Immigrant Entrepreneurs: Proper EB-5 Investing

The Immigrant Investor Program was created back in 1990 to provide targeted stimulation the U.S. economy. What on the surface looks as simple as a standard business investment in return for the EB-5 Visa and status as a conditional permanent resident, is actually a complicated program with a high amount of communication with USCIS (United States Citizenship and Immigration Services) and regional agencies. If you're looking at the EB-5 program to get your U.S. visa, you should know about the requirements, how to find a business, and how to properly invest in it in this three part series.

Review our last article to learn about finding the right business to invest in and the resources available to you. In the article before that we talked about the requirements of the EB-5 program, including the requirements of a commercially new enterprise, job creation and preservation, and the amount of capital investment needed. This time, we'll talk about once you've found the right business, how to invest in it properly to meet requirements for the EB-5 program.

Meeting Requirements of the EB-5
Once you're gained admission into the United States as a conditional permanent resident, you have two years to expand a new commercial enterprise or revive a troubled business. During this time you must collect and maintain evidence of both your investment and the positive impact it has done.
Job Creation or Retention
One of the major goals behind the program is the creation of jobs in the United States, or to retain jobs that would otherwise have been lost. You have to provide documentation to support that you have hired on these employees, or in the case of retention, that you have maintained employees whose jobs were at risk at wages at or above pre-investment levels. Supporting documentation includes:

  • Payroll Records
  • Employee tax documents (W-2s or similar)
  • Employee form 1-9

Tracking Your Capital
You must be able to track your money: not only how you invested into the business, but also where your money has come from. You must keep physical and electronic evidence that you have, or are currently, investing the required amount of capital ($1,000,000 invested or $500,000 in a Targeted Employment Areas), and must be able to verify this money is your own (not a loan) and obtained legally. Evidence of investment general takes on the form of:

  • Invoices and Receipts
  • Bank Statements
  • Contracts
  • Business licenses and permits
  • Audited financial statements
  • Tax returns and tax statements

Going Beyond EB-5 Requirements
Of course, as an entrepreneur you want to see your business not only meet the requirements for your visa, but to succeed as a company. The best way to establish this is developing a strong working relationship with the president/CEO of the company: create a business plan around your investment with them to maximize the effect of the capital. If you both aren't sure where to start, have a valuation performed to reveal weak points and money sinks, and assets that should be replaced in the business.
If you're interested in learning more about how the EB-5 Immigrant Investor program works, contact George & Company. Experts in business brokerage, investments, and mergers and acquisitions, we can help you plan, find, and properly invest in businesses in the New England area.