My family has a small business in the Bay Area. There is a Chinese investor who is interested in purchasing it in order to obtain an EB-5 visa. How can we tell if our business qualifies for that type of sale? Will we have any added responsibilities if we decide to sell to an EB-5 investor versus a non-EB-5 investor?
For the EB-5 investor to be successful in his process, he will need to create at least 10 jobs (probably more if the business is considered as "existing" for EB-5 purposes) and he needs to have an active management role. The business type does not really matter as long as it is for-profit and can meet those requirements.
Most business purchases will not qualify. EB-5 is not just an investment program, it is a job creation program. Therefore, the investor must show that he or she will sustain the investment and that the new commercial enterprise (established after 11/26/1990) will create the required number of jobs within two years. If the investor plans to add ten new full-time jobs for U.S. workers in that time frame, then it might have a chance. As the seller of the business, you do not have any added responsibilities if you sell to an EB-5 investor versus a non-EB-5 investor.
An experienced EB-5 immigration attorney will be able to assist you and give you directions. If this is a direct EB-5 investment in an existing business, then the investment will have to create an additional ten full-time jobs.
The biggest question an EB-5 investor will have to answer is, Will investment in your company be able to produce 10 new jobs? Once you sell your business to either EB-5 or another investor, you are through with it unless there are conditions to the sale.
There are many factors to consider. To list a few things, typically in a private EB-5 sale, the investor would ask the original owner to stay and continue to manage the business. In addition, unlike a non-EB-5 investor whose sole interest may be profits, here the EB-5 investor may value a risk averse approach so long as the business could last over the course of the green card process, which could be four years.
It should not affect you in any way. The investor should get an opinion from an experienced immigration attorney on whether the new business will qualify for EB-5 if this is critical to his/her decision to purchase.
In so far as the sale of the business, the $500,000 or $1 million from the investor must be transferred before their I-526 submission. However, your business will be considered an existing business. This means the EB-5 investor will have to create 10 additional jobs for the business.
