Questions and Answers > EB-5 Requirements

Why is it difficult to get an EB-5 troubled business approved?

Why is it so hard to get a troubled business application approved? I was advised not to go this route and am perplexed. It seems simple enough based on the laws; if the business can show that it has the required accounting loss and then preserves the jobs, I would think the application would get approved.

Answers

• Reza Rahbaran

  Immigration Attorney

  Answered on February 11, 2013

  It will depend on the proposed business you have in mind. For further information please contact Rahbaran & Associates.

• Clem Turner

  Securities Attorney

  Answered on February 5, 2013

  There is very little precedent for this type of EB5 transaction. Therefore, lawyers are unsure how USCIS will determine certain regulations. USCIS has not always interpreted the EB5 Rules in a manner that lawyers have expected. As a result, lawyers are reluctant to give assurances and charge a fee only to have a very disappointed client at the end of the process.

• Shahzad Q Qadri

  RC Creator

  Answered on January 28, 2013

  It Is not complex, generally clients are unable to provide documentation that is needed to get it approved, hence easier to just do a brand new business.

• Ed Beshara

  Immigration Attorney

  Answered on January 24, 2013

  An EB-5 troubled business can be marketable to investors as the jobs already exist and are saved. There may not be any issues associated with the employment creation requirement. The project should now market the viability of the business and current operators.

• Taher Kameli

  Immigration Attorney

  Answered on January 24, 2013

  It is not difficult to get a Troubled business approved. However, you need to provide a lot of financial information to the US government about the troubled business.

• Michael B Dye

  Immigration Attorney

  Answered on January 24, 2013

  Special rules govern investments in "troubled" businesses. Part of the "difficulty" in receiving approval for "troubled" businesses rests on the maintenance of the required number of jobs. Since the business is "troubled" - the investor may lose his or her conditional residency status if the business goes under within the two year post-investment period.

• Lei Jiang

  Immigration Attorney

  Answered on January 23, 2013

  It''s more difficult, but not un-doable. USCIS does not see a lot of this kind of applications. If they are skeptical, the burden is on you.

• Roberto Ortiz

  Immigration Attorney

  Answered on January 23, 2013

  The reason that a troubled business EB-5 is difficult is because it placed under higher scrutiny by USCIS. USCIS wants to make sure that the business in reality was troubled. Further, there other factors that USCIS looks into to review this type of petition. Thank you.

• Larry J Behar, Esq

  Immigration Attorney

  Answered on January 23, 2013

  You have received good advice. While it appears that the statute is simple and clear, the arbitrary nature of decisions made by USCIS make use of the troubled business complex. Tax returns, financial statements, job losses are all only part of the considerations which USCIS reviews and can make subjective opinions on their validity.

• Denyse Sabagh

  Immigration Attorney

  Answered on January 23, 2013

  I think that is accurate.

• Philip H Teplen

  Immigration Attorney

  Answered on January 23, 2013

  First, all EB-5 applications are far more complex and reviewed far more aggressively than a simple reading of the law reveals. In terms of a troubled business, this is further complicated as the accounting must be carefully supported and since most small business did not have audited financials, this is a substantial task since the accounting is based upon books created by the business. However, such applications are certainly possible. I will be happy to review the specific case to be better able to provide guidance.

• Boyd Campbell

  Immigration Attorney

  Answered on January 23, 2013

  Because no one wants to invest in a troubled business.

• Jeffrey E Campion

  Immigration Attorney

  Answered on January 23, 2013

  I think the answer may lie in whether you are the investor or are looking for the investor. Many attorneys may really be trying to tell you that the likelihood of finding an investor for that type of business is slim.

• Julia Roussinova

  Immigration Attorney

  Answered on January 23, 2013

  Troubled business applications do get approved. It is important to work with a qualified EB-5 immigration attorney and a licensed CPA to prepare your case appropriately. These applications do require accounting/financial expertise.

• Steven Anapoell

  Securities Attorney

  Answered on January 23, 2013

  It is not that it is difficult to get approved. The issue is that most companies are pursuing new endeavors and not looking at troubled businesses; hence, not a lot of precedent with USCIS for guidance. Also, investors are leery about investing in troubled businesses.

• Michael E Piston

  Immigration Attorney

  Answered on January 23, 2013

  If the business that has been in existence for at least two years, has incurred a net loss for accounting purposes (determined on the basis of generally accepted accounting principles) during the twelve or twenty-four month period prior to the priority date on the alien entrepreneur''s Form I-526, and the loss for such period is at least equal to twenty per cent of the troubled business''s net worth prior to such loss, the business employs at least 10 full time legal U.S. workers and can be expected to maintain at least that employment over the next 3 - 3 1/2 years, then a person who invests $1,000,000 in such a business ($500,000 if it is in a targeted employment area) should qualify for EB-5 classification. If in fact the prospective business met this standard then it is difficult to comment on why the advice was given not to go this route. Perhaps you might want to consult with a different attorney.