My three partners and I own a medium-sized business in India. We are considering investing $2 million dollars in the U.S. and opening a branch in a TEA. We also want to use this investment to apply for EB-5 visas. Should we invest as a company or should we invest separately? If separately, how should we structure the new business to make sure that every partner’s right is kept as it is in the parent business while keeping compliant with the requirements of EB-5?
EB-5 investments must be individual investments. There should be a way to structure the U.S. entity so that the partner''s rights are clear and your wishes for the business structure can be accommodated. This typically would be done in an operating agreement (for LLCs) or in the by-laws (for Corps).
Each of the four individuals must invest as an individual EB-5 investor. The new commercial enterprise could be an LLC and each investor could be a member of the LLC. Thus, the LLC would have four members.
For EB-5 purposes, each investor needs to separately invest the requisite minimum capital ($500,000 for TEA) and each investor must create 10 full-time jobs (so the branch office in the U.S. must create 30 new jobs in total since there will be 3 EB-5 investors). No requirement that the business ownership or structure mirror the parent business in India for EB-5 purposes.
This idea is feasible. However, it is advisable you should work with an EB-5 attorney. The three will create a company, but each person's contribution must amount to at least $500,000 for a person to qualify for an EB-5 visa. All other EB-5 requirements must be met as well.
It is possible to consider both L-1 visa and EB-5 visa options here. If the L-1 visa option is considered, then your parent company can be a petitioner. If the EB-5 visa option is considered, you can do pooled EB-5 investment but each EB-5 investor needs to invest personal funds from a lawful source and each EB-5 investor must be allocated at least 10 full-time positions (at least 35 hours/week) to qualify for an EB-5 visa in a direct EB-5 case. It may be easier to invest through a regional center project. Please hire an experienced EB-5 attorney who can review all options with you and assist you, including planning for an appropriate business structure.
There are many options here. If you are confident that you can create in total 40 full-time positions, then you can each go ahead and invest $500,000 and form a new direct investment company that you jointly own. Get the location authorized as TEA and you should be OK. The only thing you need to be cognizant of is that unless your business can be leveraged, it will probably be very difficult to create the requisite minimum 40 full-time positions and at the same time be profitable. That is why most people with limited funds choose to go the regional center route these days. If all of you have been working in India in the same company for some time and plan to open a branch of the same company here, you might be able to work as an L-1 here. L-1 is a non-immigrant visa but L-1 visa holders can apply for permanent resident status as well.
You may set up a stand-alone project or you may set up a regional center. For in-depth strategy and legal assistance, you should contact an attorney who is experienced in these type of investments.
Each person will need a $500,000 investment of personal funds. As for setting up the structure, I like working with corporate attorneys who specialize in those matters. It take a good team to do EB-5 right!
You and your three partners would have several options, and you could decide on what the best option is from a business point of view, in terms of structuring your investment. Given the fact that each investor does not have to have a controlling interest, you and your three partners could all invest in the same legal entity, assuming that the business is located in a TEA and the minimum investment amount of $500,000 is not increased. If each makes a $500,000 investment for a total of $2 million, you could arguably, all four, qualify by investing in the same company provided that you can demonstrate your $2 million investment will create at least 40 jobs for U.S. workers. This may be the biggest challenge. Under certain conditions, if your business were organized under the hospices of a regional center, you might be able to, by virtue of economic studies, create a larger job count by counting indirect and induced jobs.
Best to invest separately for EB-5.
We can discuss, but an L-1A and then multinational manager green cards may make more sense.
You would invest separately in your business since the EB-5 visa is for individuals. You may have other options to invest and come into the U.S. faster than with an EB-5. Once in the U.S., you may be able to then transition into an EB-5. It would be best for you to consult with an immigration attorney who specializes with EB-5.
You have to invest your own funds individually in order to obtain EB-5, but you may be able to pool your investment in order to invest in the same business. The easiest option is probably for you to each invest in a regional center project, but if you want to proceed via your own business, this may be possible if you invest the requisite amount and create the necessary jobs.
You may have both an L-1 and and EB-5 play here. If EB-5, you'd have to have three separate investments into the U.S. business. If L-1, then your overseas parent company can be the petitioner. Best to have a consult before you begin the structuring.
You will each need to invest $500,000 of your personal income. Each investor will need to be able to create 10 full-time jobs with his investment.
If you each would like to apply for a green card through EB-5, you each must invest the $500,000 separately, as individuals. In other words, you would need to realize the income, pay taxes (if applicable) and then make the requisite investment. Structuring of the U.S. entity would have many considerations, EB-5 compliance being only one of them, so you should seek the advice of competent business counsel who would liaise with immigration counsel. You each must have an equity stake in the U.S. enterprise. Each is responsible for the creation of 10 full-time jobs. A full analysis of other options, such as EB-1C, should be explored as well.
These are great questions that should be the subject of a consultation with an investment immigration attorney who knows you, your group and their goals.
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