The Definition of “Capital” in EB-5 program

        The word “capital” in the EB-5 Program does not mean only cash. Instead, the word “capital” is defined broadly in the regulations to take into account the many different ways in which an individual can make a contribution of financial value to a business. The regulation defines “capital” as follows: 
 
  • First, the definition of “capital” is sufficiently broad that it includes not only such things of value as cash, equipment, and other tangible property, but it can also include the immigrant investor’s promise to pay (a promissory note), as long as the promise is secured by assets the immigrant investor owns, the immigrant investor is liable for the debt, and the assets of the immigrant investor do not for this purpose include assets of the company in which the immigrant is investing. 
  • Second, all of the capital must be valued at fair market value in United States dollars. To qualify as capital for EB-5 purposes, “nearly all of the money due under a promissory note must be payable within two years, without provisions for extensions.” 
  • Third, the immigrant investor must establish that he or she is the legal owner of the capital invested. 
  • Fourth, any assets acquired directly or indirectly by unlawful means, such as criminal activity, will not be considered capital. The immigrant investor must demonstrate by a preponderance of the evidence that the capital was obtained through lawful means. 

This article is for background purposes only and is not intended as legal advice or legal document. Please contact a professional immigration attorney for legal consultation and service.