dip your toe

If your original E2 investment has grown to a value that would qualify, after CGT, for an EB5, can you apply for an EB5 whilst maintaining an E2 status and sell the business back to yourself by setting up a new coporation to purchase the original E2 business?

Folinskyinla

Hi:

Maybe yes, maybe no. This is presuming that the investment was in a NEW business which created 10 jobs.

I have a gut feeling that the "straw" transaction you are talking about would make a difference -- and in fact might hurt because of the "new" requirement.

I'm a lawyer but I'm not YOUR lawyer. And I now avoid EB-5's like the plague.

I've mentioned this elsewhere that I was once involved in a case where the E-2 investments was in an ongoing business and did not create a single new job. However, the investment then started losing money hand over fist -- so as to become a "distressed business." There is a quirk in the regulations that look at the amount invested at the time made but the determination of stress is as of the time the petition is filed. The DAO and I had a chuckle on how stupid the regulation was.

Please note that CIS has a strange habit these days of ignoring the law as part of the "Just say 'no'" attitude which is strong these days.

dip your toe

Thanks for the reply. Our current E2 investment has two locations with an approx joint value of just over two million. A new renewal is currently in progress. We are researching into the idea of selling one location and re-investing through an EB5 visa into a business in the same field with a value of over 1 million. A brand new start up facility built from the ground up. The theory being that we will still maintain an E2 status on the unsold location whilst we got the new business on the EB5 up and running.

Would be interested to know why you avoid EB5's like the plague. I would be reluctant to invest in an EB5 if I didn't have control of the project.

Folinskyinla

Hi:

Liability.

dip your toe

For some reason that made me smile.

Does anyone know if you can apply for an EB5 whilst maintaining E2 staus? and if you can, and the EB5 is granted do you have to relinquish your E2 status? In my proposed scenario if the EB5 was granted and the E2 had to be relinquished would I be able to transfer the second location to EB5 status? With our without paying CGT?

Or am I, not for the first time, barking up the wrong tree?

Folinskyinla

Hi:

In regards to my old firm [not me personally] -- been there done that.

karel

I think the biggest issue is that for E-2 visa you have to prove that you are intending to return back home. So it directly contradicts with EB-5 visa.

What if E-2 is held in husband name and wife applies for EB-5 visa through the investment. Did anyone tried that? It seems as the least risky way to proceed.

Folinskyinla

Hi:

The "E" non-immigrant classification is one of the few that does NOT contain an express requirement of a home abroad with no intent of abandonment. So, the intent to return home is quite attenuated.

The old fashioned "dual intent" argument would apply in this case. [BTW, this argument was fashioned in the days before the current 214(b) which is mistakenly called "dual intent" as to H & L visas. And yes, I know that many lawyers use that term. But I remember the context in which 214(b) was amended -- it simply obviated the need for "dual intent" for H & L. But it still exists for E's inasmuch as there is no time limit on E's.