All Forum Posts by: Mark Fulop

Starting a business in the U.S. as a Foreign National can be challenging but I can walk you through the process. Currently, I have a Canadian client who wants to buy a hotel in the USA. Normally if a client already owns a flagged hotel it would be some what easy to provide funding to buy an additional location. The client would need 10% down, 2 years experience in the industry, and a credit score of at least 650. Unfortunately, this client only owns hotels in Canada. My client wants to buy a new location in Ohio and live in one of the Hotel Units while managing the location. In this case as with most foreign nationals when buying in the USA the L.T.V's tends to be a little lower. Unfortunately, since this client has no US tax returns, US credit score, and owns no properties in the USA. The deal becomes more challenging due to the lack of a US foot print. We have funded other foreign national scenario's in the past which required more of a down payment than normal. Example: Hotel Purchase for $2,000,000 FL (20-25% down. 5-6% 15-30 am) 75-80 ltv. (L.T.V is slightly lower for foreign nationals) Unless the buyer has some sort of foot print already established in the USA.

Being non US citizen doesn't preclude anyone from getting capital, although banks may enforce more stringent eligibility requirements.

Aside from US citizens or natural citizens, clients with the following immigration status can start a business in this country.

• Green card Holders
• EB- Investor green Cards
• Other Immigrant and Non Immigrant Visas

After attaining a green card you would take the same steps that any US citizen would take when applying for a business loan.

How to structure your US Business? When applying for a sole proprietorship, L.L.C, Corporation, partnership, or S Corporation. I feel its important to understand and attain advice about the ownership status and tax ramifications of your chosen entity.

How to Attain a US Bank Account? One of the first things i request all my Foreign national clients to do is attain a tax ID Number and a government issued document bearing a photograph. In order to start a business bank account he or she will have to also provide their articles of incorporation, US Business address, etc. Finally, this is how a new business owner would establish a business bank account.

Next step is to speak to a tax practitioner who understands business tax law. Business tax Filing and payments. All non resident aliens must file and pay state and federal taxes on business income. You will be taxed at regular US corporate rates but only on income from US sources that is connected with that business, and at 30% on income not connected with that business. It all depends on the extent of the non US person's presence in the US. The US Tax system is complicated so please consult with an expert.

Depending on what type of business, you may also be obligated to pay sales tax, self- employment, social security, and medicare taxes, make estimated tax payments, pay duties, etc

E.I.N Number. Earlier, I mentioned that in order to open a business account you need a tax id number. All US business require an employer identification number (E.I.N) from the IRS to support tax filling and reporting. This ID identifies the business entity . Its basically the equivalent of a business social security number.

Getting access to financing? Most foreign nationals who purchase, refinance, or start a business in the US. Normally choose to hire an experienced commercial mortgage broker to process and underwrite the loan.

Are you a foreign national or US citizen currently purchasing a property in the USA? If so I can help you fully understand the process of applying for a EB 5 Visa as well as the lender's underwriting process.

If you are an investor looking for great investment opportunities offering multiple additional benefits, you may want to take a look at the EB-5 program offered by the United States. This program was created by the U.S. Congress in 1990 after the Immigration and Nationality Act was passed. It offers an opportunity to foreign investors to invest in the United States and fast track their application for a U.S. green card and citizenship.

Foreign investors have the option of directly investing either $1 million to create 10 direct full-time jobs for Americans, or just $500,000 in a Targeted Employment Area (TEA) through a regional center and create 10 direct or indirect full-time jobs.

How Does the EB-5 Green Card Benefit Foreign Investors?

The EB5 program spurs the U.S. economy by creating jobs throughout USA. For the foreign investors, it offers multiple significant benefits, like:

• Get a U.S. Green Card without waiting
• Fast track naturalization process that leads to U.S. citizenship after just 5 years
• Travel in and out of the United States without visa restrictions
• No sponsorship requirement
• The investor, spouse and all children under the age of 21 are eligible for U.S. Green Card
• Freedom to live in any part of the United States
• The investor and family enjoys all rights and benefits imparted to U.S. citizens

Since there is no waiting list for getting EB-5 Green Card, the moment the investor is approved by the United States Citizenship and Immigration Services (USCIS), the investor and the immediate family receive the Green Card, allowing them access to all services that any US citizen is eligible for.

Requirements for EB-5 Investment Visa

The immigrant investor necessarily has to invest capital to start a for-profit business in the United States. Depending on the type of investment project the investor participates in, the minimum capital investment can be $1 million or just $500,000.

If the investor wants to start a business as an individual, he or she needs to invest $1 million and ensure the investment creates 10 direct, full-time jobs for Americans. Here, indirect jobs created by setting up the business are not taken into consideration.

On the other hand, investors can approach a regional center approved by the U.S. government and be a part of the investment opportunities the center has. In this case, the immigrant investor has to invest $500,000 in a Targeted Employment Area. This is an area where the unemployment rate is high; the rate has to be at least 150 percent of the national average and the area should have a minimum population of 20,000. The investment again needs to create 10 full-time jobs for Americans, but here they can be direct or indirect jobs.

EB-5 Visa Quota

The U.S. government has an annual quota of 140,000 employment visas. Out of these, 7.1 percent visas are kept for the EB-5 program. This means there are approximately 10,000 visas reserved for immigrant investors annually. This number also takes into account visas issued to spouses and unmarried children under the age of 21.

There is a further quota country-wise. Each country within the EB-5 category is allowed 7 percent of the total annual visa. This roughly translates to 700 visas per country. This quota is imposed when the demand for visa is high. Currently, this is not the case.

What are Regional Centers?

Under the EB-5 program, there are private, public and public-private organizations that are approved and authorized by the U.S. government to accept investments for certain industries. These organizations are known as regional centers. These centers offer ready-made opportunities to invest. They take away the stresses of meeting the requirements of the EB-5 program.

Investing through a regional center is ideal for those immigrant investors, who want to acquire U.S. green card without expecting high return on their investment. Investors do not have the responsibility to manage or handle their investment and this is what makes it so attractive. Today, nearly 90 percent of the EB-5 applicants invest their capital via regional centers.

Requirements for Creating Jobs under the EB-5 immigrant investor program

Whether the foreign investor decides to invest as an individual or through a regional center, there are certain job creation requirements that the investor has to fulfill to be eligible for the EB-5 visa.

The first step is determining whether the foreign investor has the capital investment to invest within the United States. Thereafter, the investor either comes up with a business plan to invest and create 10 full time jobs or chooses a regional center to look at the investment opportunities. Usually, investors opt for regional centers, as it is a less burdensome process. After depositing the minimum capital investment into escrow, the investor fills out an I-526 petition to submit to the USCIS. After obtaining conditional permanent residency, the investor has 2 years to create a minimum of 10 full-time jobs for American workers.

What is the Process for the EB-5 Investor Visa Application?

There are three basic steps in the EB-5 investor visa application process.

• Fill and submit the I-526 application to the USCIS to show the investor has made an EB-5 investment. This investment can be in an individual capacity or through an approved regional center.
• After the I-526 application is approved by the USCIS, the investor then files the I-485 or DS-230 application. This application is to get conditional permanent resident approval, thereby letting the investor and immediate family get U.S. Green Card.
• After 2 years, when the foreign investor meets the EB-5 requirements, he or she has to file the I-829 application to remove the conditions of residency. This allows the investor, spouse and unmarried children under 21 to receive 10-year U.S. Green Cards and paves way for filing an application for citizenship after 5 years.

The E-2 Investor Visa allows an individual to enter and work inside of the United States based on an investment he or she will be controlling, while inside the United States. This visa must generally be renewed every two years, but there is no limit to how many times one can renew. The investment must be "substantial." Investor visas are available only to citizens of certain countries.[a][1] E-2 visas are also available to non-investor employees of the business, as long as the persons are of the same nationality as the investor and are destined for a role in the US business that is either executive/supervisory or requires specialized skills that are essential to the efficient operation of the US enterprise. [2]

For new startups, the investment must be large enough to start and operate the business. The amount of investment varies on the type of business. The investment will not be considered substantial if it is not large enough to capitalize the venture. The USCIS will use an ‘Inverted Sliding Scale’ to determine whether the investment is substantial in proportion to the overall cost of the enterprise.

Upon conclusion of the business, investors must return to their countries of origin, or change their status. The holder of an E-2 visa may leave the United States at any time.

Ronald Depano

Ronald Depano 

If you are buying a residential or commercial investment property

1-4 apartment or 5 unit and up  under 1m you need 25% down

If you have a 650 or better fico and good tax returns you can qualify for a full

doc loans with a rate of 4-5% fixed for 5 years 25-30 am 75ltv

If you have poor tax returns or no tax returns we can provide a no doc loan

6-8% fixed fro 3-5 years 25-30 am 75ltv

100k to 5m

If you are buying an apartment building over 1m you will need 20%

I have one fix and flip program that may interest you

I would be open to speaking with you.

Did you sign a purchase agreement yet?

I get a lot of calls for people who want to borrow the down payment and attain a commercial or residential oan.

It is best to find a partner who can put up the down payment. Then form an LLC with that person

and attain a loan together. If you borrowed the down payment then borrowed the rest that would be 100% funding. In some cases if a partner is less that 20% owner they dont have to be on the mortgage or title but still have to be on the LLC with you..

So to answer your questions no you cant get a pool of investors to produce the down payment

then get a loan by yourself.  I would suggest start off small with buying a 1-4 unit or 5 unit.

Partner with someone and attain a mortgage together under an llc. Furthermore, if the partner does not want to be on the mortgage or title have them retain 20% or less ownership.

Then after 3-5 years refinance and buy your partner out. Then you will be in your way to growing

a portfolio,

Also you have to realize that you need at least a 650 fico with most lenders.

If you are buying an apartment building under 1m

4-5% fixed for 5 years 25-30 am 75ltv     2 years tax returns   650 fico

1m to 3m

4%'s fixed for 10 years 25-30 am 80ltv   2 years tax returns   650 fico

3m and up

3.55 fixed for 35 years   10% down    90ltv    2 years tax returns   650 fico

If you are buying with no tax returns or poor tax returns and have a 650 fico you will need the following to purchase.   100k to 5m   No Doc Loans

25% down   Residential and commercial Investment properties

6-8% fixed for 3-5 years (fixed)  adjustable  25-30 am  75ltv      pre pay 321 or 54321

In some cases for both a full doc and no doc loan the lender will accept a 5% seller second.

No you cant have the seller hold back 20-25% in the form of a seller second. Once again that would be 100% funding which does not exist.

In addition its not just the down payment that you need. In order to purchase an investment property you need down payment, 6 months carrying costs, closing costs. (Can range from 2500 to 6k depending on type of funding. Lender will want to see that you can show proof of down payment,

closings costs, and 6 months carrying costs.

Feel free to call or email when you have your ducks in a row.