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Answers to three common questions regarding making EB-5 investments in troubled businesses.
What qualifies as a troubled business?
According to the U.S. Citizenship and Immigration Services (USCIS), a troubled business is, “one that that has been existence for at least two years and has incurred a net loss during the 12- or 24-month period before the priority date on the immigrant investor’s Form I-526.” Furthermore, the business must have incurred a loss of at least 20% its value or net worth (prior to the loss).
How do EB-5 investors fulfill the job creation requirements when investing in a troubled business?
EB-5 investors in troubled businesses do not necessarily have to create new jobs. Instead they may qualify through proving job maintenance. According to USCIS, EB-5 investors may fulfill the job creation requirement by, “show[ing] that the number of existing employees is, or will be, no less than the pre-investment level for a period of two years.” In other words, EB-5 investors in troubled businesses may count jobs saved or preserved toward the required 10 jobs.
Can an EB-5 investor in a troubled business qualify for the lower EB-5 investment amount of $900,000?
If the troubled business is located in a qualifying targeted employment area, an EB-5 investor may qualify for the lower investment rate of $900,000. A targeted employment area can be a rural area or an area with a high unemployment rate that is 150% the national average unemployment rate.
To learn more about the various EB-5 investment paths, or to get started with EB-5, fill out the quick free evaluation below.
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