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How can a business be expanded and qualify for EB-5?

I want to provide finance to open two new fitness centers for a business which already has 10 locations. Is there a structure that could allow this investment to qualify as a ''new business'' for EB-5 purposes? Also, the business is located in Florida, a state with minimal TEA areas, so could I operate the business from a separate admin office (in a TEA area) which would employ the workers in the fitness centers?

Answers

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    The EB-5 rules for expansion have to do with whether or not the commercial enterprise is considered "new" for EB-5 purposes. If the business in Florida was established after 11/29/1990, then it is considered "new" and you do not have to follow the expansion rules; you just make the qualifying investment and create 10 new full-time jobs for U.S. workers. You cannot count the existing jobs unless the business is a "troubled business." As for the TEA question, it would depend upon whether or not the admin office would be considered when the new commercial enterprise is principally doing business as opposed to the actual fitness centers. Probably the answer is "no" because if that were allowed, then any EB-5 investor would just open an "admin office" in a TEA when their investment was really in a $1 million area. The USCIS May 30, 2013 policy memo has a definition of "principally doing business." See page 7 of the memo.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    New locations should qualify as a new commercial enterprise, but it will need to create the required minimum full-time permanent jobs and be located in a TEA or rural area where it is "principally doing business" to qualify for a lower investment threshold.

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    John J Downey

    Immigration Attorney
    Answered on

    Two new fitness centers could qualify under EB-5. The TEA is another matter; the area must be where the enterprise is "principally doing business."

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    A new location itself may qualify as a new commercial enterprise. This new location would be responsible for the 10 jobs (it cannot rely on the other locations). The location of the entities should be in a TEA if you want to use the lower investment amount.

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    Steffanie J Lewis

    Immigration Attorney
    Answered on

    If you are purchasing two franchise fitness center locations, they can be considered "new enterprises." IN that sense, you would not be expanding an existing business. However, you would need to operate the new enterprise in a TEA or rural area to benefit from the reduced $500,000 investment requirement.

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