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How can our family-owned business qualify for EB-5 investment?

My dad has an existing business in India (10 employees) and in the United States (10-12 employees). The business was started in 2015. The total investment in the United States so far is $200,000. I plan to invest $300,000 more to expand this business. I am currently on H-1B. My wife is on H-4 EAD and currently heads the U.S. business. My dad is willing to gift me the U.S. business as an inheritance. Does gifting and taking over the business count as a valid EB-5 investment?

Answers

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    Ed Beshara

    Immigration Attorney
    Answered on

    Your personal investment has to equal $500,000 to qualify for an EB-5 investment.

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    John J Downey

    Immigration Attorney
    Answered on

    You should be able to do this, but you must be very accurate as to the "sources of funds." Your dad should also gift the $300,000 directly to you and not the business.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    You cannot use the gift of a business or business interest to qualify for EB-5 investment. You may invest $300,000 + an additional $200,000 of lawful sourced funds (assuming the business is located in a Targeted Employment Area to qualify for a lower investment amount) which must go toward the new job creation of at least 10 full-time employees (at least 35 hours/week). Your father's prior investment and/or gift of business to you do not qualify you for the EB-5 visa. Prior employees can generally be in the scenario of a troubled business. You may want to consider doing a new direct EB-5 investment or invest through a well-established regional center project with a $500,000 investment from a lawful source of funds.

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    Elizabeth Krukova

    Immigration Attorney
    Answered on

    A gift of funds from father-to-son certainly qualifies for the purposes of investment; therefore, the additional money you are planning to invest should qualify you as an investor even if the money was gifted by your father. A gift of “company” is not a gift of investment, and in fact it is not required that the father transfers the entire company to you (he can though). It would be enough that the father transfers only a share in the company. Make sure new jobs (10) are created with your new investment. We have had similar situations where the business has been running, the investment made and jobs created. In such cases, we just used all of these factors and obtained permanent status for the owners utilizing what has been done in the past.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    Gifting is a valid EB-5 investment. However, based on your facts, taking over this business will not be enough to qualify for a successful EB-5 petition for a host of reasons. First, just adding $300,000 is not enough; you will need $500,000. It appears you are relying on the presumption that the value of the current business is $200,000. The value of this type of gift must be well-documented. Second, you cannot count the current employees of the existing business. For a successful petition, you will need to create at least 10 new employees with the new business within two years of establishing the new business. Finally, no family member (such as your spouse) can be counted as an employee of the new business. Advisably, before proceeding further, consult an EB-5 attorney.

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    Dale Schwartz

    Immigration Attorney
    Answered on

    Yes, gifting works fine. Did you work for the company in India in an executive or management position for at least one year before coming to the United States? If so, perhaps an L visa would be easier.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Giving the U.S. business to you will not meet the requirement for you to invest the minimum amount of EB-5 capital. In other words, your father could give you the business, but you would still have to invest $500,000 (assuming that the business is located in a TEA) and create 10 new jobs for qualified U.S. workers. His $200,000 investment and job creation cannot be "gifted" to you; you must make a full, qualifying investment in a business that will create the required number of jobs.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    It is unlikely gifting the business plus adding $300,000 will work as you already have 10-12 employees. My recommendation is to look at starting a new business with the $300,000 and then have your father gift you $200,000, provided you are in an area qualifying for this lower investment amount.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    This could possibly work, but the investment amount in a direct project is $1 million, not $500,000, unless the business is located in a Targeted Employment Area. Unless your dad is the principal, you will need to create 10 new jobs from the investment.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    It may be, with the assistance of an experienced EB-5 attorney to guide you on the proper infrastructure and documentation. You may also be subject to increased job creation requirements.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    Your father's business may qualify - however, at this point I recommend you retain an investment immigration attorney with a proven track record in direct investment EB-5. With the changes in the law coming at the end of September, I suggest you take action soon.

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