My friend, who is a U.S. citizen, started a business in a TEA three months ago and it has so far employed more than 25 people. Can I invest $500,000 in his business and apply for EB-5? Do we have to change the business or restructure it to fulfill the requirements of EB-5?
If the business is new, you do not need to restructure or reorganize it. You will have to create 10 new full-time positions. A key element will be the timing of your investment, the timing of the creation of the qualifying jobs, and the nexus between your investment and the job creation.
Yes, this would qualify for EB-5 investor processing. No need to restructure the business, but you will need to meet the minimum requisite job-creation requirement where your investment results in the creation of 10 new jobs (not counting the existing 25).
The idea is that your investment is resulting in job creation. Since it is a recently formed business, there may still be viability and if you can maybe prove that your investment was anticipated, you might be able to present a viable case. You need to find an expert to guide you who will hire an economist and structure the application carefully.
You can invest $500,000 into an existing business to qualify for EB-5 visa, but your investment will have to create at least 10 full-time new positions (at least 35 hours/week per position) unless the business qualifies as a troubled business or under 40% expansion rule.
Yes, you can invest $500,000 in the business that is located at a TEA and is employing more than 25 people. However, you have to show as a result of your investment, that you will create ten additional jobs for U.S. workers.
Yes, you will need to put in new money, $500,000 plus, and create 10 new full-time jobs based on your investment within a two-year period. But yes, this is doable.
The business will need to be evaluated for compliance with the EB-5 requirements.
You can use that business if you commit to invest $500,000 and hire 10 more employees.
You can certainly invest in the business. However, you have to show, as part of your filing, that your investment will bring at least 10 jobs within two years to the business. You must also demonstrate that your investment source of funds is legal in addition to other relevant EB-5 requirements. There may be a need to change the business, but that issue needs to be discussed and worked out with the EB-5 advisors you should work with.
Since you are investing in an existing business rather than creating a new business entity known as a newly created entity, you need to satisfy certain criteria to qualify. 8 C.F.R. 204.6(h) (2) and (3) state as follows: (2) Purchase an existing business and "simultaneous or subsequent restructuring or reorganization such that a new commercial enterprise results"; or (3) Expand an existing business through the investment of the required amount, so that a substantial change in the net worth or number of employees results from the investment of capital. Substantial change means a 40 percent increase either in the net worth, or in the number of employees, so that the new net worth, or number of employees amounts to at least 140 percent of the pre-expansion net worth or number of employees. Establishment of a new commercial enterprise in this manner does not exempt the petitioner from the requirements of 8 CFR 204.6(j) (2) and (3) relating to the required amount of capital investment and the creation of full-time employment for ten qualifying employees. In the case of a capital investment in a troubled business, employment creation may meet the criteria set forth in 8 CFR 204.6(j)(4)(ii). As you can see, the exercise is not as simple as investing $500,000 in your friend''s business to apply for the EB-5.
USCIS defines a "new" business as any business created after 1990, so a three-month-old business should still qualify. Ideally, you would show how the investment will expand the business in some way and not just provide more operating capital, because you still need to create 10 jobs from the investment (so if it has 20 employees now, you need 30 after the investment).
Based on info provided, I don't see a reason why this business couldn't be made EB-5-compliant. The business will need to create 10 additional jobs. Restructuring depends on the current structure; you'll need to assume some equity in the business.
