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Where the first business went out of business and EB-5 investor wants to step in
Question raised by another immigration attorney:
"1. The client wants to set up an assisted care center (what we used to call a nursing home). The facility was built, employees hired and was just about to open when the economic crisis hit and it went out of business in Feb. 2009. The former employees have all been let go and the client is going to start up anew, with a new company buying the facility and hiring new staff, which presumably would include at least some of the old staff. My gut feeling tells me CIS might be reluctant to deem this a 'new business,' but I'm hoping this is wrong. The place has been standing empty for half a year with no employees and the old company is long gone. Does anyone have experience with such a situation?
2. The client informs me that nursing homes ordinarily obtain government-backed HUD loans, and that this is an industry standard practice. Again, my gut feeling warns me CIS might view this as somehow taking advantage of government money for an EB-5 project, but I hope I am wrong about this."
Answer provided by: Boyd Campbell, another EB-5 practitioner
"It's good to have gut feelings and even better when they're not a problem.
Your client's business meets the definition of "new commercial enterprise" in both the old law and the 2002 amendments to the EB-5 Program. But please be aware of 8 CFR 204.6(h)(2) which involves restructuring or reorganization of an existing business. I think you're in the clear if the original company literally faded away or went bankupt or closed and your client is just giving it another try with a new company and a different facility.
Although USCIS sometimes raises issues regarding use of domestic funds -- whether gov't or not -- in the EB-5 Program, it's blowing smoke. There is no prohibition in either the law or the regs."
My only additional remark is that you should try to prove that the old business did indeed go out of business, so you can show the USCIS there is no funny business going on here.