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What type of business structure is eligible for EB-5 direct investment?

I am a Venezuelan National looking to do business with a close friend in the United States. I have my holding company based out of Venezuela, owned with my wife, and can register it in a state or create a new holding company altogether (most likely also owned with my wife as 50/50) abroad. I am looking to invest over $1 million in the companies with my partner and have him as my CEO for each individual business, which would essentially be the subsidiaries for my holding company. Will this type of business structure be eligible for the EB-5 program? Would my friend be considered as one employee, since he will be my 50/50 partner in my subsidiaries? Finally, could I count his salary as investments since they are coming out of my holding?

Answers

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    J Bruce Weinman

    Immigration Attorney
    Answered on

    Yes, you can apply for an EB-5 with this model. Yes, your friend can count as an employee provided he meets the criteria (35 hrs/week, etc.). But you should consider an L-1 and then a petition for permanent residence as a managerial or executive transferee (EB-1). EB-5 is great, but it is expensive and time consuming, and should be used after having exhausted other options. Go sit down with an experienced immigration attorney and discuss the possibility of a L-1/EB-1.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    An EB-5 compliant investment must be in a U.S. new commercial for-profit enterprise. Investment must be used for job creation purposes and at least 10 full-time (at least 35 hours/week) permanent jobs are required to be created per an investor in a direct EB-5 scenario. Investment funds can be used to pay wages. Investment must be made by an EB-5 investor from a personal account, not a business entity's account.

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    Dale Schwartz

    Immigration Attorney
    Answered on

    Generally you should be able to do what you suggest. But structuring your investment is critically important and you should consult an experienced immigration lawyer before you do anything. It can be a lot more complicated than the questions you ask. We would have to know a lot more before we could give you meaningful advice.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    One of the requirements for EB-5 classification is that the investment must be in a new commercial enterprise (NCE) in the United States. An NCE is a legal entity formed in the United States for any for-profit business activity. It also includes the wholly-owned subsidiaries of a U.S. holding company. Therefore, the structure you described in your email would be eligible for EB-5 investment purposes as long as the investment is received and used in a U.S. NCE. As for the job creation, any full-time. permanent position for a U.S. worker who is not your immediate relative should qualify. Finally, your investment should be used for job creation purposes. Therefore, the funds you invest can be used to pay employee wages. For EB-5, the investment must be made by you personally, not by any company in Venezuela.

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    John J Downey

    Immigration Attorney
    Answered on

    The initial structure looks ok. The holding Company will need to invest in a New Commercial Entity (NCE) which will produce at least 10 jobs per investor. If your partner is paid a salary as an employee it would count as one job.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    EB-5 projects, known as "new commercial enterprises," must be U.S. for-profit businesses. Investment funds must be personal investment funds. Any employee counted as a direct employee must be a U.S. citizen or permanent resident, and not a family member of the investor. I think you have a few things to work out, which requires an EB-5 immigration attorney to assist you.

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    Robert Lee

    Immigration Attorney
    Answered on

    Your proposed structure could work. Just make sure that the holding company owns the subsidiary companies and show how the holding company investment funds are being transferred into each company. Your partner could be considered a full-time employee, but must be a qualified U.S. worker (citizen, LPR, etc.) Also, he should not be a full-time worker anywhere else. The salary of your partner should definitely come from the investment funds to show it is for job creation.

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    Robert Cornish

    Securities Attorney
    Answered on

    You have got a host of issues due to the sanctions in place with Venezuela. You are going to have to speak with an attorney specializing in handling U.S. sanctions matters to ascertain what you can do so that the EB-5 project in which you want to participate will not be deemed in violation of U.S. sanctions laws. The penalties are very serious for this and you need counsel to assist you without a doubt.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    Generally, EB-5 investments take the form of Limited Partnership, Partnership or Corporation. I would recommend you immediately seek out and retain a qualified EB-5 attorney to advise you on the most effective structure to meet your immigration and investment goals.

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