5 requires a personal investment. Therefore, funds invested by a company, even one wholly-owned by the petitioner, will not count for EB-5 purposes. The business could loan the funds to the petitioner (shareholder's loan) and then the petitioner could invest in an NCE.

• Kyle Barella

  Immigration Attorney

  Answered on April 2, 2015

  The individual investor must make the actual EB-5 investment. Loans for EB-5 investments are allowed provided they are secured on collateral. I recommend contacting an EB-5 attorney for a more detailed explanation.

• John J Downey

  Immigration Attorney

  Answered on April 1, 2015

  An investor can use proceeds he received from an existing business to invest in an NCE. Receiving a loan from the business can be troublesome as the funds are not from the investor directly. Seek advice before entering into a loan agreement.

• Nicholas Lowry

  Immigration Attorney

  Answered on April 1, 2015

  In response to your question, no, the business may not invest in the New Commercial Enterprise on your behalf; the EB-5 rules require that you make the investment in the New Commercial Enterprise yourself. You may, however, have your business loan you funds which you then invest in the NCE. If you use this method, USCIS will expect to see documentation (like Board meeting minutes) showing that the business has followed appropriate procedures in authorizing the loan. It would also be a good idea to have a detailed loan agreement, signed by both yourself and the appropriate person at the business, showing the terms of the loan (such as the amount of the loan and when the loan needs to be repaid).

• Robert Lee

  Immigration Attorney

  Answered on April 1, 2015

  Best way is to issue a shareholder's loan or owner's draw from the company. Use the retained earnings owed to the investor or equity in company to secure the loan. This way the loan is ok for the EB-5 investment. Loans are generally not allowed for investment, unless there are real, tangible assets used as collateral for the loan. This avoids dividend tax because the payout is not a dividend but classified as a loan.

• J Bruce Weinman

  Immigration Attorney

  Answered on April 1, 2015

  The business is a separate entity and cannot make an investment on your behalf. But yes, the business can loan you money so that you can invest it into the NCE, as long as it is a bona fide loan. But, if you have a business, why not use it as the NCE? You might be in a TEA. How much money have you invested into the business? When was it established? How many jobs have you created? How much of it do you own? Do you manage it? Sit down with an experienced immigration lawyer.

• Stephen Berman

  Immigration Attorney

  Answered on April 1, 2015

  He can liquidate the business and use the proceeds to do his new investment.

• Salvatore Picataggio

  Immigration Attorney

  Answered on April 1, 2015

  EB-5 investors can use loans, dividends, or salary from his or her company for the investment, but the company cannot make the investment for the investor. Please retain EB-5 counsel to assist with the authentication of the source of funds.