Can a foreign national transfer a business to the United States and invest in that business to qualify for an EB-5 visa?
Merely transferring a business to the United States and investing capital into that business will not qualify a foreign national for an EB-5 visa. Qualifying for an EB-5 visa entails investing in a new commercial enterprise (NCE) in the United States. This venture must generate a minimum of 10 full-time, long-term positions for authorized U.S. workers. Transferring a business and acquiring an EB-5 visa are both challenging and complicated endeavors; foreign nationals are strongly advised to seek counsel from industry experts before beginning the process.
Prospective investors may wonder if they can invest directly in an existing business. While this is permitted by United States Citizenship and Immigration Services (USCIS), investors should be aware that doing so makes it more difficult to demonstrate that the business is a true NCE.
An existing business can qualify as an NCE provided it was created after November 29, 1990, and fulfills one of the following criteria: either the addition of EB-5 investment funding contributes to a staff or net worth growth of at least 40%, or the original business is expanded and generates new businesses. For the latter option, the new business must differ significantly from the parent business in structure and premise. Surface-level tweaks in branding will not qualify the new business as an NCE.
Prospective investors should also note that the job creation quota is fulfilled differently by existing businesses. Generally, existing employment cannot be counted. If an investor wishes to count previously established positions, they would have to prove that they did not obtain any previous trademarks or other assets and that the business had collapsed prior to the infusion of EB-5 funding capital. The investor could also provide the number of working staff prior to the EB5 investment and demonstrate how the business will create the necessary number of new jobs while sustaining the existing positions.
If an EB-5 venture qualifies as a troubled business, this would allow investors to count existing positions toward their quota. A troubled business is defined as having operated for at least two years and having suffered a net loss of a minimum of 20% in the 1–2 years preceding the submission of Form I-526.