How can I receive dividends and maintain compliance with EB-5?

After you make your EB-5 investment you can receive distributions from the business. However, you must keep your $500,000 invested in the EB-5 new commercial enterprise.

Whether you can receive dividends or not depends on the subscription agreement. However, it is very rare to receive a dividend at the part of an investment such as EB-5, considering the fact that the business in which the fund is invested is at its early stage. Advisably, prior to entering any investment agreement, consult an EB-5 attorney and other professionals for further analysis of your investment objectives.

You can certainly receive "dividends" while the EB-5 application is being processed. But make sure that what you are receiving is "dividends" and not "interest". Lending funds, buying notes and bonds are not eligible investments for EB-5. Common and preferred stock that distribute dividends are.

So long as the dividends are from actual profits and not a return of investment capital, it may be possible. In other words, return on investment is not illegal, but return of investment is.

You are permitted to get dividends, provided you have already invested the requisite amount.

As a shareholder of the business you can receive dividends through the K form that is prepared by the company to submit with the tax return to IRS. You can collect these dividends while your investment is at-risk in the EB-5 project.

You can receive dividends from profits generated by the business but not from EB-5 capital invested into the business for EB-5 job-creation purposes.

Receiving dividends from an EB-5 investment does not affect the "at-risk" requirement of EB-5 processing; however, you cannot just be a passive investor in the business for the EB-5 purposes. You need to either be involved in the day-to-day operations of the business or in policy formation of the company/business.

It looks like two issues: using the returns from one investment to fund the EB-5 investment, and can the EB-5 investment itself pay dividends. EB-5 investors usually do receive some kind of a return on their investment during the entire period the funds are invested (or at least until the EB-5 loan is repaid). Some projects hold it and make a final lump sum payment. Depends on the project. Using returns on an earlier investment to pay for an EB-5 investment may be possible, depending on the documentation. Funds used for EB-5 need to be "personal" immediately preceding the EB-5 investment.

As long as you maintain your minimum investment of $500,000 and the funds are "at-risk," there would be no reason why you could not receive dividends from the business every month until you receive your lawful permanent residency on a conditional basis. You only have to keep your $500,000 investment at-risk.

There is no prohibition as to receiving a salary or if there are profits from obtaining lawful dividends. However, the government wants to see the full amount deployed into a job-creation role, so make sure you can prove the $500,000 was fully deployed into job creation.

Dividends can be paid out of profits at any time.

As long as the business has profits from which to issue dividends, as opposed to pay dividends out of your investment capital, it is OK.

Regarding your question about a potential investment in a business as the basis of an investment to apply for EB-5, and whether you can receive dividends every month from the business before you receive a permanent green card, the short answer is yes, absolutely! By definition, a dividend is a distribution of a portion of the company&#39s earnings among its shareholders. Companies distribute a dividend in the form of a periodic payment (monthly, quarterly, etc.) paid to shareholders for each share owned to provide investors with a stream of income. In order to receive the dividend, you must have the shares of the company before it declares a dividend. The payment of dividends is never deemed a return of equity or a guarantee of a return on investment because a dividend should not be declared unless profit is earned.

If the business is making money and creating jobs, there is nothing prohibiting the investors from getting a return on their investment. Putting the money at-risk does not mean you have to lose money or no earnings. In fact, the very definition of putting at-risk mean you could make or lose on the money you invested. There must be nothing in your agreements that specifies that you are guaranteed certain a return or dividend, however.

You can realize income from your EB-5 investment, but you should not withdraw your original investment funds.

I am not aware of any rule prohibiting receipt of dividends.