How can a E-2 investor eventually apply for EB-5?

Under certain conditions the investment made by an E-2 investor may count toward the minimum $500,000 investment required for purposes of acquiring lawful permanent residency under the EB-5 classification. The enterprise itself must be located in a Targeted Economic Area (TEA) in order to qualify for a minimum investment of $500,000. One would still create a minimum of 10 jobs for U.S. workers. It would be more complex if you had multiple restaurants and you tried to accumulate the investment made in each restaurant as well as county employees in separate restaurants. As always, you should consult experienced immigration counsel.

You may use the E-2 business for EB-5 purposes, but new jobs must be created (you cannot count preexisting jobs). You should consult an EB-5 immigration attorney to structure the transaction and a holding company may be utilized.

The initial E-2 investment funds can count towards the required EB-5 investment amount. It is advisable to invest the balance of the EB-5 funds needed into the same E-2 company and add the additional direct employees required.

You can "top off" your investment to $500,000 with additional PERSONAL investments (so, not retained earnings). How that will be structured, especially considering that you will have multiple businesses involved, requires the guidance of an EB-5 attorney.

The plan sounds like you are trying to combine two business entities. Unless you can meet the financial requirements for an EB-5, this plan may not work for at least two reasons. First, the existing employees in the preexisting business cannot be counted toward the job creation requirement of EB-5. Second, retained earnings in the existing business cannot be used or counted toward the $500,000 EB-5 capital investment requirement; thus, you may have to document a separate investment of $500,000 for EB-5 purposes. Advisably, consult an EB-5 attorney on some of these issues.

It means that you can only reinvest taxed earnings. Take profit as income then reinvest. You can count new investment as well so long as it is invested in a new commercial enterprise, even one that owns other commercial enterprises.

Simply stated, an E-2 can apply for an EB-5 when he/she has invested the required ($500,000 or $1 million) into the U.S. enterprise. While the E-2 and EB-5 have similarities, the categories do have important differences that need to be understood if the E-2 investor is looking to qualify for the EB-5. For example, retained earnings can be counted as an investment for E-2 purposes, but cannot for EB-5. This means that if the company earns a profit of $25,000 and retains that profit - for an E-2, the investor may be able to include this sum in its investment total. For EB-5 purposes, this would not count as an investment. Rather, the company would need to pay a distribution to the investor. The investor would receive it in his/her personal account, likely be subject to taxation on the amount, and then re-invest it in the company. Prior to purchasing a second restaurant, I recommend that you engage an immigration attorney to review the investment previously made and devise a plan relating to the additional investment that will qualify you for the EB-5 category.

You cannot count income in the business until you have taken it out and paid taxes. You have to show the lawful source of funds for that initial investment. Also, if you buy another business, you should hire an EB-5 lawyer to help you structure the deal so that it might qualify for EB-5.