We are a real estate development company looking to raise about $3 million for an upcoming residential project in Texas. We have access to a wealthy investor from China. We understand that the process for him to get a temporary visa is rather long, about four to six months. We are trying to figure out a few things. How can he pre-invest before he receives a temporary visa, and have it still be considered legitimate towards the $1 million minimum he has to meet? What sort of management does he need to do? Will he need to relocate to Texas and be involved regularly? Does he need to be an equity investor, or can we do debt-financing? We know we''ll need a lawyer for the process, but this would help us get started.
Unfortunately there is a lot information that is needed to answer your question effectively. There is no bar in pre-investing, and that investment can be used toward the capital investment. We are happy to provide a free consult to discuss this in further detail.
First of all, four to six months is not a long time, nor is it realistic when dealing with an EB-5 case. The USCIS just announced an average processing time of 11 months for an I-526 petition. It is possible that a direct EB-5 investment petition might be processed quicker than that, but you cannot count on it. Any at risk investment into a qualifying new commercial enterprise (NCE) before the petition is submitted can be counted toward the minimum investment amount. The EB-5 law and regulations require that the investor be involved in at least policy-making decisions of the NCE. A limited partner role or a board of director''s position could qualify him. He does not need to live in the same geographic location as the NCE, nor does he have to be involved in the day to day management of the NCE. For a direct EB-5 investment, he needs to make an equity investment; no debt arrangements are allowed. And you are right; he will need an experienced EB-5 immigration attorney to represent him in his U.S. immigration matters.
Pre-investment or debt-financing without ascertaining whether an investor can secure an EB-5 visa is not particularly advisable. Also, note that E-2 is not applicable in your case, because China is not an E-2 treaty country. In fact, you need an EB-5 visa immigration attorney to sort out a couple of these facts and answer these questions, as well. Apparently, the reason for suggesting pre-investment is because of the fact that you need to get the project off ground as soon as possible. However, such a reason is usually not strong enough to grant this individual EB-5 idea any expedited processing, which would have been successful in a regional center EB-5 project. Therefore , prepare this venture for standard EB-5 processing. As an EB-5 direct investment, the investor is required to have a direct management role in terms of the policy making and day-to-day operation of the company. He will need to relocate to Texas and be involved regularly. On the issue of financial exposure, the EB-5 rule of investment applies, which means the investment fund is supposed to be "at risk," meaning the investor can lose his or her money. Thus, it appears he is likely to be an equity investor rather than someone who is advancing a loan, particularly since the real estate enterprise in question cannot be collateral for any debt-financing arrangement. All in all, if you need a complimentary discussion on some of these, feel free to consult us, but advisably an EB-5 immigration attorney is necessary as more questions need to be explored.
You ask several interesting questions that definitely require the advice and direction of an experienced EB-5 attorney. Please note, during the filing of an investor''s petition, which either shows how the investors funds have already been committed or are in the process of being invested, the investor does not have to be in the United States. In addition, the investor can be a minority owner of the U.S. business, and the investor can play a minor managerial role.
Philip H Teplen
This is many questions. It does not matter where he resides, the investment should start prior to applying for a visa, unless he is first seeking a tourist visa. I suggest a consultation, when best for you.
Based on your questions, retaining a lawyer will definitely help! You seem to be describing the E-2 treaty investor visa, but only Taiwan is a treaty country, not China proper. Your investor would be better served going right into the EB-5 program. His investment would need to be "at-risk," which would probably prohibit the investor from making a loan to the company. By sticking with the EB-5 program, he can live anywhere in the United States, but needs to have active management rights (voting on matters of the company, primarily).
This is a very good, broad question, so I will answer it as best as I can. This example/business plan may work for the EB-5 model, where the $1 million USD must be invested in the beginning, and the job creation must be met as well. You must qualify this as one that meets the requirements. How can I make this business model work for EB-5? What would I need to do? This is where a feasibility study has to be developed, and needs to ensure that you meet the requirements within your business. Given the unique nature of the business, it is best to move forward with a strategy that works for the EB-5 component, as well as the business itself. Arguments have to be made and show that it will produce new jobs within the area directly/indirectly. If the investor invests 1 million USD, and the funds arrive in the United States, it takes one year for the issuance of the conditional green card. To recap, to qualify, you will need to have the business plan and all feasibility and environmental studies as part of the materials to be reviewed by USCIS. The client will also need to complete the source of funds which, as you know, is an extensive undertaking.
Please note that the EB-5 petition (I-526) approval process is now 19 months on average, not four to six months. An investor may invest and immediately make the full $1 million or more available, or put some in escrow to be released at some appropriate bench marker. As an EB-5 investment fund is supposed to be "at risk," it is entirely up to the comfort level of the investor to put the amounts at risk per your negotiations and contract. An EB-5 investor is supposed to hold either day-to-day management of the project or just hold a policy-making position, such as being a limited partner or in board of director position.