EB-5 Immigrant Investor and LLC structuring

The EB-5 Immigrant Investor Program requires a minimum investment of $1,050,000 (or $800,000 in a Targeted Employment Area) in a new commercial enterprise that creates at least 10 full-time jobs. Regional center investments typically use a limited partnership or LLC structure where the investor becomes a limited partner or member. The LLC serves as the vehicle that pools investor capital and deploys it to job-creating projects.

Before you receive your conditional green card, you may still be a nonresident alien for tax purposes. During this phase, only U.S.-sourced income is taxable. Any returns from your EB-5 LLC investment that constitute U.S.-sourced income, such as interest, dividends, or business income, would be reportable. If the LLC passes through income to you as a member, that income may be subject to withholding under the rules for foreign partners in U.S. partnerships.

Once you receive your conditional green card, you become a U.S. tax resident and must report worldwide income. This is a major shift from the nonresident status. All income from any source globally must be reported on Form 1040. Your share of LLC income or losses from the EB-5 investment will be reported on Schedule K-1 and transferred to your personal return. You must also report all foreign financial accounts and assets.

As a new green card holder, you must file FBAR (FinCEN 114) if you have foreign financial accounts with an aggregate value exceeding $10,000 at any point during the year. You must also file Form 8938 if your foreign financial assets exceed the applicable threshold. Failure to file these forms carries severe penalties. Begin tracking your foreign accounts and assets immediately upon receiving your green card.

Before immigrating, consider pre-immigration tax planning strategies. Selling appreciated assets before becoming a U.S. tax resident can avoid U.S. capital gains tax on pre-immigration gains. Review your worldwide asset portfolio and consider the impact of U.S. estate and gift tax rules, which apply to green card holders. Work with a tax professional who specializes in international tax planning to optimize your financial position before and after immigration.