How might an EB-5 direct investor create two businesses in separate locations using EB-5 funds?

It is possible, although much more complex, to create two separate businesses using a direct EB-5 investment. The best way to do this would be to create separate companies within a larger, parent company. In other words, a corporation could be created and serve as the new commercial enterprise (NCE) required by United States Citizenship and Immigration Services (USCIS). A separate entity could then be created as a subsidiary of the NCE. It must be wholly owned by the NCE and, if it is the recipient of the EB5 investment funds, it must create the required jobs.

Every EB-5 investment project, whether direct or regional center–sponsored, must create a minimum of 10 jobs to comply with USCIS regulations. Job creation is the cornerstone characteristic of the EB-5 Immigrant Investor Program, serving as the inspiration behind its creation in 1990. Congress wanted to spur economic growth and has done that by granting U.S. permanent resident status to foreign nationals who invest in qualifying EB-5 projects. Projects that are located with a targeted employment area (TEA)—an area designated as one with high unemployment or one in a rural area—have lower investment thresholds to promote greater job creation. As of March 2022, a project located within a TEA has a minimum investment amount of $800,000, and projects outside of TEAs have an investment threshold of $1,050,000.

For investors wanting to create more than one business with their investment, they must ensure that each subsidiary of the NCE in which they invest creates jobs. In addition, if the NCE is located with a TEA, the subsidiary must also be within the TEA. It is possible to create subsidiaries that are not located within the TEA in which the parent company is headquartered, but then the investor would not be able to enjoy the lower investment amount for a project in a TEA.

Given the complexity of creating more than one business with a direct EB5 investment, it would be in the investor’s best interest to acquire the services of an immigration attorney who can guide them through the process from start to finish.