I own a tech startup. Although my business is still at its early stages, I have obtained the proof of the concept prototype of a device which will be put into mass production. A foreign investor contacted me recently and would like to invest in my business in exchange for an EB-5 visa. But he was worried that since the business is not fully developed, doing so might incur issues to his application. Is it necessary to be at a certain stage of development before taking an EB-5 investment?
There is no requirement for a tech startup to be at a full development stage or any other stage for it to qualify for EB-5 investment, as long as you can show that it is a new commercial enterprise with plans for creating the requisite jobs, and that there is a business plan for the planned revenue and business development, etc.
There has to be a clear plan and detailed documentation to show this investment will directly or indirectly create jobs from this investment. You need to consult an expert and have a business plan in place that proves the jobs will be created based on this investment.
There is no definitive time table for a startup to enter EB-5 market. However, to get a good start, consult an EB-5 attorney who can help your project and assist in organizing a series of steps and lay a foundation for a successful EB-5 project. Also, the attorney can assist in seeing that you write a Matter of Ho-compliant business plan with at least five years projection detailing issues such as creation of a minimum of 10 jobs and addressing other issues that will help fulfill EB-5 requirements.
You should be at a level where nothing is left to the adjudicator's imagination in terms of the future growth of the business. Investment is only the start of the process. You also have to prove to a level of certainty that the business will hire 10 American workers in the foreseeable future. You need an extensive business plan with financial analysis and proposed hiring. You also need corporate documents to prove ownership interest, etc.
This would be direct investment for 1 million capital. The rule requires a 1 million capital investment and the fund must be use to finance the new enterprise, i.e., cost to secure the business leases or purchases, payrolls, inventories, R&D. Business plan projections will also be needed. Therefore, as long as the funds are in the business account and utilize for the investment of the business, then any stage will be sufficient.
No specific guideline, but you must show the business will support 10 full-time employees within a couple of years.
There is no particular requirement that the new enterprise be in any particular stage of development. However, with appropriate economic studies and otherwise, you must demonstrate that the startup will develop 10 full-time jobs for U.S. workers. If the investment is going to be $500,000, it is located in a targeted economic area (TEA). The risk to the investor is not so much that the business is not fully developed, but whether or not the business will be successful enough to develop and sustain the required number of jobs and deploy the minimum investment amount.
Shovel-ready is what we usually say for the more common real estate development projects, but for a tech startup, you need to be darn close to providing goods and services. You also need to turn the business into an "EB-5 project," which will require the assistance of an EB-5 attorney like those you can find on this site.
Most importantly, your business must have an EB-5 complaint five-year comprehensive business plan which will credibly support the minimum of 10 full-time positions (at least 35 hours/week for a full-time position). Otherwise, EB-5 investor will not qualify for an EB-5 green card if the requisite number of jobs is not created with EB-5 funds. You should consult an experienced EB-5 immigration attorney and EB-5 business plan writer. EB-5 investors must also be able to demonstrate if the EB funds originate from a lawful source of funds.
