Does the investment for an EB-5 visa have to be all in cash?

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Question:

I’m thinking of pursuing an investment-based green card, which I understand will require me to invest $1 million in a U.S. business. Do I have to pay all cash when investing in the business?

Answer:

No, for an investment-based green card (category EB-5) the entire $1 million investment (which can be as low as $500,000 if you invest in an area of high unemployment) does not have to be made solely in cash. However, the investment must be an equity investment (ownership share), rather than an unsecured loan. Also, you must place your investment at risk of partial or total loss if the business does badly.

Cash equivalents, such as certificates of deposits, securitized loans, and promissory notes, can all be counted in the $1 million total. So can the value of any equipment, inventory, or other tangible property that you put into the business. (See the Code of Federal Regulations at 8 C.F.R. § 204.6(e).)

What’s more, you may use borrowed funds for the investment so long as you remain personally liable in the event of a default (nonpayment or other violation of the loan terms), and the loan is adequately secured (and not by assets of the business being purchased). This means that any mortgages on the business assets will disqualify the amount borrowed from being calculated in the total investment figure.

For more about investor visas, see “EB-5 Investor Visa: Who Qualifies?

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