This article discusses the issues surrounding minor investors in the EB-5 Program.

An increasing number of parents from Mainland China are worried that due to the visa backlog their child will age out of the EB-5 program before their visas become available. As a result, many parents are helping their children apply as minor investors in the EB-5 Program.

In 2016, USCIS stated that minors could be primary applicants on the Form I-526 as long as they provide evidence showing that they have entered into a valid investment contract and that it is not voidable.

How can minors invest in the EB-5 Program?We have minor investors in the EB-5 Program thanks to the Uniform Transfers to Minors Act (UTMA):In the U.S., when a person enters into a contract as a minor, they can typically void the contract once they reach adulthood. This presented a major problem for minor investors in the EB-5 Program. In order to participate in the EB-5 Program and to work with EB-5 sponsors, minor investors needed a way to establish contract validity. This is where UTMA, or the Uniform Transfers to Minors Act, comes into play.What are the basics of the Uniform Transfers to Minors Act?A parent or guardian can become the custodian on the minor investor's behalf when purchasing an EB-5 investment security.This removes the issue of a minor's right to void a contract once they reach adulthood. Since the custodian entered into the contract on behalf of the minor, the minor cannot void it once they become an adult. UTMA makes it possible for custodians to give minors a valid gift of securities. It also allows the custodian to manage the investment on the minor's behalf until the minor investor reaches the age of 21.A custodian can use UTMA to purchase an EB-5 investment security and then transfer it to the minor. If a custodian does it this way, they can use their own funds and the minor will still be the legal owner. If a parent were to gift an EB-5 investment to their minor child without using UTMA, then their minor child would not qualify for the EB-5 Program visa. This is because the investment would technically have been made on the parent's behalf, whereas, using UTMA, the investment would technically have been made on the minor child's behalf.Once the minor child reaches the age of 21, then the child will fully control the custodial property.If the custodian or the minor do not reside in the U.S., then the state where the EB-5 project or custodial property is located may be used to determine if UTMA is an option.

If you would like more information about minors investing in the EB-5 Program, send us a message.