- Direct investment
New Commercial Enterprise or Troubled Businesses
New Commercial Enterprise
An EB-5 investor can also create a “new” business by expanding an existing one. Two options that would fulfill this requirement are available to foreign investors: they can either expand the net worth of an existing business by 40 percent, or they can alternatively increase the number of employees by 40 percent.
Troubled Businesses
An investor may invest in a troubled business. USCIS characterizes a troubled business as one that has existed for at least two years and that has incurred a net loss over the 12- to 24-month period prior to the investor’s filing Form I-526. Further, USCIS quantifies this net loss, stipulating that it must amount to at least 20 percent of the business’s total net worth.For the investors who invest the troubled businesses, they do not need to increase 10 employment opportunities. They should maintain more than 10 positions or the number of full-time employees at the beginning of your business.
a. INVESTMENT OPTIONS
OPTIONS 1: Start your own business.
OPTIONS 2: Choose appropriate franchise projects and open franchise chains. Investors personally or employ professional managers to run their investment chain stores.
OPTIONS 3: To become a partner in another company and create employment opportunities by the company.
OPTIONS 4 : Acquisition of Troubled Businesses
b. Financial needs and job creation requirements:
Requirements for funds: Usually at least $1 million or $500,000, depending on where the funds are invested in the company. (From November 21, 2019: 1) investment in a TEA increased to $900,000; 2) The standard minimum investment amount increases to $1.8 million.
Requirements for job creation:
1) Jobs need to be created six months after I-526 approval.
2) At least 10 jobs: you don’t need to be in place immediately, you can gradually increase to the required number. (Troubled Businesses are quite special.They should maintain more than 10 positions or the number of full-time employees at the beginning of your business.)
c. Requirements for investors:
1) Actively participate in management; or
2) Participate in policy formulation.
d. Other qualifications:
1) A complete and practical business plan;
2) Manage the business personally or have the right to formulate company policies.
Advantage:
1) Self-control and transparency of their own funds;
2) Whether to get a permanent green card can be controlled by oneself;
3) After obtaining the green card, the enterprises can be sold to multinational corporations.
Disadvantages:
1) Need to participate in the operation by oneself;
2) Generally speaking, $1 million is needed (From November 21, 2019: 1) investment in a TEA increased to $900,000; 2) The standard minimum investment amount increases to $1.8 million.
- Regional Center
Foreign investors can alternatively make their investments in regional centers.Become a partner or shareholder in a project. The Regional Centre does not require investors to participate in corporate affairs management. In addition, indirect job creation meets the Immigration Bureau’s requirement of “creating 10 jobs”. Most investors will choose this option.
a. Investment options:
Investors are required to hand over funds to the project company of the Regional Centre for management.
b. Financial needs and job creation requirements:
$500,000; (From November 21, 2019: 1) investment in a TEA increased to $900,000; 2) The standard minimum investment amount increases to $1.8 million.
Job creation requirements: At least 10 jobs (jobs that can be indirectly created, such as those for equipment or service providers).
c. Characteristics of regional centers:
1) Regional centers can create jobs directly or indirectly.
2) 3000 visa quotas are reserved for immigrants who invest in regional centers.
3) Generally speaking, investors will invest in regional centers as limited partners, so investors have no right to participate in management or voting in regional centers.
4) If the regional center fails to implement the original business plan, investors will not be able to obtain a permanent green card.
5) The accounts of regional central enterprises are not disclosed.
Advantage:
1) No need for investors to manage in person;
2) Generally speaking, the amount of investment is $500,000. (From November 21, 2019: 1) TEA investment increased to $900,000; 2) non-TEA investment increased to $1.8 million;
Disadvantages:
1) The Regional Centre is responsible for the management and the accounts are opaque;
2) Investors have no management power;