Under the EB-5 program, the concept of “investing” requires that an investor place the required amount of capital “at risk for the purpose of generating a return on the capital placed at risk.” An investment made under the program requires a “risk of loss” as well as a “chance for...
Under the EB-5 program, the concept of “investing” requires that an investor place the required amount of capital “at risk for the purpose of generating a return on the capital placed at risk.” An investment made under the program requires a “risk of loss” as well as a “chance for gain”. This also means that there must not be a guaranteed return, including a guaranteed interest rate of return, promised to the investor.
Additionally, if an investor is guaranteed the right to own or use a particular asset such as real estate, then the likely present value of the guaranteed ownership or use of such asset will lower the eliminate the at risk requirements of their investment.
At risk also means that the business being invested into must be able to demonstrate that it has or will have some business activity that the investment will be utilized to carry out the investment. Funds simply placed into a bank account will not be considered at risk without a commitment to invest the funds.
Further, the “at risk” requirements for the EB-5 program must be maintained by an investor during their conditional residence period.
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