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How can I run an EB-5 direct investment business under the parent-subsidiary company model?

We are a group of three foreign investors who will acquire commercial land in California to create and run small entities like restaurants, entertainment centers, etc. We will each invest $500,000 and create 30 jobs in total. Here is my question: We want to put our investment in an LLC (parent company) and run payroll through the smaller businesses (subsidiary companies). How can I make this a compliant arrangement?

Answers

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    Julia Roussinova

    Immigration Attorney
    Answered on

    If the business is not located in rural area or designated targeted employment area, the current investment threshold is $1 million per EB-5 investor, which will soon increase. A parent entity must wholly own subsidiaries. It is highly advisable for you to retain the services of an experienced EB-5 immigration attorney and business attorney to guide you and properly structure your business entity. Petitions must also be accompanied by EB-5-compliant comprehensive business plan.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    You will probably need to wholly own the subsidiaries. You will also need an EB-5 attorney to assist you in making this compliant with current and potential new laws and regulations.

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    Belma Chinchoy

    Immigration Attorney
    Answered on

    This arrangement is fine. Your attorney will guide you in collecting records regarding ownership and flow of funds from the parent to subs.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    Your idea appears feasible. Advisably, consult an EB-5 attorney who can help guide the process.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    If in a state allowing series LLCs, this is one option. It should be doable, though, regardless of where you are located. You must have proper definition of the project, including all the businesses that will need to be in a defined geographical area.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    The subsidiaries have to be 100 percent owned by the parent but you need to have a very simple structure. Also note the investment amount is $1 million, not $500,000. It may be reduced to $500,000 if you are located in a TEA or rural area. Moreover, the rules will soon change. You need to retain qualified professionals to guide you. You may also want to affiliate with a regional center that can allow indirect job counts.

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    Dale Schwartz

    Immigration Attorney
    Answered on

    You can possibly do this, but you need guidance from an experienced EB-5 lawyer near you. It is way too complicated to try to give you advice over the Internet.

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    Charles Foster

    Immigration Attorney
    Answered on

    Multiple EB-5 investors can make a direct EB-5 investment in a single entity, in your case an LLC. One of the issues created when that LLC will be a parent company of subsidiary companies operating restaurants and entertainment centers is whether or not the enterprise is located in a targeted employment area (TEA) in order to make the minimum of investment of $500,000. If at all possible, you should establish that each of the operations is located in a TEA and, preferably, your parent LLC should be a direct owner of each of the operating companies rather than through separate subsidiary companies.

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