My relative is in the process of developing a motel in the U.S. He already has a business plan. If I want to join him and invest in the same project as a direct EB-5 investment, do we need to come up with a new business plan?
Depends. If it's a troubled business that you're rescuing or your money is being used to expand the business (by around 40%), it may qualify. Otherwise, best to invest in a new business. Even if your relative has a business plan, chances are you'll have to make an EB-5-compliant business plan.
You should carefully evaluate EB-5 investment into an existing business. You either need to create 10 new full-time positions with your EB-5 investment or a business must otherwise qualify as troubled business or under 40% expansion rule. A business plan currently in place may not be compliant with EB-5 requirements and may need to be amended. Consult an experienced EB-5 immigration attorney for further comprehensive consultation.
Investing in an existing business is extremely difficult. If the business is losing money, then it is relatively easy to invest in a troubled business and save the 10 jobs. But otherwise, purchasing an existing business requires you simultaneous or subsequently restructure or reorganize, such that a commercial enterprise results and, of course, 10 new jobs are added. Alternatively you can expand an existing business such that a 40% increase either in the net worth or the number of employees results, but you must have at least 10 new employees to succeed.
No problem. Just make sure to revise the business plan to make sure that it is EB-5 compliant. Other than that, the standard EB-5 considerations will apply: creation of 10 new full-time positions, required investment amount, that is $500,000 for TEA and $1 million for non-TEA, etc.
You may be able to work with the existing business plan as a base and just build on it with the requisite detail/info needed for the EB-5 filing.
EB-5 business plans should be prepared to meet certain USCIS requirements for the investor, project and hiring of 10 LPRs or USCs. You may want to amend the business plan to meet the EB-5 requirements.
Yes, you can make a direct EB-5 investment in your relative's motel that he's developing, provided it is EB-5-compliant. You may need a revised business plan in order to be EB-5 compliant, and you need to show that you will create 10 jobs for U.S. workers as a result of your investment. If you're investing $500,000, then the project must be located in a targeted employment area. Otherwise, the requirement is $1 million.
You may want to revise the business plan to show you the investment you will make and how it will affect the business and hiring of employees. The problem with small motels is that they usually don't need 10 full-time employees. Usually, the maids and housekeepers are part-time. You must hire 10 full-time staff.
No, you don't need an updated BP unless the budget is changing. Ownership docs will need to be updated.
Yes, the business plan would need to be modified to meet EB-5 requirements.
Since there are EB-5-specific requirements for business plans, yes. Fortunately, even a standard business plan will give you a good foundation for the EB-5 additions.
If the business plan includes a plan to create 10 new jobs based on your investment, it will be fine.
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