I would like to invest half a million into a bakery that has existed since January 2013 and has suffered slight loss. Am I required to receive any percentage of shares? If so, is it 51% or more of the shares? Are there any other ownership requirements when investing in an existing business?
There are no ownership percentage requirements. If the bakery is within a targeted employment area, you qualify for the $500,000, otherwise the investment would be $1 million. Further, a troubled business must have a net loss exceeding 20 percent in the last two years of operation, and your investment must increase the business or number of jobs by 40 percent.
Yes, you are required to receive ownership interest. While there is no requirement as to how much, as a lot of factors play into that determination, a larger ownership generally makes the case stronger.
There are no specific ownership requirements, but making an equity investment, by its nature, means that you will own some percentage of the new commercial enterprise. There is no majority ownership requirement. As long as you invest the required amount of capital and create or maintain the 10 full-time jobs, it should qualify (assuming all other statutory and regulatory requirements are met). You should consult with an experienced EB-5 immigration attorney to advise you on the details.
There are no specific ownership requirements for investing in an existing business for EB-5 investors. As long as the amount you are investing is adequate for EB-5 rules of investment which are: 1) you must invest either a minimum of $500k for an enterprise in a rural area or $1 million in an enterprise located in urban area; 2) the money being invested must be from legal or lawful source(s), and 3) the investment must produce a minimum of 10 jobs, you will be fine. In your situation, your questions will be better resolved through negotiations with the current owner(s) of the bakery business to address at a minimum the following issues: 1) the percentage of the business you either want or can be granted; 2) what your planned $1 million investment would represent in the capitalization of the bakery business; 3) whether your investment will meet the three EB-5 requirements stated above. How you structure your investment with the current owner(s) of the business requires expert opinions of investment, corporate and immigration attorney(s). Just in passing, since this business has a history of having "suffered slight loss," be on notice that like any investment, your planned EB-5 investment is always considered to be an at risk venture. If you need further information, feel free to consult us.
Before you invest in this business, you should take into account several requirements that are needed for the EB-5. The first is that you have to make sure that the business is located in a rural area or in a targeted employment area. If it is not, the required investment is $1 million. Second, you need to make sure that the business has 10 direct full time employees or that you have the possibility of having them in 2 years. Third and most important requirement, in ordered to be considered a troubled business, you have to demonstrate that the business has a net loss for 1 or 2 years exceeding 20% of net worth. If you have any questions, please do not hesitate to contact me.
Based upon EB-5 rules and regulations you may own less than 50% of the existing business, e.g. you may own as little as 1%. There is no requirement to own a certain percentage.
There is no ownership percentage requirements. However, as this is a direct investment rather than through a limited partnership through a regional center, you should show that you have enough share for an operational or policy direction control of the business. Also, make sure that the business is located in a "Targeted Employment Area" that has more than 150% of national unemployment, which means the area should have about 12% unemployment within last 12 months in order to qualify for $500,000 investment threshold instead of $ 1 million required. The other exception to the $1 million investment rule is the rural area of less than 20,000.
Your ownership interest itself would depend on a variety of factors (other owners, mainly), but there is no requirement for a percentage of ownership that I am aware of. More important is showing that the investment will be used for business activities that will create the required number of jobs, and complying with the other regulations for existing businesses.
