capital requirements
The law requires an investor-petitioner to have invested or be in the process of investing the required capital. This requirement has several elements that require separate consideration.
Amount of Capital
Generally, the amount of required capital is a minimum $1 million (U.S.) regardless of whether the investor chooses to invest in the Direct EB-5 Investment program or the EB-5 RC program. However, the minimum amount is reduced to $500,000 where the investment is made in “targeted employment areas,” which are either rural areas or areas which experience unemployment of at least 150 percent of the national average.
A “rural area” is an area not within either a metropolitan statistical area or the outer boundary of any city or town having a population of 20,000 or more.
Equity Capital
An investor is deemed to “invest” where he/she to contributes equity capital to the commercial enterprise. Loans of capital by the investor to the commercial enterprise do not qualify as an investment. The investor cannot receive any bond, note, or other debt arrangement from the commercial enterprise in exchange for the contribution of capital. This includes any stock redeemable at the holder’s request. Provision for guaranteed returns and redemptions have been classified by the USCIS as impermissible debt arrangements. Also, the petitioner’s personal guarantee of a loan that is the primary obligation of the commercial enterprise does not constitute an equity investment of capital by the petitioner.
Amount of Capital
Generally, the amount of required capital is a minimum $1 million (U.S.) regardless of whether the investor chooses to invest in the Direct EB-5 Investment program or the EB-5 RC program. However, the minimum amount is reduced to $500,000 where the investment is made in “targeted employment areas,” which are either rural areas or areas which experience unemployment of at least 150 percent of the national average.
A “rural area” is an area not within either a metropolitan statistical area or the outer boundary of any city or town having a population of 20,000 or more.
Equity Capital
An investor is deemed to “invest” where he/she to contributes equity capital to the commercial enterprise. Loans of capital by the investor to the commercial enterprise do not qualify as an investment. The investor cannot receive any bond, note, or other debt arrangement from the commercial enterprise in exchange for the contribution of capital. This includes any stock redeemable at the holder’s request. Provision for guaranteed returns and redemptions have been classified by the USCIS as impermissible debt arrangements. Also, the petitioner’s personal guarantee of a loan that is the primary obligation of the commercial enterprise does not constitute an equity investment of capital by the petitioner.