IZUMMI
22 I. & N. Dec. 169 · Board of Immigration Appeals · 1998
Facts
Petitioner sought classification as an alien entrepreneur based on an investment in American Export Limited Partnership (AELP), a regional center located in Charleston, South Carolina. AELP established a subsidiary credit company that made asset-based loans and receivables financing for small export companies. The petitioner's capital contribution to AELP was used to purchase stock in this credit company, which then extended or purchased four loans to companies located in Georgia. None of these loan recipient companies were shown to be in targeted employment areas or within the regional center's geographical limits. The petitioner's $500,000 investment was structured as a promissory note, including an initial $120,000 deposit, five annual $18,000 payments, and a final $290,000 balloon payment. The annual payments were offset by guaranteed annual distributions from AELP, and the investment agreement included a "sell option" allowing the petitioner to require AELP to repurchase his interest after six years for $290,000 plus profits. The petitioner failed to document the source of his funds or how his promissory note was adequately secured.
Procedural history
The preference visa petition was initially denied by the Director, Texas Service Center. The Director then certified the decision to the Associate Commissioner for Examinations for review. The Associate Commissioner for Examinations affirmed the Director's decision.
Issue
Did the petitioner's investment in American Export Limited Partnership (AELP) qualify as a "capital investment" under the Immigrant Investor Pilot Program, satisfying the requirements for capital at risk, job creation within a regional center, establishment of a new commercial enterprise, and lawful source of funds? Can a petitioner make material changes to a deficient petition after filing to conform to Service requirements?
Holding
The court affirmed the director's decision, denying the petitioner's visa petition. The petitioner failed to demonstrate a qualifying investment, establish a new commercial enterprise, or meet the employment-creation requirements, and material changes to the partnership agreement made after filing could not be considered.
Rule
Capital must be placed at risk for generating a return, and contributions in exchange for debt arrangements are not capital. Guaranteed annual distributions offsetting payment obligations or redemption agreements guaranteeing repayment of capital remove the "at risk" element. Reserve funds not available for job creation are not considered capital at risk. Promissory notes must be adequately secured, valued at fair market value, and nearly all money due must be payable within two years without extensions. If a new commercial enterprise lends money to job-creating businesses, those businesses must be located within the geographic limits of the regional center. Eligibility must be established at the time of filing; material changes to a deficient petition cannot be made after filing. A petitioner must have had a hand in the actual creation of an original business or significantly restructure/expand an existing one. Each petitioning investor must create at least ten full-time positions for qualifying employees, and the lawful source of funds must be documented.
Read the full opinion on CourtListener
Case brief last reviewed . Prepared by CaseReader from the published opinion.