How can a holding company be structured to qualify for EB-5 direct investment?

The EB-5 option works best when the investment is in a new U.S. business, rather than in existing businesses with existing jobs.

If you invest in a holding company which acquires another business with an existing 10 jobs, and you make the minimum investment, you may not be able to count these particular jobs, not because they are in a subsidiary, but because they were existing jobs. You have to show that, as a result of the investment itself, that 10 new jobs for U.S. workers were created.

Yes, you can do so. The holding company is the job-creating enterprise. However, everything must be documented in the business plan for the business. Advisably, consult an EB-5 attorney for proper planning.

You have to look to see if your investment creates a "new commercial enterprise" and if 10 new jobs are created by the investment. The governing regulation for EB-5 immigrant investor, 8 CFR 204.6(h), states three possibilities for establishing "a new commercial enterprise": 1) Create a new/original business; 2) Buy an existing business and restructure/reorganize it; or 3) Expand an existing failing business and increase it by 40 percent net worth or number of employees. If you want to take credit for the existing employees, you may qualify if you can show either No. 2 or 3.

No, you have to create 10 more new jobs.

The holding company must wholly own (100 percent) the entity that will create the jobs. That way, both companies are considered part of the same new commercial enterprise ("NCE"). Also, keep in mind that existing jobs cannot be counted unless the NCE is "new" and a "troubled" business, as these terms are defined in the EB-5 law/regulations. Otherwise, the existing business that becomes part of the NCE must create 10 new full-time positions per EB-5 investor.

A holding company set up can work for direct EB-5 as long as there are operating entities (or one entity) under the holding company. Acquiring an existing business presents a problem for EB-5, as existing jobs do not count toward EB-5 jobs.

The investment will need to create 10 new jobs. The existing jobs would not count toward the 10-job requirement.

You will need to create a new commercial enterprise. Multiple enterprises can be part of a holding company and the aggregate of job creation can be used. I recommend you consult with a qualified EB-5 investment attorney who will be able to properly advise you.