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How can my brother qualify for EB-5 through my company?

I am a U.S. citizen and I own a company that employs about nine employees. My brother would like to invest around $500,000 in my company to create additional jobs, and to qualify for the EB-5 program. Can EB-5 investments be made in a family-owned business? Do we have to get TEA designation?

Answers

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Your brother's investment into the existing company (assuming it was formed after November 1990) must create an additional 10 full-time positions for qualifying U.S. workers. EB-5 investments certainly can be made into family businesses, assuming all other requirements are met. If the investment will be $500,000, you must obtain a letter from the state verifying that the company is principally doing business in a TEA.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Being family should not be an issue as long as the business otherwise qualifies as an EB-5 project, including being within a TEA.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Your brother may make a direct EB-5 investment in your business. However, to qualify for the EB-5 visa, his investment must be directed to the creation of 10 full-time permanent jobs. Nine employees prior to investment will not count unless it is a troubled business meeting specific requirements. Additionally, to qualify for a reduced investment amount (currently $500,000, most likely to increase to $800,000), the business must be in a Targeted Employment Area or rural area. Otherwise, the minimum investment is currently $1 million likely to increase to $1.2 million. Investment funds must also be documented to originate from a lawful source. You should consult an experienced EB-5 immigration attorney.

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    Charles Foster

    Immigration Attorney
    Answered on

    I think it would be difficult for your brother to qualify through your company. While he could invest in your company, as a result of such investment he would have to create 10 new jobs for U.S. workers. He cannot count the jobs that have already been created. To invest the $500,000, your enterprise must be located in a Targeted Economic Area (TEA) and depending upon your state, you would have to have a determination made by the governor or mayor of the city where your enterprise is located or some other designee of your state governor. They would have to determine that your enterprise is located in an area which could be comprised of more than one census tract where the unemployment rate is one times the national average.

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    John J Downey

    Immigration Attorney
    Answered on

    There is no prohibition for a family member investing. A $500,000 investment would require a TEA designation.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    It may be better to start a new company. Most competent EB-5 immigration lawyers can advise you regarding whether you qualify for a TEA, although caution, as the rules may change soon.

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    Ying Lu

    Immigration Attorney
    Answered on

    A family business can be structured as an EB-5 compliant business as long as the business is 1. A new commercial enterprise as defined by the law; 2. Will create at least 10 new jobs with the investment from the EB-5 investor. The minimum amount of investment is determined by the location of the job creation entity. If it is in a TEA, then the minimum investment amount is $500,000; otherwise, $1 million is required.

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    Debbie Klis

    Securities Attorney
    Answered on

    Your brother could make a direct investment into your company by purchasing equity in the entity. The equity issued to your brother could be a different tranche of shares or units than you have if you wish to limit his vote and control to some extent. If structured as a direct investment, then your business must create and fill 10 new jobs during the two year compliance period; these jobs must be permanent full-time jobs (35 hours per week or more). Lastly, to take advantage of the $500,000 reduced amount, your business must be in a Targeted Employment Area, otherwise the buy-in will be $1 million (subject to increase by pending legislation).

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    Lynne Feldman

    Immigration Attorney
    Answered on

    Yes and yes.

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    Wilka Toppins

    Immigration Attorney
    Answered on

    An EB-5 investment can be made into a family-owned business. However, depending on how you structure the business plan to connect the creation of 10 jobs to your brother's investment - I think this is pretty doable. Please keep in mind that your brother's investment will need to create 10 additional jobs to the 9 that you already have, as there has to be a direct correlation between the jobs created and the EB-5 investment. You do not need to get a TEA designation, but you need to make sure that the area where the jobs are created qualify as a previously designated TEA zone. You will need to work with a team that includes an experienced EB-5 attorney, corporate attorney and business plan consultant to prepare an adequate EB-5 Matter of Ho plan.

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