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Do I need to create 10 new jobs at my new enterprise to qualify for an EB-5 visa?

I purchased a business that had been created in 2003. I paid $1,000,000. At the time of purchase, the company had 27 employees. Based on what the USCIS''s webpage says, it qualifies for a "new business". But do I need to create 10 additional new jobs or are the 27 jobs currently in the company enough? Also, I could not transfer money from my personal bank account in my country, so I used my company''s bank account (I am 40% owner) to place funds into my company''s bank account in the U.S. I am the 100% owner of the U.S. company. Is that OK to show that the funds are my personal funds where my country has annual money transfer limit?

Answers

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    If the investment only sustains current employees but does not create new full-time jobs, it does not meet the EB-5 jobs requirement unless the investment is ''troubled business.'' Thus, you must create 10 new jobs. Since you were only a minority owner (40%) of your business, you will need to show that you had the authorization to make such transfer and the investment was made by you only not the business. This matter will require more detailed consultation with a qualified EB-5 attorney than just this blog.

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    Michael A Harris

    Immigration Attorney
    Answered on

    Yes you may need to create 10 new jobs above the threshold of what it had when you purchased it. If the business is a ''troubled business'' then you would need to maintain the number of jobs as existed when you made your investment. But your transfer of company funds to your U.S. investment sounds troubling. I would speak with a qualified immigration attorney who focuses in the EB-5 program.

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    James Stuber

    Immigration Attorney
    Answered on

    The regulations provide that each individual investment must result in the creation of at least ten full-time positions for qualifying employees. The exception is for a troubled business, defined to mean a business that has been in existence for at least two years, has incurred a net loss for accounting purposes (determined on the basis of generally accepted accounting principles) during the twelve or twenty-four month period prior to the priority date on the alien entrepreneur''s Form I-526, and the loss for such period is at least equal to twenty per cent of the troubled business''s net worth prior to such loss. [8 CFR 204.6(e)(2)] Then it is sufficient to save ten jobs that predated the investment. Also, the lawful source of funds and route of funds requirements require the clear transfer of funds of which the investor is 100% owner. If a company of which the investor owns less than 100% transfers the funds, then the funds must be shown to be a distribution of which the investor is the 100% owner; for example, a repayment of a loan, a dividend, or a return of capital.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    If you invest in a commercial enterprise formed after 11/29/1990, it qualifies as investment into a new commercial enterprise. Even if the business had 27 jobs, you are not exempt from the requirement to create at least 10 full-time jobs unless you have invested in a troubled business. Investments in a new commercial enterprise that fail to create the requisite amount of jobs per investor will not qualify for EB-5 visa classification because this is one of the main focuses of this program. Based on the limited facts presented, you appear to have an issue with structuring the transfer of the funds from your foreign company''s account abroad (rather than your personal account or a joint account with a spouse (if any)) to a US enterprise. It is not clear whether the transfer was documented as a loan or payment of dividends to you. You should consult an EB-5 immigration attorney to review and analyze your specific transaction and document it appropriately. Do not hesitate to contact me should you have further questions.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    You have two serious issues. First, you need to show creation of 10 new jobs. The existing 27 jobs do not count. Or you need to show that the business qualifies as a ‘troubled business’ and that the employment level did not decrease after you made your investment. Second, it appears that your foreign company, not you personally, made the investment in the U.S. commercial enterprise. You can try to explain and document this by showing that you received a shareholder’s loan from your foreign company and then the foreign company ‘facilitated’ your investment, as this was necessary due to the annual limit on foreign currency transfers. You should contact an experienced EB-5 immigration attorney to review your documents and advise you.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    You pose an interesting question. The regulations are pretty clear on the topic of employment creations (8 CFR 204.6(e))- you must create full-time employment for at least 10 qualifying USC or immigrant workers (other than yourself and your immediate family) within the 2 year conditional residence period. Note - where the investment only sustains current employees but does not create new full time jobs, it does NOT meet the jobs requirement, unless, the investment is in a ‘troubled business’ (ie., net loss for 1 or 2 years exceeding 20% of net worth). So, the answer to your question is, yes, you must hire 10 new full-time hires to qualify for the EB-5 Immigrant Investor visa, even if the business currently has 27 employees, unless, the business is considered a ‘troubled business.’ Hope this answer helps.

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    Susan Pilcher

    Immigration Attorney
    Answered on

    Yes, you must add 10 new jobs after the date of investment. As for your investment funds, what you describe could prove problematic, or it could be appropriately documented, depending on the details of the surrounding circumstances. You should consult with a knowledgeable and experienced EB-5 attorney about the specifics of your situation.

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    Rakesh Mehrotra

    Immigration Attorney
    Answered on

    You can invest in an existing business, regardless of when that business was first created, provided that a substantial change in the net worth or number of employees results from the investment of capital. ?Substantial change? is defined as follows: ?40 percent increase either in the net worth, or in the number of employees, so that the new net worth, or number of employees amounts to at least 140 percent of the pre-expansion net worth or number of employees.? Investment in a new commercial enterprise in this manner does not exempt you from meeting the requirements relating to the amount of capital that must be invested and the number of jobs that must be created. I believe there is an issue in transferring money from your overseas company account in which you are a 40% owner unless you can clearly document that the funds for the investment came from you. The transaction can structured in a way that the company loaned you funds, so that the source of the funds is still you and not your overseas company. However the loan must be clearly and properly documented. You must consult a competent EB 5 attorney for this. You are welcome to call our office if you have any questions.

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    Ying Lu

    Immigration Attorney
    Answered on

    If the company you bought does not qualify as a ''troubled business'', you must create 10 new jobs and maintain the existing jobs. A troubled business is an enterprise that has been in existence for at least two years and has incurred a net loss during the 12- or 24-month period prior to the priority date on the immigrant investor''s Form I-526. The loss for this period must be at least 20 percent of the troubled business'' net worth prior to the loss. As to the fund transfer question, you cannot use the company bank account. The funds you invest in the U.S. must be your personal funds. Company is a separate legal entity from its owner(s).

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    Reza Rahbaran

    Immigration Attorney
    Answered on

    You must create an additional 10 jobs. The matter of the transfer requires more information as the funds must ordinarily be sent to your personal account to qualify for the EB-5 visa.

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    Shahzad Q Qadri

    RC Creator
    Answered on

    Yes you are required to create 10 additional full time jobs.

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    Stephen Berman

    Immigration Attorney
    Answered on

    Yes, you need 10 new jobs. You do need to show that the money is yours, not the company''s.

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    Roberto Ortiz

    Immigration Attorney
    Answered on

    If you purchased an existing business, it will not be considered a new commercial enterprise for purposes of an EB-5. That would mean that you will have to create an additional 10 jobs. In reference to the transfer of monies from your company, I would need to know if it was a payment of dividends or a loan.

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