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Is it important for an EB-5 investor to show that the direct investment is making money?

I have a friend who invested in a small business several years ago and applied for EB-5. Although his business did create 10 jobs during the two years of conditional residency, the business performance was not good and he was losing money during the two years. Then his I-829 application was rejected. Now I am considering participating in this program with a direct investment. I am wondering if I should pay special attention to the performance of the business in order to have my application approved?

Answers

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    While it is the goal of nearly every business to be profitable, there is no EB-5 legal or statutory requirement that the business makes money. The requirements to remove conditions are that the investment was sustained at risk and that the requisite number of jobs were created. EB-5 investors who meet those requirements should have their I-829 petitions approved and their conditions removed.

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    Daniel A Zeft

    Immigration Attorney
    Answered on

    The new commercial enterprise in a direct EB-5 case does not need to make money.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    There is not requirement that the commercial enterprise be making a profit; however, it needs to demonstrate that it is a viable business capable of the requisite 10-job creation and maintenance of the jobs, etc. As long as the business is operational, profit is not necessary.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    While what happened to your friend is unfortunate, not all EB-5 project results in failure and thus, do not draw any analogy from what happened to your friend. Instead, make sure you put together a good business plan that is Matter of Ho-compliant, which is likely to result in compliance with EB-5 requirements. In most cases when an I-829 is rejected, it is an indication that the EB-5 requirements that must be met to justify an approval of I-829 hare not been fulfilled. Advisably, prior to proceeding on your plan and with the experience of your friend, consult an EB-5 attorney to ensure appropriate planning is done.

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    Barbara Suri

    Immigration Attorney
    Answered on

    The requirements to lift the condition are evidence relating to the commercial enterprise, investments and job creation, as follows: business throughout the period of conditional permanent residency, reasonable time, 10 full-time jobs for qualifying employees. I don't see where the regulations specifically state that the business must be making money. Regardless, it is my opinion that always one should pay special attention to the performance of the business.

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    Marko Issever

    EB-5 Broker Dealer
    Answered on

    The main requirement is the 10-job creation. The business does not have to be consistently profitable but it should be able to stand as a viable going concern. Otherwise, the jobs that were created cannot be sustained. I am not sure why your friend's I-829 was rejected, but I have a feeling it was because they felt that the business will soon go totally under and not because it was not doing as well as it was initially intended. I cannot help but ask you why you would like to invest in this venture and potentially lose your funds as well. There are plenty of direct- and regional center-based investment opportunities in the marketplace today that you could choose from. Just a thought!

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    Charles Foster

    Immigration Attorney
    Answered on

    One would obviously consider the performance of the business before making a direct investment, or, for that matter, an investment in a regional center. Not only do you want the approval of your I-526 petition and to obtain your conditional green card, but also the approval of your I-829 petition to remove conditions, and have a reasonable prospect of recouping your investment with a reasonable return on your money. The fact that the business did not make money, in and of itself, should not necessarily affect the eligibility to have the I-829 petition approved.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    The business does not have to be profitable. The key is to make sure the jobs were created.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    When you submit a direct EB-5 I-526 petition, it should be supported by a five-year comprehensive EB-5-compliant business plan that should describe the intended job creation timeline and financial projections. It is not required that the business be profitable but it should be viable to support the minimum required EB-5 jobs. EB-5 funds you invest should be used for the requisite job creation. Please hire an experienced EB-5 immigration attorney to assist you and competently prepare your case.

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    Dale Schwartz

    Immigration Attorney
    Answered on

    There is no requirement that the business be profitable. But if it fails before the conditions are removed, that will cause problems.

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    Belma Chinchoy

    Immigration Attorney
    Answered on

    I wouldn't be sure that the I-829 was denied because the business was operating at a loss. A direct EB-5 business does not need to be profitable at any specific level; however, a business operating at a loss - year after year - will not be considered feasible.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    It would be better to have the business be able to pay all of those 10 workers. Adds to the credibility of the application. Without reading your friend's case I have no idea exactly why it was rejected (it seems that it may have been because of financial performance, but I can't know that for sure). Every case is different.

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    Stephen Berman

    Immigration Attorney
    Answered on

    If the business is not profitable, there is a danger it will not create the jobs and a danger that one would lose the money one invested.

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    Phuong Le

    Immigration Attorney
    Answered on

    There is no requirement that the business is profitable. Just show that it continues to be viable and can continue to operate/employ its workers.

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