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What are the EB-5 requirements for expanding an existing business?

I have a friend who owns a business created in 2000 and valuated at more than $6 million. He wants me to buy a share in the company for $1 million, and use that money to expand the business. I will own about 16 percent of the company. The $1 million that I will invest will for sure create more than 10 jobs, but it will not increase the company's net worth by 40 percent, nor increase employees by 40 percent, since he already has 100 employees. Would this still meet the requirements for expanding an existing business to receive an EB-5 visa?

Answers

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    BoBi Ahn

    Immigration Attorney
    Answered on

    If your invested funds are being used to "expand an existing business" then you must show that there is an "expansion of an existing business through the investment of the required amount ($1 million or $500,000 in TEA), so that a substantial change in the net worth or number of employees results from the investment of capital. Substantial change means a 40 percent increase either in the net worth, or in the number of employees, so that the new net worth, or number of employees amounts to at least 140 percent of the pre-expansion net worth or number of employees. 8 CFR 204.6 (h)

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    Ed Beshara

    Immigration Attorney
    Answered on

    An experienced EB-5 immigration attorney will be able to advise you on how many new full-time jobs need to be created to comply with the EB-5 requirements. Please note that the new employees must be either U.S. citizens or U.S. permanent residents.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    You sound like you have done your research regarding existing businesses and EB-5, which will be appreciated by any EB-5 attorney you would retain in the future! Yes, you may need to change the business structure to make this a viable EB-5 option.

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    John J Downey

    Immigration Attorney
    Answered on

    I think you are OK. The net worth increase that you speak of is in regard to a "troubled business" and it does not appear that his business is in that category. If you invest the $1 million and this creates 10 jobs, you should be fine.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    Yes, that is fine, since it is still a new commercial enterprise as defined by the statute. The 40 percent only applies for older businesses.

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