I bought two stores in the United States. I plan to apply for EB-5 direct investment by restructuring these two places into restaurants. Each restaurant is owned by a different LLC and I have a 50 percent share in both LLCs. The LLCs are not connected to each other. My question is whether these two investments are acceptable for EB-5? Can I combine two restaurants owned by different LLCs for an EB-5 direct investment?
The EB-5 regulations and policies in a direct EB-5 structure allow a holding company to 100 percent own several subsidiary companies that are ready to start actual business operations. The EB-5 required investment funds can be deposited with the holding company and then dispersed amongst the subsidiary companies, e.g. disbursed amongst two or three.
If I am understanding your question correctly - the investment (any number of infusions of capital) must be in one commercial enterprise. As structured, I do not believe that the investments in two enterprises will qualify for EB-5 purposes. I recommend that you engage an immigration attorney to discuss the options you may have to qualify for a green card under the EB-5 category.
First, you would have to show that you have invested $1 million (and the source of such funds) into a new enterprise that creates at least 10 jobs. Since these are two separate entities, you would have to merge or restructure the businesses into one unless you can show that you would otherwise qualify through one of the entities. In order for the investment to be at the $500,000 level, you would have to show that the restaurant is located in a Targeted Economic Area (TEA), a high unemployment area or in a rural area.
If each of the restaurants is owned by two different entities, it will be difficult to prove that you have invested the requisite capital ($500,000 for a TEA and $1 million for a non-TEA) and created the requisite 10 jobs through your investment, since the investment will be in two different operations/entities. The ideal would be to have one entity own both restaurants, and you invest in that one entity, which would be responsible for creating the 10 jobs.
This sounds like a complex arrangement which will engender a lot of corporate reorganization. It may draw unnecessary vetting as well. However, here are a few facts and issues missing in this question that need to be addressed prior to going further, namely: 1) What are the values of the emerging two restaurants? Is the total of the combined entity anywhere between $500,000 and $1 million? 2) Where is the emerging entity located? Unless, it is in a rural area, you may need not less than $1 million. 3) Will the ownership be one entity under you or just two businesses? and 4) Will the emerging entity actually result in the creation of at least 10 new jobs? The current number of employees may not be counted. Pay more attention to the corporate law and the need to meet the requirements of EB-5 in the process of the amalgamation of these existing businesses. Advisably, seek EB-5 attorney counseling for further analysis of your facts including perhaps among other things a sound business plan before you proceed further on this idea.
John J Downey
As long as you invest the correct amount in each business and provide the minimum of 10 jobs per investment, there should be no problem regarding your percentage of ownership.
You really need to hire an experienced immigration lawyer before you do the deal. Generally, you have to invest $1 million and create 10 new jobs for each investor, unless exceptions apply. So if these investors are going to invest, are you going to restructure and reorganize the business such that each new investment creates 10 new jobs? If not, then there are likely no green cards.