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Can I sell my company through the EB-5 Program?

I’m the owner of a landscape design build company. The company has several different divisions one of which is a wholesale materials distribution company. I have been approached by a foreign investor to possibly purchase that company under the EB-5 Program. We will need to hire a firm to help with the filings and the structure of the company. I have several questions at this time that maybe you would be able to help me with. The company being sold was formed in 1999 and currently has 5 employees and it is a Sub Chapter – S. Can I sell 50% of the company for 1 million with the intention to expand it to 15 employees over the next 2 years? Does all the money need to go back into the company? Can just part of the money go back into the operations or none of it as long as 10 new jobs are created? In addition, I’d like to start a second company in a different location as a limited partnership and I’d like the investor to own 50% as a limited partner, the employees to own 25% and I would own 25% as the general partner. Again we would create 10 or more new jobs within 2 years. The employee’s shares would not vest until after 2 years if they earned it. If an employee has some ownership even though he is paid with a W2 would he count as one of the 10 new employees? Lastly what are your firm''s fees that would be involved in setting this up and getting all the needed documentation handled with the USCIS? I’m looking forward to your answer and comments.

Answers

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    Roberto Ortiz

    Immigration Attorney
    Answered on

    The monies invested by the foreign investor have to go into the business because after 2 years the foreign investor has to demonstrate to USCIS that the money he invested created 10 new jobs. In reference to the other questions, I would prefer to discuss in person or over the phone. Please contact me at your earliest convenience.

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    Shahzad Q Qadri

    RC Creator
    Answered on

    Simple answer is yes you can. The questions you ask will require in depth conversation an analysis. Our fees would be in the range of $20-$25k plus filing fees. Please feel free to call me.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Yes, you can. There may be certain adverse federal tax implications for your Subchapter S corporation if it has a foreign shareholder. I recommend that you schedule a consultation with an EB-5 immigration attorney. Please do not hesitate to call our office should you need a consultation. We are also qualified to provide federal tax advice.

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    Lei Jiang

    Immigration Attorney
    Answered on

    For all these detailed questions, you need to consult with EB-5 immigration lawyer. Basically, foreign investors can invest in your company. Depending on the location of your company, the law may require $1 million instead of $500,000. Moreover, your company has to generate 10 additional job for each investor.

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    Michael E Piston

    Immigration Attorney
    Answered on

    Yes, you can sell 50% of the company for $1 million with the intention of expanding it to 15 employees over the next 2 years. You do not have to put the money back into your company. You can do anything you want with it. It will be your money. As long as the many passes fully out of the control of the investor in connection with his investment in the company, it is "at risk" and therefore counts as an investment. Some or none of the money can go into operations so long as 10 new jobs are created. You can pay vested employees through W2s so long as the employee doesn''t actually control the company. Our fee to handle the immigration aspect of the case for the investor only would be $25,000.

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    Ed Beshara

    Immigration Attorney
    Answered on

    There are a number of excellent questions relating to an in depth EB-5 analysis.I would prefer to have a one on one consultation with you to discuss and strategize about the best options to pursue and in what timeline.The fees and costs will be competitive but based upon anticipated time, experience and expertise.

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    Clem Turner

    Securities Attorney
    Answered on

    The EB-5 regulations require that the investment be made in a new commercial enterprise. As a corporate and securities lawyer, I will defer to the immigration lawyers as to whether or not this plan would qualify. If not, it may be possible to have the EB-5 Investors fund a new company, and then merge that company into yours, with yours surviving and you retaining 50% of the surviving entity. I would need further specifics from you to really outline the structure and mechanics. Such information is beyond the scope of this forum. Regarding your second company, which I assume would be with a different EB-5 Investor than the first, an Employee Stock Option Plan will not change the classification of your employees. The job creation should still count from a USCIS perspective, if they are otherwise legitimate employees. Regarding some of your other questions, regarding flow of funds and fees, I would need more information to provide you with an accurate assessment. Feel free to reach out should you want to have a more detailed conversation.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    Your business plans have merits under EB-5 program. All of the investment must be invested into the business and be utilized to create jobs within 2 years after your investor gets his temporary green card. All the jobs must be direct jobs and the investor must hold an active role of managing the company or has some policy making role with you. I do not discuss my fees over the internet as each case is different, but most immigration lawyers doing I-526 (EB-5) work charge $15,000 - $25,000.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Your inquiry poses a lot of complex questions that do not lend themselves easily to email answers. Perhaps you should schedule an in person or over the phone consultation.

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    Daniel P Hanlon

    Immigration Attorney
    Answered on

    I recommend that you contact us directly to consult regarding your EB-5 questions.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    Yes, if it is structured correctly. Employee investor does not count as one of the 10. Yes, you can "restructure and reorganize" the company, such that 10 new jobs are created. However, it is more difficult than it looks. The emphasis is on creating 10 new jobs. We would be pleased to help. Please email to discuss this further, and to quote fees.

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