What criteria must an existing company meet to qualify as a new commercial enterprise (NCE)?

An existing business can qualify as a new commercial enterprise (NCE) under the EB-5 program provided it meets one of two criteria. Either 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%.

In accordance with the Policy Manual of United States Citizenship and Immigration Services (USCIS), an NCE can be defined as any of the following profitable, lawfully conducted operations: a sole proprietorship, limited or general partnership, holding company, joint venture, corporation, business trust, or any publicly or privately owned entity. A parent company and its subsidiaries would also be considered an NCE, provided each daughter company is a profitable, lawfully conducted operation. This definition excludes noncommercial operations, including purchasing and owning a personal residence.

Another possibility for an existing business to qualify as an NCE is if it is considered a “troubled business”. To meet the criteria for a troubled business, the business must have

  • already existed for a minimum of two years,
  • experienced a net loss in accounting terms during the 12 to 24 months period preceding the filing of Form I-526, and
  • experience a net loss during this period of at least 20%.

To adhere to EB-5 regulations, the prospective investor must ensure they meet the job creation requirement by proving the continuation of at least 10 full time jobs within the troubled business. These jobs can include preexisting positions that the investor preserves, as well as new jobs that the investor creates with their EB5 investment capital. This requirement is applicable to both direct EB5 investors and regional center investors.

To qualify as an NCE, an existing business must meet USCIS criteria for an NCE or a troubled business.