Can I invest in a family business where I am already a minority partner?

It is always important to understand the requirements and nuances of the EB-5 program before making any decision about investing in a business, especially when it comes to a family business in which you already have a stake. The EB-5 was created to encourage foreign investment in the United States and requires that the invested capital be ‘at risk’, come from legitimate sources, and create at least 10 full-time jobs for U.S. workers, among other criteria.

In the scenario of investing in a family business where you are already a minority partner, there are some points that need to be considered. First, it is fundamental to analyze whether the additional investment integrates into the project seeking to meet the EB-5 requirements. For the visa, the investment must be new, have the responsibility to create or preserve jobs in a clear and demonstrable way, and be structured according to the program’s rules.

If the family business was not originally established with the focus on meeting these specific requirements, it may be necessary to restructure the operation or prove, with consistent documentation, how the investments will generate the required jobs.

Another aspect to consider is the origin of the funds and how the investment within the family structure will be treated. Having a prior stake can raise questions about the ‘newness’ of the injected capital – after all, immigration authorities assess whether the investment meets the concept of ‘invested capital’ as provided in the program, monitoring whether it is indeed new or additional to existing capital.

Moreover, there may be implications related to management and transparency of internal processes that require special attention when structuring the investment to strictly comply with the standards established by the competent authorities.

Therefore, it is essential to verify, step by step, if the family business can be classified as the ‘new commercial enterprise’ required by EB-5, or if it would be more advantageous to consider other investment models better suited to your profile and how the program is structured.

It is worth remembering that strictly following all U.S. immigration law guidelines is fundamental, as well as seeking the support of specialized professionals and exercising caution with offers or campaigns that promise immediate results without proper legal basis.

A complete and detailed analysis of the investment conditions and the company structure is the safest path to avoid unpleasant surprises throughout the process.

In summary, investing in a family business in which you already have a stake can be an option; however, it requires a thorough analysis regarding the compliance of the investment with EB-5 criteria. It is essential that the transition from the pre-existing investment to qualification under EB-5 is carefully mapped, always ensuring that all legal requirements are strictly met to avoid future complications.

Victoria Harper

Editor-in-Chief

Meet the author

Leading journalism and editorial content at Visto n’ Visa, Victoria helps make immigration topics clear, trustworthy, and easy to understand. Her focus is on delivering useful, human, and relevant content for people exploring new paths abroad.