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For EB-5 investor visas: What should I know about capital?

by | Sep 17, 2020 | EB-5

Many people from overseas want to invest and establish a base in the United States. Given the many investment, education, and life opportunities available in the U.S., this is understandable. Still, there are factors that those seeking to get an EB-5 investor visa must understand and follow. A fundamental part of being allowed to invest and live in the United States is the capital being used. Many are unaware of the precise and critical definition of capital in this context.

The precise meaning of capital is key

Often, people are unaware of the different meanings of capital, especially capital allowed in EB-5. The most commonly used definition of capital is cash, but there are other forms of acceptable capital that investors should be aware of when they are investing in an EB-5 project. In addition to cash, capital also refers to other contributions a person can make in order to improve a business and its financial prospects. This can involve providing the EB-5 investment company with equipment, additional inventory, real property, the equivalent of cash, or the investor’s assets could even secure new debt. The investor must be liable for the assets and the capital is required to be fairly valued based on U.S. dollars.

Ownership is also important. By this, the EB-5 investor must show that the capital truly belongs to him or her and it was accrued legally. To show that it was lawfully acquired, the proper information must be provided including registration records of the foreign business, tax returns and all the relevant information from every aspect of the investor’s finances, evidence to show the source of the capital, and copies of any legal actions that might be in progress or completed civilly and criminally. Promissory notes can also be included with capital.

Experienced legal assistance may help EB-5 investors with understanding capital

Immigrants have helped to build the United States and many of the largest businesses in the world. Foreign investors who are trying to live the American Dream by investing in the U.S. should understand the legal processes needed to accomplish this. This goes beyond the basics of EB-5 and into the underlying considerations like capital and how it is scrutinized. Given the current political situation and how immigration is a prominent issue, it is wise to have legal assistance to navigate the complex terrain of investing in the U.S. Schedule a consult today with one of David Hirson & Partners, LLP’s EB-5 attorneys who have a history of helping people successfully navigate the EB-5 investor visa process.