Yes, a foreign national can make an investment in a family business. There is no prohibition against an EB-5 investor having a familial relationship with the owner of the business they invest in. As with all EB-5 investments, the investment must adhere to the EB-5 program’s rules and regulations.
If the EB-5 investor is making a direct investment, they must create a minimum of 10 full-time jobs. These jobs must be filled by authorized US workers for a minimum of two years. Previously established positions within the family business won’t count toward the job creation requirement; the investor must create new positions.
Furthermore, the investor must contribute the minimum investment amount, which is currently $1,050,000. The investment capital can originate from virtually any source, provided it is traceable and lawfully acquired.
On the other hand, for businesses located in a targeted employment area (TEA), the threshold investment amount is currently $800,000. A TEA is defined as either a rural town with a population of less than 20,000, or a city or town with a population greater than 20,000 and an unemployment rate that is at least 150% of the national average.
Direct EB-5 investors typically play a larger role in the daily management of the business they invest in. Therefore, the EB5 investor would be expected to be highly involved in the running of their family business.
In the meantime, the family business must be a qualified new commercial enterprise (NCE). In accordance with the United States Citizenship and Immigration Services (USCIS) Policy Manual, the NCE must have been established after November 29, 1990, or on or before the aforementioned date but then restructured in a manner that a new operation emerges or expanded so that the net value or volume of staff increases by at least 40%.
Finally, all prospective EB5 investors, including those looking to invest in a family business, are strongly advised to work with an immigration lawyer to create a coherent, compliant business plan that adheres to the precedent set by the court ruling Matter of Ho.
Provided all the above regulations are adhered to, there is no rule against a foreign national making an EB-5 investment in a qualified, lawful family business.