How does an NCE work when making a direct EB-5 investment?

The new commercial enterprise entity will be the same entity in a direct EB-5 investment. The fact that you established a new commercial enterprise which will purchase an existing business will affect the job requirements. Basically you cannot count the existing jobs and your investment will have to create new jobs. If you are going to invest $500,000, then the NCE/JCE will have to be located in a Targeted Employment Area or a rural area. The investment funds (entire required amount) will either be in an escrow account or in the NCE/JCE before the I-526 is filed.

In order to be considered "new," the commercial enterprise must have been formed after 11/29/1990. If you are buying an existing business formed before that date, you may need to show expansion or restructuring such that an NCE results. This is a legal determination and you should consult with an experienced EB-5 immigration attorney to advise you. Also, keep in mind that unless the business you are buying qualifies as a "troubled business," you will need to add 10 new full-time jobs with your investment within the two years of your conditional residency. Since you will be locating your NCE in a targeted employment area (TEA), you should identify in the I-526 both the NCE location and the qualification grounds for the TEA in which the NCE will be principally doing business. In practical terms, the investment must occur prior to submitting the I-526 petition.

There are many complex considerations here. Additionally, in order to qualify for a reduced investment $500,000 you will need to demonstrate that the business is located in a targeted employment area or rural area, or is a troubled business. Please consult an experienced EB-5 practitioner to advise you on all stages of the process before you invest.

You need to file a business plan with your I-526 application. It is a good idea to have as much in place as you can at the time of filing.

The requirement for EB-5 cases is that an investor invest in a new business that will create 10 or more full-time, permanent jobs. If you are purchasing an existing business, you must incorporate your company as a new entity to show that it is a new business enterprise or show that the business you are purchasing is a failing business. In order to only invest $500,000 into this business, you must prove that it is located in a Targeted Employment Area or in a rural area. Otherwise, you must invest $1 million.

Setting up the various entities and the overall legal and financial infrastructure, so that all is EB-5 compliant, is absolutely essential before filing the I-526 petition or even making the investment. Retaining qualified EB-5 counsel is just as essential to guide you through this process.

Typically you would set up a Limited Liability Company or Limited Partnership and obtain your own tax ID # for the company. The company would buy the business and this would be the basis for the I-526 petition. You would need to have invested the money into your new LLC, have a business plan, and project description and location sufficient to show where the jobs will come from within two years.

As part of your initial filing of the immigrant visa petition, you will need to provide USCIS with a business plan and supporting documentation (proof so to speak). They will consider evidence based on preponderance of an evidence standard. Meaning that if you show that your NCE is likely to be established and the requisite amount invested, then they have to approve it. If not they will ask for more evidence. I doubt that if you do not have the location before filing the I-526 you will meet that standard of proof. If the issue is only timing, you can file without any accounts or deposits or even the location, but before they approve it you would have to provide USCIS with all of those and much more.