Questions & Answers

Would an e-commerce business be eligible as an EB-5 direct investment?

My friend has an online furniture retail company. The company was created in 2005. I would like to make an investment in his business and apply for EB-5. Would this comply with the requirements of USCIS? If not, how should we structure the business to make it eligible?

Answers

• A Olusanjo Omoniyi

  Immigration Attorney

  Answered on July 9, 2019

  The idea of operating an e-commerce web-based business for EB-5 may appear novel but it is feasible. However, be prepared to put together a Matter of Ho-compliant business plan that shows this direct investment entity can be operated successfully and the investment will fulfill all EB-5 requirements, such as creating a minimum of 10 jobs within two years, etc. One other issue is that this business has been around 2005, which seems to suggest it is successful for being around that long. Advisably, prior to investing, plan do necessary planning.

• Julia Roussinova

  Immigration Attorney

  Answered on June 11, 2019

  It may be problematic to invest into an existing business. First, to qualify for a lower investment threshold, the enterprise must be principally doing business in a targeted employment area. Second, your EB-5 capital must be used to create at least 10 full-time new positions unless the enterprise is a troubled business or qualifies under 40 percent expansion rule. Have a comprehensive consult with an experienced EB-5 immigration attorney.

• Lynne Feldman

  Immigration Attorney

  Answered on June 10, 2019

  I would recommend having a physical office of some kind, but it could work.

• Salvatore Picataggio

  Immigration Attorney

  Answered on June 10, 2019

  Presuming that the company has warehouse and shipping staff, logistics staff, customer service staff, etc. all within the business (that is, not all remote), then it's possible! There's much more to it than this, so please consult with an EB-5 attorney.

• Hassan Elkhalil

  Immigration Attorney

  Answered on June 7, 2019

  If the business meets the USCIS requirements and the employment creation, then it may be an option.

• BoBi Ahn

  Immigration Attorney

  Answered on June 7, 2019

  Based on the information you are providing, I'm not sure if the business would have the capability of creating 10 new full-time jobs from your investment, which is one of the requirements for EB-5. Also, you are required to be an active investor either managing the day-to-day operations of the business or policy, etc.

• Anastasia White

  Immigration Attorney

  Answered on June 7, 2019

  There are no limitations on a type of business/industry. However, please keep in mind that the EB-5 investment must create 10 full-time jobs for U.S. workers.

• Bernard P Wolfsdorf

  Immigration Attorney

  Answered on June 7, 2019

  Investing in an existing business is very difficult and it is extremely hard to show your investment created 10 new jobs. If it is a troubled business that has had 20% loss in the past 12 or 24 months, then you can save 10 jobs, but otherwise you have to show your purchased an existing business and simultaneous or subsequent restructuring or reorganization, such that a commercial enterprise results and that you have expand the business such that a 40% increase either in the net worth or the number of employees result but basically no less than 10 new employees must be added.

• Dale Schwartz

  Immigration Attorney

  Answered on June 6, 2019

  Sure, but it must hire 10 full-time employees.

• Sally Amirghahari

  Immigration Attorney

  Answered on June 6, 2019

  Generally, an existing business is not a good model to be utilized for an EB-5 investment visa since it must create 10 new full-time employees. I suggest you consult with an immigration attorney who is familiar with the EB-5 immigrant investment visa setup prior to doing anything. This can become very complicated if it is not done correctly from inception.

• Marko Issever

  EB-5 Broker Dealer

  Answered on June 6, 2019

  Not immediately. Since the business was formed after Nov. 29, 1990, it certainly qualifies. However, when buying an existing business, you need to either restructure or reorganize it. This way it will be classified as a new commercial enterprise or, alternatively you could also expand it by increasing its net worth or number of employees by at least 40%. In other words, you need to be able to create new jobs. There is no restriction on the industry. That said, EB-5 eligibility is quite complicated. You need to write a Matter of Ho-compliant business plan and make sure that you have TEA designation if you are only planning to invest $500,000, as opposed to the standard $1 million.

• Phuong Le

  Immigration Attorney

  Answered on June 6, 2019

  Your obvious problem before you continue any further is whether the online furniture company can hire 10 full-time employees. One of the key ways online businesses are profitable are the lack of employees. Might want to ask some additional questions before you go any further.

• Charles Foster

  Immigration Attorney

  Answered on June 6, 2019

  Yes, you can make a direct EB-5 investment in an e-commerce business, provided that it is EB-5 compliant from a statutory and regulatory point of view. You would have to show that as a result of the investment, you had invested the required $1 million, or that the business is located in a targeted employment area (TEA), and you would have invested $500,000 and also that you establish as a result of the investment, 10 new jobs for U.S. workers.