How can EB-5 investors invest in a not-for-profit business?

Although the job-creating entity (JCE) must be a for-profit commercial entity, there is a way to structure the entities to have a nonprofit entity develop an EB-5 project.

EB-5 investment must be made in a new commercial enterprise (with certain exceptions for investment in a pre-existing business). The key concept here is "commercial," meaning any for-profit activity for the ongoing conduct of lawful business. The term new commercial enterprise does not include a nonprofit enterprise, such as a 501(c)(3) tax-exempt organization. However, certain types of corporations with a social purpose in mind may be formed which would allow for investment into for-profit activity, which could potentially attract EB-5 investors.

I am not sure where you heard that (there is a lot of "I heard that" in EB-5). The regulations seem pretty clear on this, though I have seen EB-5 projects for schools before, if that is close to your goal.

If structured carefully, it is possible for a nonprofit to develop a successful EB-5 project, but you will need to carefully structure the entities. It appears the job-creating commercial enterprise must be a for-profit commercial entity.

Given the fact that an investment must be at-risk and has a potential for both a profit and for a loss, there is no way to make a qualifying EB-5 investment directly into a nonprofit corporation.

According to 8 CFR 204.6(e), a commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to, a sole proprietorship, partnership (whether limited or general), holding company, joint venture, corporation, business trust, or other entity which may be publicly or privately owned. This definition includes a commercial enterprise consisting of a holding company and its wholly-owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business. See also, USCIS Policy Manual Volume 6, Part G, Chapter 2,C Thus, not-for-profit is expressly excluded.

It is not feasible, as the law governing EB-5 is operated to promote economic growth and development.

I am afraid the simple answer to your question is you cannot. But, of course, you are wondering whether under certain circumstances it is allowed. In the regional center model, you are required to invest into a newly created entity, otherwise referred to as NCE. Typically this NCE will have some kind of contractual relationship with another entity referred as job-creating entity, otherwise known as JCE. Theoretically speaking, this entity may not have to be a commercial entity. So, the NCE could have a contractual agreement with a non-for-profit entity to provide services to it. I would consult a trusted investment immigration attorney to verify that this JCE in your particular case could be a non-for-profit. If that is not possible, then certainly the profit-mined NCE could buy other services from a non-for-profit organization. Lastly, the NCE or the regional center could be owned by a non-for-profit organization. So, while the entity collecting the at-risk funds from the EB5 investors could have the profit goal, that goal could be in line with what the non-for-profit is trying to accomplish.

You cannot invest in a nonprofit (by definition), but a loan can be made to it.

If you invest the required amount and create 10 new jobs, it should be fine.

There&#39s a distinction between the NCE and the JCE. The NCE must always be a for-profit entity because the investor is taking an equity stake in the business that gives the investor a chance to gain or lose money based on their investment to satisfy the "at-risk" investment. However, once the NCE issues a loan/investment into the JCE, it is not precluded to selecting a nonprofit JCE if that fits in line with its business model. The bigger issue is the JCE will still have to be responsible for job creation and repayment of the EB-5 funds, but that should have already been considered in the initial stages of the deal.