Is it easier to invest in a new business or a troubled business? - EB5Investors.com

Is it easier to invest in a new business or a troubled business?

When attempting to obtain a green card through the EB-5 program, would it be easier to invest in a new project or try to rescue a troubled business? I would imagine that a new business would be riskier, but how difficult is it to prove that an investor has helped save 10 jobs? Which requirements are easier to fulfill?

Answers

Shahzad Q Qadri

Shahzad Q Qadri

RC Creators
Answered on

It is easier to invest in a new business. The calculations and proof required for the troubled business is much steeper, and often very difficult.

Fredrick W Voigtmann

Fredrick W Voigtmann

Immigration Attorneys
Answered on

One method is not necessarily easier than another. The likelihood of success (in sustaining the investment and creating or saving/maintaining the required number of jobs in two years) will depend upon the particular facts and situation. A troubled business is troubled for a reason. That makes an investment in such a commercial enterprise particularly risky. The vast number of I-526 petition approvals do not involve troubled business. There may be a market-driven reason for those numbers. Furthermore, the regional center (and even non-regional center) projects that are being packaged and promoted are not troubled businesses because it is hard to convince someone to invest in a business that is losing money. It is also difficult to maintain the pre-investment levels of employment (even if greater than 10) for the entire two-year period of conditional residence. While it might be possible to find an good investment opportunity in a troubled business, it seems fairly rare. Any investor considering EB-5 (investment in a troubled business or not) should consult with an experienced EB-5 immigration attorney.

Ed Beshara

Ed Beshara

Immigration Attorneys
Answered on

As an experienced EB5 attorney, I would convey that the larger number of successful EB-5 projects are new commercial enterprises in which the new projects are requiring and showing new job creation.

Salvatore Picataggio

Salvatore Picataggio

Immigration Attorneys
Answered on

From an immigration standpoint, investing in a new business is probably more straight forward, as you just count jobs created as a result of the investment, and do not have to consider current and past employment. From an investment standpoint, you will have to review the investment with an accountant, financial planner, business attorney, etc. Our law firm often refers our investor clients to other professionals experienced in these matters, and review any immigration consequences of their plans.

Bernard P Wolfsdorf

Bernard P Wolfsdorf

Immigration Attorneys
Answered on

Always focus on a new business, ground up works best. Investing in an established business, after the employees in place, is MUCH more difficult. Proving jobs saved is far more difficult than one would anticipate.

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