What are the biggest challenges of using an existing business for EB-5?

In theory, while you can certainly use a currently existing business and expand it for EB-5, in reality, it rarely occurs because it requires quite a bit of growth and resources. The regulations require that existing businesses must expand by 40% (net worth, employees, etc.), which is an exceedingly difficult benchmark for most businesses to hit, much less sustain. While your current business may be successful and growing, take a closer look at your projections to see whether you can meet the 40% increase requirement. If so, by all means.

Usually sourcing the income is difficult if you did plan EB-5 from the beginning.

While any business created after 1990 is technically considered "new," the language in the policy says that the investment "will create" jobs in the two-year period of conditional residency. For this, those jobs will already have been created, so you may need to show 10 additional jobs to be created.

If the state of Florida has recently certified that your company is located in a TEA, then you would have exceeded the current investment minimum requirement. Your challenges will be conducting an accounting of your company&#39s financials over the last three years to show that you have not withdrawn your capital investment. You will be documenting the lawful source of your funds utilized to capitalize the company, as well as the existing jobs. You will want to act soon, as new regulations may soon affect not only the minimum investment amount, but also the TEA determination process. If the regulations come into effect, then the Florida&#39s determination of TEA status will no longer matter.

Since the company was founded three years ago it will be classified as a new commercial entity. Moreover, since you are the founders of the business you should be able to achieve your objective. Make sure to confirm the TEA classification for your project&#39s location. The fact that you have already created more than 10 full-time positions is also a good fact. Among other things, you will still need to show that the funds you invested in the company were lawfully obtained.

First, your business must be in a designated targeted employment area (TEA) to qualify for a lower EB-5 investment threshold, currently at $500,000. Otherwise, the minimum current investment for a direct EB-5 case is $1 million. Second, your investment must have created the minimum 10 full-time permanent positions. A full-time position must be at least 35 hours a week. Proof of job creation can be documented with employment records, W-2s, I-9 records. Third, your EB-5 investment funds must be traced to a lawful source of funds and you cannot count retained earnings for EB-5 purposes. If you meet the above criteria, you should consult an experienced EB-5 immigration attorney to discuss your case in more specific detail and hire him or her to competently prepare your I-526 petition as soon as possible, as EB-5 investment amounts are expected to increase significantly either through legislative process or regulatory reform.

Based on info provided, your chances are great. The biggest challenge is likely to be the sourcing of the funds you invested three years ago.

You may be able to use your existing business and the related investment, provided it otherwise meets all the requirements since you invested more than $600,000. Unless you have a plan to invest at least a minimum of $1 million, you&#39d have to show that your enterprise is located in a targeted employment area (TEA). With 15 employees, you meet the minimum employee test and requirement of creating 10 jobs for U.S. workers. The sooner you file the better, because either through legislation or more likely through regulatory reform, the minimum investment amount could be substantially increased.

If you want to invest in an existing business, you will need to either invest and change a troubled business, which is one that has net losses in 12 to 24 months of operation or expanding and existing business. The option to expand an existing business for an EB-5, the foreign investor must accomplish a substantial change in the net worth of the business or in the number of employees. A "substantial change" means at least a 40 percent increase in the enterprise&#39s net worth or an increase in the number of employees hired. The potential challenge in meeting the "substantial change" requirements may mean that you will have to create more than 10 jobs, depending on the original size of the existing business. You will also have to put an additional $500,000 to expand your business. You cannot now file an I-526 based on your existing business as is now stands. You will have to make significant changes to the business or expansion as well as a significant capital contribution.

Your investment in a start-up three years ago should qualify as an EB-5 vehicle. No real challenges except proving the money you invested was from legal sources. We have successfully done many similar cases.