I have $1 million dollars to make an EB-5 investment. I want to invest in a business that was founded three years ago and in which I would only own 30 percent of the shares. The other two owners will not be EB-5 investors. To qualify for the EB-5 visa, does my investment have to make me the sole owner of the company? Will it be problematic if one of the other owner/shareholders of the business is my dad who is gifting me the $1 million to invest in that business?
There is no ownership percentage required for EB-5. Investors are required to have an active management role in the company (though the level of that activity tends to be quite low). For large EB-5 projects, investors are often owning less than one percent!
There is nothing wrong with a gift of $1 million. The question is how much of the money are you investing and whether your father can provide proof that the source of the monetary gift is legal in nature. Also, an EB-5 investor is required to invest either a minimum a $500,000 or $1 million depending on the jurisdiction where the investment will take place. Further, a better analysis of the business in question needs to be done in terms of valuation of the business as well. Advisably, consult an EB-5 attorney before proceeding further with this idea.
Neither of these issues are a problem, in and of themselves.
There is no minimum amount you must own as an EB-5 investor.
An EB-5 investor does not have to be the sole owner or even the majority owner in the new commercial enterprise. In fact, the EB-5 rules do not specify any minimum percentage of ownership in the NCE. As for your dad being one of the other shareholders, this should not be problematic. Assuming you otherwise qualify for EB-5, receiving a gift from another shareholder, as long as it is done properly and well-documented, should work just fine.
No, the percentages are not what matters - will your investment amount show the creation of 10 new jobs.
No required percentage of ownership is required. You must invest the $1 million in a commercial enterprise that will result in the creation of 10 new jobs. Your dad can gift the invested funds to you, but it should be properly documented and with no promise to pay it back or secure it with assets or stock of the company shares purchased.
There is no ownership requirement for EB-5 immigrant investor processing, as long as the requisite minimum capital investment and job creation are met.
Before you make the investment, ensure you meet the job creation requirement. It is very hard with an existing business. You do not have to have control. It is easier to put $500,000 into a regional center project that has a track record.
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