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Leveraging an E-2 Enterprise into an EB-5 Green Card

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By: Chris Costa

Many E-2 non-immigrant visa holders feel that obtaining permanent residence through their E-2 enterprise is unattainable due to the much higher investment amount required for a direct EB-5 immigrant visa petition. Many E-2 non-immigrant visa holders are surprised to discover (1) that their E-2 enterprise is principally doing business in a TEA and may benefit from the lower EB-5 investment threshold; or (2) that the EB-5 investment period is not limited to a certain time period. Many E-2 non-immigrant visa holders are surprised to discover (1) that their E-2 enterprise is principally doing business in a TEA and may benefit from the lower EB-5 investment threshold; or (2) that the EB-5 investment period is not limited to a certain time period.

Under the EB-5 Reform and Integrity Act enacted on March 15, 2022, the U.S. Department of Homeland Security (DHS) will now designate TEA’s instead of individual state agencies, as has been the practice to date. Subsequent to TEA designation by DHS, if an E-2 enterprise is deemed to be principally doing business in a TEA, and has been throughout the investment period, then the E-2 investor would be able to avail themselves of the US $800,000 EB-5 investment minimum.

To satisfy the EB-5 investment minimum of US $800,000 for enterprises principally doing business in a TEA, an E-2 investor may avail themselves of the original E-2 investment plus any additional funds invested in the enterprise. Pursuant to regulation additional investment funds may include any post-tax reinvestments that could have been allocated to the E-2 investor as dividends or profits. Therefore, funds generated by the E-2 enterprise and reinvested in the business by the E-2 investor for purposes of equipment or inventory purchases, additional hiring, marketing campaigns and business expansion all count towards an EB-5 investment.

E-2 investors would be well advised to analyze whether (1) the E-2 enterprise is principally doing business in a TEA; and (2) whether their investments in the E-2 enterprise throughout its lifetime qualify for EB-5 investment qualification from an accounting and legal perspective. E-2 enterprises which employ or may soon employ at least 10 full time workers may qualify as EB-5 enterprises provided investment requirements are met.

For a consultation on leveraging an E-2 enterprise into an EB-5 Green Card please reach out to Drummond Advisors.