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EB-5: Engaging in a New Commercial Enterprise

The immigration regulations specifically state that Alien Entrepreneur EB-5 visas can be granted to foreign investors who will be "engaging in a new commercial enterprise." What constitutes a new commercial enterprise is fairly well established through the regulations and precedent. Obviously, as the phrase clearly states, it must be new. The regulations say that the investor must have begun investing after the date of the Immigration Act of 1990, or November 29, 1990. And, of course, it must be commercial, or for-profit. Noncommercial activities or nonprofit organizations will not be able to qualify. However, just about any lawful entity formed with the intention of making a profit can qualify. That would include corporations, partnerships, sole proprietorships, and any other number of for-profit entities. As long as the $1,000,000 (or, sometimes $500,000) investment occurs and 10 full-time jobs will be created, there are any number of commercial enterprises that would qualify. If you desire to file for an Alien Entrepreneur EB-5 visa application for permanent residence, contact us. Our lawyers have successfully represented clients in EB-5 visa processing. Not many immigration lawyers can state the same. Call us for an evaluation of your new business enterprise.

Perhaps the most obvious method of engaging in a new commercial enterprise is to create an original commercial enterprise. It is important to note, though, that the regulations require a foreign investor to engage in, but not necessarily to create, a new business. Often times the EB-5 investor will be creating a brand new organization or entity. However, there are several other ways to fulfill this requirement. For example, the regulations specifically allow an investor to invest the required funds into a limited partnership even if the partnership already existed. There are a couple of key points to note about this. First, the investor must actually be a limited partner as defined in the Uniform Limited Partnership Act. Simply having the title of partner or limited partner is insufficient. Next, if a partnership is made up of multiple foreign nationals seeking EB-5 status, in addition to each needing to have the investment amount, each individual investor must be able to prove a legal source for obtaining those funds. And finally, if the partnership has 3 EB-5 hopefuls, 30 jobs must be created. In other words, each limited partner investor must show the creation of 10 full time jobs.

The investor might also buy and restructure an existing business. The key word here is "restructure" since simply buying and running an existing business will not be sufficient even if the legal form of the business is changed. It is important to remember the need for both a "new" enterprise and 10 new full-time jobs. Restructuring a business is not the only way to change an existing business into a new enterprise. An investor might also buy a business and expand it. The expansion must lead to at least a 40 percent increase in either the business' net worth or in the amount of employees employed by the business, so, the larger the existing business, the tougher that it will be to show that 40 percent increase. This might also mean that, depending on the size of the business, there could be a requirement for many more than the usual 10 jobs.

Finally, the investor is required to "engage" in the new commercial enterprise. This is generally understood to mean that the investor is managing the enterprise, either through daily supervision and decision making, or at least through regular policy formation. The investor can also be a corporate officer or board member in the company.

It can be daunting to try and decipher all of the immigration regulations alone. When one small phrase like "engaging in a new commercial enterprise" contains so much information, it is important for a potential immigrant investor to speak with someone who knows and understands the laws and regulations. The attorneys at The Law Firm of Shihab & Associates, Co. LPA are experienced in all aspects of immigration law and would be happy to sit down with you and explain the entire process along with all of your rights and options. Whether you are an alien entrepreneur, an existing business, or the family member of a foreign national, please feel free to contact us at the law office nearest you and put us to work for you on any of your immigration needs.

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