Does an entire business have to be in a TEA to qualify for lower investment?
Does a business have to have all operations in the TEA or rural area to qualify for 500K investment for the EB-5 program? For example, if a factory is located and manufactures equipment in the TEA or rural area but the equipment is installed in other areas, which are not rural or TEA, will it still qualify?
The new entity''s primary location must be doing business regularly, systematically and continuously in a targeted employment area to qualify for the reduced threshold of $500,000. It must also create 10 direct, full-time jobs. Under EB-5, the location where the jobs are being created will be considered the primary location. You should consult an experienced immigration attorney who will help you create an adequate strategy.
According to the USCIS, the new commercial enterprise must be principally doing business in a targeted employment area ("TEA") in order for the investor to qualify by investing the reduced capital investment amount of $500,000. Otherwise, the requirement amount is $1 million. Here is the language from the latest Policy Memo from USCIS (EB-5 Policy Memo, 05/30/2013): "For the purpose of the EB-5 Program, a new commercial enterprise is ''principally doing business'' in the location where it regularly, systematically, and continuously provides goods or services that support job creation. If the new commercial enterprise provides such goods or services in more than one location, it will be deemed to be ''principally doing business'' in the location that is most significantly related to the job creation. Factors to be considered in making this determination may include, but are not limited to, (1) the location of any jobs directly created by the new commercial enterprise; (2) the location of any expenditure of capital related to the creation of jobs; (3) where the new commercial enterprise conducts its day-to-day operation; and (4) where the new commercial enterprise maintains its assets that are utilized in the creation of jobs. Matter of Izummi, 22 I&N Dec. at 174." Therefore, you would need to make an argument that the company''s actions that are most significantly related to job creation would be the manufacture of the equipment, and that the installation services are only incidental. You would argue that the location of the jobs would be where the equipment is manufactured, not installed, that the expenditure of capital is mostly going to occur in the TEA and be related to the factory, where day to day operations and most business assets will be located. You should consult with an experienced EB-5 immigration attorney on the specific legal requirements.
The principal location must be in a TEA, but contiguous census tracts can be combined to create a TEA that would encompass both locations. We would work closely with the state agency responsible for such a designation, a qualified economist, and other professionals to develop an approvable legal and financial infrastructure.
The enterprise in which the EB-5 investment is made must principally do business in the TEA to qualify for the lower $500,000 investment. From the fact pattern you have described, your business is located in a TEA, employees are working in that location and the product is manufactured in that location, this appears to meet the standard.
The EB-5 project and its main or core business activity (manufacturing) in the job creating entity must be located in a TEA. The end products of the manufacturing process which may be the equipment can be sold and eventually installed in other locations outside the TEA.
The job creating entity must be doing business "principally" in the TEA to qualify for a $500,000 investment. There is no bright line rule on how much qualifies, but at a minimum, more than 50% of the business activity must be within the TEA. The higher the percent, the better the odds of qualifying. Factors to consider are where the most employees are located, where the revenue is generated, where the physical plant is located, and whether the installation teams are based within the TEA, even if the installations occur outside of the TEA. I think that this is going to be a complex and very fact specific issue, and you should consult with an experienced EB-5immigration attorney before proceeding.
If you establish your business entity at the factory site and employ all your employees from that site, you should be able to qualify even though you may dispatch your workers to various locations for installation.