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Investing in Troubled Businesses Through EB-5: Is It Possible?

Investing in Troubled Businesses Through EB-5: Is It Possible?

The EB-5 visa program offers a unique pathway for foreign investors to gain U.S. residency by investing in American businesses. A particularly interesting aspect of this program is the provision for investing in troubled businesses.

Understanding Troubled Businesses in the EB-5 Context

A troubled business is defined as one that has been in operation for at least two years and has incurred a net loss of at least 20% of its net worth over a specified period prior to the investor’s application. This loss can be calculated over either the 12 or 24 months preceding the priority date on the investor’s Form I-526. This definition also allows for successors in interest, meaning that if a new owner takes over a business, the original business’s operating history can still be considered.

Benefits of Investing in Troubled Businesses

1. Job Maintenance: Unlike other EB-5 investments, which typically require the creation of 10 new jobs, investments in troubled businesses allow for job maintenance. Investors must demonstrate that the number of existing employees is maintained at the pre-investment level for at least two years.

2. Flexibility in Investment: Investing in a troubled business can be a strategic move for investors looking to revitalize a company while fulfilling the EB-5 requirements. This can lead to potential business growth and job preservation, aligning with the program’s goal of stimulating the U.S. economy.

Key Requirements for EB-5 Investments

• Minimum Investment: The minimum investment for EB-5 is $1,050,000, or $800,000 if the investment is in a targeted employment area (TEA), which includes rural or high-unemployment areas.

• New Commercial Enterprise: Investors must place their capital in a new commercial enterprise established after November 29, 1990, or restructure/expand an existing business to create a new enterprise.

• Full-Time Employment: The investment must create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years of the investor’s admission to the U.S. as a Conditional Permanent Resident.

Investing in troubled businesses through the EB-5 program offers a viable option for foreign investors seeking to gain U.S. residency. This approach not only aids in revitalizing struggling businesses but also contributes to economic stability by maintaining employment levels. By fulfilling the specific requirements outlined by USCIS, investors can leverage this opportunity to make meaningful contributions to the U.S. economy while securing their immigration status.

Are you considering applying for an EB-5 visa and need a comprehensive immigration business plan to support your petition? Our expert team specializes in crafting detailed and persuasive visa business plans tailored to meet USCIS requirements. Whether you're investing in a new commercial enterprise or a troubled business, we can help you navigate the complexities of the EB-5 program. Reach out to us today to ensure your investment is supported by a robust and compliant business plan. Let us help you turn your U.S. residency goals into reality.

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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