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Case Study: Successful EB-5 Visa Investment in Troubled Businesses

Case Study: Successful EB-5 Visa Investment in Troubled Businesses

The EB-5 Immigrant Investor Program offers foreign investors the opportunity to obtain U.S. permanent residency by investing in a new commercial enterprise (NCE). EB-5 regulations state that the NCE must create at least 10 full-time, permanent new jobs for qualifying workers.

However, it's not widely known that investing in a troubled business can also qualify for an EB-5 visa. In this case study, we delve into a remarkable success story of an EB-5 visa investor who capitalized on the opportunity to invest in a troubled business. Our experience showcases how a well-executed business plan, focused on job preservation and creation, can yield favorable outcomes in the complex world of U.S. immigration.

The Challenge: EB-5 Investment in a Troubled Business

Our client, a foreign investor, aspired to secure U.S. permanent residency through the EB-5 Immigrant Investor Program. A unique twist to their case was their intent to invest in a troubled business. This unconventional approach, though less explored, presented a promising opportunity.

Defining Troubled Business Criteria

To embark on this venture, the immigration attorney in charge of the case needed to ensure that the business in question met the USCIS criteria for a troubled business. These requirements included:

• Two Years of Existence: The business must have been in operation for a minimum of two years, a foundational stipulation to qualify.

• Incurred Net Loss: The business should have incurred net losses according to generally accepted accounting principles (GAAP) during the 12-month or 24-month period prior to the priority date on the Immigrant Petition by the EB-5 investor. This financial downturn was a clear indicator of the business's troubled status.

•¬†¬†Loss Equal to 20% of Net Worth: A significant loss, equivalent to at least 20 percent of the business's net worth before the loss, was a pivotal factor.

Crafting the Preservation-Focused Business Plan

The crux of the attorney’s strategy lay in the business plan. As a result, we meticulously outlined how our client’s investment would prioritize job preservation and creation, along with an increase in net worth:

• Job Preservation: Our plan detailed how the incoming investor, through prudent financial and operational strategies, would stabilize the existing workforce. The goal was to protect and retain jobs during the transition phase.

• Job Creation: In addition to safeguarding existing positions, our plan showcased how the capital infusion would lead to the creation of new jobs.

• New worth: The EB-5 investment resulted in a substantial change in the net worth of the business, which exceeded the 140% increase required under the regulations.

• Credibility and Realism: Our business plan exuded credibility and realism. It laid out a clear roadmap for financial recovery, outlining how the troubled business would regain profitability and commit to hiring new employees as it flourished.

Navigating the Legal Landscape

While we successfully addressed the USCIS criteria and crafted a comprehensive business plan, we understand the importance of legal guidance. Throughout the process, we collaborated closely with an immigration attorney who provided expertise and ensured full compliance with immigration regulations.

This case study vividly illustrates the potential for success in EB-5 visa applications involving troubled businesses. By carefully aligning with USCIS requirements, creating a business plan that prioritizes job preservation and creation, and enlisting the guidance of an experienced immigration attorney, our client successfully achieved their U.S. permanent residency goals. This serves as a testament to the opportunities that lie within the EB-5 program for those who dare to explore unconventional pathways to immigration.

The information provided in this blog is intended solely for informational purposes. While we strive to offer accurate and up-to-date content, it should not be considered legal advice. Immigration laws and regulations are subject to change, and individual circumstances can vary widely. For personalized guidance and legal advice regarding your specific immigration situation, we strongly recommend consulting with a qualified immigration attorney who can provide you with tailored assistance and ensure compliance with current laws and regulations.

Visa Business Plans is led by Marco Scanu, a certified coach from the University of Miami with a globally-based practice coaching Fortune 1000 company executives, entrepreneurs, as well as professionals in four different continents. Mr. Scanu advises clients on turnaround strategies and crisis management.

Mr. Scanu received a bachelor’s degree in Business Administration (Cum Laude) from the University of Florida and an MBA in Management from Bocconi University in Milan, Italy. Mr. Scanu was also a Visiting Scholar at Michigan State University under the prestigious H. Humphrey Fellowship (Fulbright program) with a focus on Entrepreneurship, Venture Capital, and high-growth enterprises.

At present, Mr. Scanu is the managing partner and CEO at Visa Business Plans, a Miami-based boutique consulting firm providing attorneys and investors with business planning services in the areas of U.S. and Canadian immigration, SBA loans, and others.

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