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Healthcare businesses can be used in a Direct EB-5 structure when the business and investment meet the applicable EB-5 requirements.
The industry itself does not create a special EB-5 category. A healthcare business must still meet the same core requirements that apply to other qualifying Direct EB-5 investments, including the required investment, job creation and investor participation.
However, healthcare businesses have characteristics that deserve additional attention. They can require significant staffing, specialized professionals, physical facilities, equipment and regulatory compliance.
For an EB-5 investor, that makes it important to understand both the immigration structure and the healthcare business behind it.
Can a Healthcare Business Qualify for Direct EB-5?
Yes. Direct EB-5 is not limited to a particular industry.
A qualifying investment can involve different types of U.S. operating businesses, provided the investment satisfies the applicable EB-5 requirements.
Healthcare businesses may include medical practices, clinics and other healthcare operations. The specific business model determines how the company operates, who provides the medical services and what employees it needs.
The same Direct EB-5 fundamentals still apply.
The investor must make the required qualifying investment, document the lawful source and path of the funds, satisfy the applicable investor participation requirements and be associated with the required job creation.
Our Direct EB-5 requirements article explains these requirements in greater detail.
The Importance of Staffing in a Healthcare Business
Healthcare businesses depend on people.
Depending on the type of facility, the operating team may include physicians, nurses, physician assistants, medical assistants, technicians, administrative employees and other personnel.
The staffing model will vary considerably from one healthcare business to another.
For Direct EB-5, this matters because each investor must be associated with the creation of at least 10 qualifying full-time jobs.
The business plan should therefore connect the staffing needs of the healthcare operation with its hiring schedule and broader operating plan.
Our article: Direct EB-5 job creation explains the 10-job requirement and qualifying employment in more detail.
Who Provides the Medical Care?
Ownership of a business and delivery of medical care are separate issues.
Healthcare businesses may require physicians or other appropriately licensed healthcare professionals to provide or oversee medical services. The requirements depend on the type of healthcare business and the state where it operates.
This means an EB-5 investor should understand the difference between their role in the investment structure and the responsibilities of the professionals responsible for clinical care.
The investor does not become a medical professional simply by investing in a healthcare business.
The operating structure must account for the professional, licensing and regulatory requirements that apply to the particular business.
Healthcare Businesses Have Additional Regulatory Considerations
Healthcare is a regulated industry.
Depending on the business, its location and the services provided, requirements may involve professional licensing, facility standards, laboratory services, billing, insurance participation and other healthcare regulations.
Those requirements are not identical across every healthcare business.
Federal requirements may also apply to certain healthcare providers and services. CMS, for example, maintains health and safety standards for healthcare organizations participating in Medicare and Medicaid.
For investors, the important point is that regulatory requirements should be part of the operating plan rather than treated as a separate issue after the business is launched.
Why is Location Important
Healthcare may be a large U.S. industry, but that does not mean every healthcare business will perform the same way in every market.
Location can affect patient demand, competition, staffing availability, operating costs and the services a facility needs to provide.
Consider urgent care as one example.
The Urgent Care Association currently reports more than 15,000 urgent care centers in the United States and more than 185 million patient visits annually.
Those figures demonstrate the size of the sector. They do not tell an investor whether a particular clinic or location will succeed.
A healthcare business still needs a reasonable basis for choosing its market and developing its operating plan.
The Operating Business Still Matters
A healthcare label does not make a business automatically suitable for Direct EB-5.
Investors should still understand how the company expects to operate.
That includes questions about its services, customers or patients, revenue model, staffing, management, location, use of investment capital and regulatory requirements.
The business should also have a plan for turning those elements into an operating company capable of carrying out the strategy presented in its business plan.
Healthcare does not remove business or investment risk. It adds another operating environment that needs to be evaluated carefully.
Our article on how to evaluate a Direct EB-5 business opportunity discusses some of the business factors investors may want to examine when reviewing an opportunity.
Explore Direct EB-5 With TADE Consulting
Healthcare can provide an operating-business setting for Direct EB-5, but the industry is only one part of the analysis.
The business, staffing model, management structure, use of capital and applicable healthcare requirements still need to work together with the EB-5 structure.
TADE Consulting’s Direct EB-5 guide provides a broader explanation of the pathway and information about TADE’s current Direct EB-5 opportunities.
Direct EB-5 Through Healthcare Businesses FAQ
Yes. A healthcare business can be used for Direct EB-5 when the investment and business meet the applicable program requirements.
Yes. The industry does not remove the Direct EB-5 job-creation requirement. Each investor must be associated with the required qualifying employment.
An EB-5 investor does not become a physician or other licensed healthcare professional because of the investment. The business must have the appropriate professionals and operating structure required for the medical services it provides.
No. Healthcare businesses can face different licensing, ownership, facility and professional requirements depending on the state and the services being provided. The specific structure should be reviewed by the appropriate healthcare and legal professionals.
Healthcare businesses still carry business and investment risk. The industry alone does not determine whether an individual business will succeed or whether an investment will meet its immigration objectives.
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