What does 40 percent growth mean in an existing EB-5 business?

The requirements state that there be a 40 percent increase either in the net worth, or in the number of employees, so that the new net worth, or number of employees amounts to at least 140 percent of the pre-expansion net worth or number of employees.

Your scenario may not meet the financial requirement(s) for EB-5. If your application is filed as described, USCIS will likely issue a Request for Evidence asking for additional information. Do more due diligence on what the valuation of the business in question is and determine what it is really worth before proceeding further. Consult an EB-5 attorney before proceeding further.

The concept of expansion in EB-5 has to do with whether the new commercial enterprise (NCE) is "new;" it has nothing to do with the required investment amount or job creation amount. Forty percent expansion refers to the number of employees or net income, but it does not alleviate the need to invest the required amount of capital (which in your example appears OK because the NCE is in a Targeted Employment Area) and it does not alleviate the need for the NCE to create 10 new jobs for qualifying U.S. workers; in your example, the NCE would create only four new jobs and that is not enough.

This has always been a confusing area under EB-5, in purchasing an existing business (initially created after Nov. 29, 1990). You need to show that the investment has increased by 40 percent either the net worth of the business or the number of employees. You are still required to hire 10 new employees before you can remove the conditional residency.

The existing eight employees will not count towards your EB-5 unless you are investing in a troubled enterprise and saving those jobs. You have to create 10 new jobs.

While this rule appears viable, very few lawyers will accept this case as there are few, if any, victories. Be careful.