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How will merging two businesses affect TEA approval?

I am planning to go for direct EB-5 in a TEA. I will have a new business in the wholesale/retail industry. But at the same time, I have an opportunity to buy an existing business (non-TEA) for $120,000. Does EB-5 allow you to merge or take over other business units to expand? With the takeover, would my TEA-located business now become a non-TEA business?

Answers

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    The conservative approach would be to get both locations designated as TEAs.

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    Charles Foster

    Immigration Attorney
    Answered on

    I may not have enough information to answer your question completely, but generally speaking, in connection with your direct EB-5 located in a TEA and your opportunity to buy an existing business located in a non-TEA, it would not necessarily affect your direct EB-5 petition. Your project located in a TEA is eligible to merge provided that it continues to independently meet the EB-5 requirements, i.e. that it is for a $500,000 investment, i.e. that you have invested the principal amount of money and that the principal business and premises are still located in a TEA and it is still creating the required 10 direct jobs for U.S. workers.

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    Gus Shihab

    Immigration Attorney
    Answered on

    Kindly understand that a “Targeted Employment AREA” is just that. It is an area that has been designated based on either population or unemployment to merit reduction of the initial EB-5 investment. Your question states that your planned EB-5 investment is in a TEA, but the other potential opportunity is non-TEA; this implies that the opportunity is outside of the area that will host your EB-5 business. It is not clear from the merger that you are inquiring about whether it will be a corporate merger or an accounting merger, or whether these two businesses will be independent but joined together with one parent company. But generally speaking, the focus of the operation, investment and employment in the TEA is what counts for EB-5 purposes. I would sit down with a reputable immigration lawyer and discuss these issues in greater detail.

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    Ed Beshara

    Immigration Attorney
    Answered on

    The initial creation of the required jobs and the investment must have been in the TEA.

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    Peter Zhang

    Immigration Attorney
    Answered on

    You can merge your businesses however you like; just make sure your EB-5 investment is structured through the one located in the TEA.

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    John J Downey

    Immigration Attorney
    Answered on

    It depends - is the existing business the same type as your new business in the TEA (retail/wholesale)? If yes, then I think you could operate as a TEA in the original location and use the existing business as a satellite, and perhaps count the jobs there, but it would probably matter as to how far from your TEA is the existing business. You need to prove a nexus between the two.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    Purchasing an existing business will likely complicate the matter considerably. It may be better to keep them separate and not apply for immigration benefits based on the existing enterprise.

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