AT-RISK INVESTMENT IN AN ACTIVE BUSINESS
SCHEDULE A CONSULTThe EB-5 program requires that all of the capital invested in the new commercial enterprise be subject to the risk of profit or loss from the active operations of the business. This business risk is essential to the entrepreneurial spirit of the EB-5 program. USCIS does not allow EB-5 investments that are passive investments, such as purchasing U.S. Treasury Bills, or investments in the stock market, or purchasing land to own for its future potential to increase in value. By the same rule, USCIS does not allow the new commercial enterprise to guarantee to the EB-5 investor the return of the capital invested.
Investment projects have developed many solutions for reducing the business risk of investments while offering investments that comply with the entrepreneurial requirements of the EB-5 program.
Any business qualifies for EB-5 investment. Examples of successful EB-5 investments include hotels, restaurants, real estate development, hospitals, medical services businesses, assisted living facilities, retail stores, logistics parks, and high-technology start-ups.
THE INVESTOR MUST HOLD A MANAGEMENT OR POLICY-MAKING ROLE IN THE NEW COMMERCIAL ENTERPRISE.
This requires, at a minimum, that the investor form part of the group of people who have the ability to have a role in fundamental changes in the business of the new commercial enterprise. Typically, this requirement is satisfied in direct EB-5 investments if the investor is appointed to as a manager or direct of the new commercial enterprise, or, in an EB-5 investment sponsored by a Regional Center, if the investor is a limited partner or owner of a limited liability company with the capacity to vote on fundamental changes to the company’s business.
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Donoso & Partners provide assistance with review and advice regarding eligibility for visas to the U.S. or Canada.