EB-5 for entrepreneurs and business owners

Many entrepreneurs already own businesses, and some plan to start or buy one in the United States. EB-5 treats a business investment as qualifying only when it meets several requirements together:

• A new commercial enterprise. The investment must be made in a for-profit commercial enterprise, generally a newly established one, or an existing business that is restructured or expanded in qualifying ways.
• Minimum capital. Currently $1,050,000, or $800,000 in a targeted employment area (TEA) or infrastructure project, for petitions filed on or after March 15, 2022 and before January 1, 2027. Adjusted amounts for later petitions had not been officially published at the time of writing. See the 2027 investment adjustment.
• At-risk capital. The money must be placed at risk for the purpose of generating a return, not simply held or reserved.
• Job creation. The investment must create at least 10 full-time positions (at least 35 hours per week) for qualifying U.S. workers.
• Lawful source of funds. The investor must document where the capital came from. See source of funds.

A profitable business that employs only a few people, or that the investor bought without adding new jobs, may be a sound commercial venture but still not meet these requirements.

In a direct or standalone EB-5 investment, the investor files Form I-526 based on capital invested in their own new commercial enterprise. Only direct jobs count: positions held by employees of that enterprise. Each investor must account for 10 full-time direct jobs. The investor and the investor's immediate family members generally do not count toward the total.

The investor must also be engaged in the enterprise through day-to-day managerial control or policy formulation, for example as an officer, director or managing member. Entrepreneurs who want hands-on control often find this appealing. It also means the investor bears the operational responsibility for meeting the job-creation requirement.

Direct cases typically rely on a detailed business plan at the petition stage showing how and when jobs will be created, followed by evidence that they actually were created when the investor later files Form I-829 to remove conditions.

A regional center is an entity designated by USCIS to sponsor EB-5 projects. Investors usually invest as limited partners or members in a new commercial enterprise associated with the regional center and file Form I-526E. Regional center investments may count direct, indirect and induced jobs estimated using reasonable economic methodologies. Under the statute, jobs estimated from construction activity lasting less than two years may generally satisfy no more than 75% of the requirement.

Designation of a regional center is not an endorsement of any particular project. USCIS approval of a project application (Form I-956F) concerns immigration eligibility, not the merits or safety of the investment. Entrepreneurs who are used to controlling their own businesses should note that a regional center investor typically has limited control over how the project is run.

The Regional Center Program is authorized through September 30, 2027. Future reauthorization is a matter for Congress. See regional center program authorization.

See regional center vs. direct investment for a fuller discussion.

For a direct investment, the investor generally needs records showing that real, full-time positions were filled by qualifying employees. Documents commonly used include:

• Payroll records showing employees, hours and wages.
• Form I-9 employment eligibility verification records for each employee.
• Federal and state employment tax filings and wage reports.
• Organizational charts and position descriptions.
• Evidence that positions are permanent rather than temporary or seasonal arrangements presented as full-time.

Requirements on which workers qualify, how part-time positions are treated and the time allowed for job creation are detailed in the USCIS Policy Manual (opens in a new tab). An immigration attorney and an accountant can help set up record-keeping from the start.

EB-5 capital must be at risk: committed to the business in a way that exposes it to potential loss in pursuit of a return. Money parked in an account, set aside without a plan to use it, or protected by a guaranteed return or a guaranteed buy-back arrangement may not meet this requirement. Loans used to fund the investment may be lawful sources if properly documented, but generally may not be secured by the assets of the enterprise being invested in.

Entrepreneurs sometimes compare EB-5 with the E-2 treaty investor visa. At a high level, they are different kinds of status:

India is not an E-2 treaty country, so Indian nationals generally cannot qualify for E-2 on the basis of Indian nationality. Because the treaty list and individual circumstances, such as a second nationality, matter, entrepreneurs should confirm their eligibility with an immigration attorney.

• EB-5 requirements and the EB-5 process.
• Regional center vs. direct investment.
• Project due diligence questions and EB-5 projects.
• Source of funds.

A qualified U.S. immigration attorney can assess whether a business plan or investment structure could qualify, and a licensed securities professional can help evaluate any offering. You can request a consultation to be connected with appropriate professionals.