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How can an EB-5 investment be split between several businesses?

I am interested in opening several businesses in a TEA in Orlando, Fla. The initial investment is estimated at $350,000, but I expect to invest at least another $150,000 within two years. Does the EB-5 investment have to be made all at once into a single business? Will I run into problems if I am both making the investment in installments AND investing between several businesses?

Answers

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    The problem you face is not that you are making an investment into two separate businesses; you could fix that by putting both businesses under one new commercial enterprise (NCE). You would need to make sure that both businesses are wholly-owned subsidiaries of the NCE. That would qualify. The real problem is that you are not investing the required amount of capital. Under your example, you would not be able to apply for EB-5 unless and until you can show $500,000 is invested and at risk. The money that has not been invested is not "at risk" because it is not subject to both potential gain and loss. Also, you need to show that your NCE is principally doing business in a Targeted Employment Area (TEA) if you are investing $500,000. Otherwise, the minimum capital investment is $1 million.

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    Ed Beshara

    Immigration Attorney
    Answered on

    In a direct investment, you can invest your personal funds into a holding company which 100 percent owns several subsidiary companies. Each separate subsidiary company operating different types of businesses and starting at the same time can receive your personal investment funds in different quantities at different times, and the combined subsidiaries can create 10 full time jobs within two and half years after the investor''s I-526 petition is approved.

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    Oliver Huiyue Qiu

    Immigration Attorney
    Answered on

    Yes, it will be very problematic to invest the required amount in installments. The regulation requires that at the time of filing the I-526, the required $500,000 investment has to be invested or irrevocably committed. The installment would seem to conflict with such requirement unless it could be established the investment is irrevocably committed. In addition, the idea of splitting the required newly created positions among several businesses with different locations may only be possible under restricted circumstances. It may include using one single corporate entity over all locations.

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    John J Downey

    Immigration Attorney
    Answered on

    This will all depend on the business plan that you submit. If the plan makes business sense and the requisite jobs are created and the money is placed at risk, then it could be approved.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    The general rule is that you must invest all the money all at once, no piece meal or installment investments are allowed. There is no exception to this rule. For additional information before you proceed, talk to an EB-5 attorney.

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    Olga Karasik

    Immigration Attorney
    Answered on

    Generally speaking, it should be OK; there are ways to structure this transaction in a way that will be acceptable. Provided that you are creating the required 10 full-time permanent jobs, and provided that you can show that you have all $500,000 at the time of filing.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    USCIS has allowed for business portfolios where one investment into a single NCE can be split into multiple job creating entities. The entire $500,000 may need to be invested into the NCE or put into escrow at the same time, however.

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