I am a U.S. citizen and I started a real estate acquisition LLC back in December. I have a potential EB-5 investor who is very interested in acquiring my business as her new commercial enterprise. However, can she just be an investor or do I have to make her an owner with a certain percentage?
She can be either an investor or owner of a certain percentage. However, make sure that the rules governing EB-5 investors are followed if you pursue the EB-5 process, such as creating at least 10 jobs for the investment, just to name one. Advisably, consult an attorney for proper planning.
It is problematic to proceed with an EB-5 case when the foreign national's investment involves acquiring an existing business. You should have a consultation appointment with an immigration attorney who is experienced with EB-5 matters.
In order to qualify for EB-5, she must make an investment and acquire a percentage of the company (it can be a very small percentage). Real estate acquisition companies often struggle to create sufficient full-time, permanent jobs that meet EB-5 requirements. You should consult with a lawyer.
Generally, an EB-5 investor acquires a business interest in the profit business entity in exchange for her EB-5 capital investment. There is no specific percentage requirement, but an EB-5 investor must be either in a management role or policy formulation role. EB-5 investment must be at-risk and must create jobs, such as how an EB-5 investor's capital investment must create at least 10 full-time positions (minimum 35 hours per week, per position). It cannot be a passive investment vehicle, such as a passive real estate investment.
It depends (sorry for the stereotypical lawyer answer). But if you work closely with an immigration attorney, you can get your company and investor set up for the best chance of immigration approval, and balance that with the business goals as well.
If you set up your company as a regional center, she can be an investor in your business. A passive investment into a company does not work for EB-5. It is usually hands-on management and involvement into a company. If she wants to buy your business as part of EB-5, it is possible. However, there are several legal and financial requirements that need to be met. You should consult with an attorney specializing in EB-5 visas.
You can include a potential EB-5 investor in your company if assuming the investor is able to make the minimum investment of $500,000 and your enterprise is located in a targeted employment area (TEA). If it is not, the investment must be $1 million. Furthermore, there has to be a business plan that has to show that, as a result of the investment, your business will hire 10 U.S. workers over a period of two years. Obviously, by definition, any investor would have to have his or her interest represented by some percentage of the business, all of which would be subject to negotiation between the parties.
An EB-5 investor may be either an owner or investor; however, since your business is an existing business and not a "new" commercial enterprise, there will be additional requirements that would have to be met.
