Questions and Answers > EB-5 Investments

What happens if an EB-5 business does not make a profit?

I am planning to invest in a transport business and apply for EB-5. If the business does not make a profit, will I be required to leave the United States? What if it suffers losses, but we still manage to maintain 10 employees? Would my EB-5 application be successful?

Answers

• Fredrick W Voigtmann

  Immigration Attorney

  Answered on March 16, 2016

  In order to receive a conditional green card in the EB-5 category, you must show that you have made a qualifying investment in a new commercial enterprise (NCE) that will create 10 full-time jobs for U.S. workers within two years. There is no requirement that the NCE be profitable right away, but there is a requirement that the business plan be comprehensive, credible, and feasible. USCIS might consider a business plan to not be feasible if there are no profits projected and no explanation as to where the additional investment/operating capital might come from. If your initial business plan projects no profit or a small profit, and that is credible and based upon verifiable data with sufficient detail, then your initial conditional green card probably will be issued. Even if the business does not make a profit over the next two years, but you sustain your investment and create the required number of jobs, you can still receive your permanent green card. If your business loses so much money within the two year conditional green card period that it is no longer viable and you cannot sustain your investment or create the jobs, then you likely would have to leave since your condition would not be removed.

• Salvatore Picataggio

  Immigration Attorney

  Answered on March 8, 2016

  There is no requirement for the business to be good. The requirement is to create 10 permanent full time jobs. If that can happen without turning a profit, then the I-829 petition may possibly still be approved.

• Jimena G Cabrera

  Immigration Attorney

  Answered on March 7, 2016

  The EB-5 visa program does not require that the new commercial enterprise should make a profit. The requirement is that the NCE must create full time employment for at least 10 qualifying employees within the two year conditional residence period. If your business manages to do so, you should be fine.

• John J Downey

  Immigration Attorney

  Answered on March 4, 2016

  The business need not show a profit. As long as the business is still active and the requisite jobs were created, you should be fine.

• A Olusanjo Omoniyi

  Immigration Attorney

  Answered on March 4, 2016

  In the event that a business does not make a profit, an EB-5 visa holder will not be required to leave the United States. In addition, a business owned by EB-5 visa holder may suffer losses just like any business. Generally, an EB-5 investment involves the risk of losing the fund(s) and that includes suffering losses in the business in which the fund is invested. The application can still be successful even if the funds are lost. In this particular scenario, if you suffered losses, but still employ ten workers, you should not have any problem securing permanent residence. Consult an EB-5 attorney on other details and various scenarios listed in your questions.

• Bernard P Wolfsdorf

  Immigration Attorney

  Answered on March 3, 2016

  There is no requirement that you make a profit.

• Ian E Scott

  Immigration Attorney

  Answered on March 3, 2016

  A well-capitalized company could certainly exist and maintain 10 workers, so this would not necessarily impact your application.

• BoBi Ahn

  Immigration Attorney

  Answered on March 3, 2016

  "Making a profit" is not a direct requirement for EB-5 immigrant investor petition processing or in the removal of conditional permanent residence, as long as it is a legitimate commercial enterprise with a viable revenue stream, and as long as it can still employ/maintain the requisite 10 employees, etc. As it is with any normal business, there are no guarantees of profitability, and EB-5 is not held to that standard as long as the job creation aspect is maintained. You will still have to show why a business that was created for profit is not showing profit, etc.

• Jinhee Wilde

  Immigration Attorney

  Answered on March 3, 2016

  The criteria for the successful EB-5 project is not the profit, but the creation of the requisite jobs. If your company has created at least 10+ full-time, permanent jobs based on your investment within the two years of you getting your conditional green card, you will be okay. As this is a direct EB-5, you company must show that the jobs are directly created with W-2s and I-9s of your employees.

• Debbie Klis

  Securities Attorney

  Answered on March 3, 2016

  The good news is that the EB-5 program does not track whether the business is profitable, only whether each investor creates at least 10 jobs. Thus, if the business remains in the "red" or suffers a loss, these do not cause your EB-5 application to fail, so long as the business can stay afloat while you are still in the adjudication process. Your instincts are correct, this employment-based visa program focuses on the creation and maintenance of the 10 jobs per investor.

• Dale Schwartz

  Immigration Attorney

  Answered on March 3, 2016

  In a word, yes. You should be OK as long as you continue to employ the required employees.

• Vaughan de Kirby

  Immigration Attorney

  Answered on March 3, 2016

  Sustaining a loss in and of itself will not necessarily impact your EB-5 application. However, this is a complex question you should review carefully with your investment immigration attorney.

• Raymond Lahoud

  Immigration Attorney

  Answered on March 3, 2016

  It is about the investment and jobs created, not necessarily profitability. Many companies do not make a profit when they are start up or the like. As long as you meet the investment and job requirements, you will be fine.