What should I know about direct EB-5 investments?

While you need not restructure, you will need to create 10 additional jobs 2.5 years from the date of approval of the I-526.

Direct EB-5 investment requires that the investor manages the enterprise he or she invests in as opposed to the regional center (RC), through which an investor does not typically manages the day to day operations of the enterprise. In essence, you need to consider the management of the business you are investing in and particularly think in terms of whether you can successfully operate the business or not. The fact that the business you are purchasing was established in 2007 may not significantly change how you can run the business. Depending on the current state of the business, there may be a necessity for restructuring or expanding the business. However, besides the current employees of the business, you are required to add at least 10 employees to the business once your I-526 is approved and by the time you file your I-829 which is usually a period within two years while you are on conditional green card. Advisably, seek the help of an EB-5 attorney to lay out your plan.

If the business was established in 2007, then you do not need to restructure or expand; it will be considered a new commercial enterprise. In addition to the other EB-5 requirements, the new commercial enterprise must create 10 new jobs within two years of your investment. This will occur after your I-526 is approved and after you obtain your conditional lawful permanent resident status. At the I-526 submission stage, your comprehensive business plan should contain a list and timeline of the jobs to be created, among other requirements. You should consult with an experienced EB-5 immigration attorney, such as myself, to advise you on the specific requirements.

There seems to general confusion about whether an existing company needs to be (a) reorganized/restructured or (b) expanded to qualify as a "new" commercial enterprise. The rule is actually not complicated: (1) Businesses established any time since 11/29/1990 (the official cut-off date for a "new" business) are not required to reorganize/restructure or expand. However, the investor must meet the other eligibility criteria, including preservation of all pre-investment jobs, and the creation at least 10 new jobs. (2) Businesses established any time before 11/29/1990, must (a) reorganize/restructure such that a new commercial enterprise results (8 C.F.R. ? 204.6(h)(2)), or (b) expand so that a substantial change (140 percent) in the net worth or number of employees occurs (C.F.R. 204.6(h)(3)).

You may have to expand the business, but reviewing the business would be necessary. The actual employment creation is really a concern for the I-829 stage of the process. It is understood that at the time of filing the I-526, you may still be in the very early stages of operating the business.

Here are my overall thoughts: It is possible if it is a failed business that has been showing significant losses for two years. In direct investment, it is best to be starting a new business in a non-TEA with the investment of $1 million USD. You need to create or preserve jobs. This would fall under the preserving part. You just need to ensure to keep the 10 current employees. If you grow, then even better. The amount of existing employees is counted within two years, but sometimes it can be thereafter. The business must be one that complies with and meets the requirements. Business aspects must all make sense, and the model must be functional. Just because the business exists today, does not mean it will exist in the future. I hope you find this information helpful.

The purchase of an existing business is a combination of corporate and immigration laws. There are so many things to do. You need experienced legal counsel.

To obtain a firm understanding, you should have a consultation with an experienced EB-5 immigration attorney. There are various ways to structure an EB-5 investment. Yet, there are what we call "best practices" to consider. For more information, please feel free to contact me.

You ask very interesting and thought provoking questions which will require you to retain the assistance of an experienced EB-5 attorney. First, there is a difference in investing in an existing troubled business and maintaining the current number of employees, and investing in an existing business that is not troubled and creating new additional full-time employees.