The programme
Expansion of an existing business
Also called 40 percent test, substantial change.
Expansion of an existing business is one of the three routes in 8 CFR 204.6(h) to establishing a new commercial enterprise: investing the required amount so that net worth or employee count rises by 40 percent, to at least 140 percent of the pre-expansion figure. The route reaches only petitions filed before 15 March 2022, because the RIA definition of new commercial enterprise at 8 U.S.C. 1153(b)(5)(D)(vi) carries no expansion test.
What it decides
8 CFR 204.6(h)(3) defines the substantial change it demands as "a 40 percent increase either in the net worth, or in the number of employees, so that the new net worth, or number of employees amounts to at least 140 percent of the pre-expansion net worth or number of employees." The increase must result from the investment of capital, not from ordinary trading. The same paragraph adds that establishing a new commercial enterprise this way "does not exempt the petitioner from the requirements ... relating to the required amount of capital investment and the creation of full-time employment for ten qualifying employees." Its internal cross-reference to 8 CFR 204.6(j)(2) and (3) is stale, as job creation evidence now sits at 8 CFR 204.6(j)(4). The route exists only because 8 CFR 204.6(e) defines "new" as "established after November 29, 1990." A business formed after that date is already a new commercial enterprise, so USCIS applies expansion, and the restructuring route at 8 CFR 204.6(h)(2), only to a business that existed on or before 29 November 1990 (USCIS Policy Manual, Vol 6, Part G, Ch 2, Section C, Subsection 1). That whole framework is legacy law. Under proposed 8 CFR 204.400(a), an EB-5 petition filed before 15 March 2022 "is governed by Sec. 204.6, as in effect on November 20, 2019." For petitions filed on or after 15 March 2022, the EB-5 Reform and Integrity Act supplies the definition of new commercial enterprise at 8 U.S.C. 1153(b)(5)(D)(vi), which has no date element and no expansion or restructuring test. USCIS sets the two definitions in parallel columns keyed to filing date in the Policy Manual chapter above. An investor filing today therefore faces no 40 percent test, whatever the age of the business. DHS proposed on 2 July 2026 (91 FR 40676) to remove and reserve 8 CFR 204.6 and add a new subpart D at 8 CFR 204.400 to 204.435. The phrases "substantial change," "expansion of an existing business" and "40 percent" appear nowhere in that proposal, and DHS explains that it is "defining 'new commercial enterprise' consistent with the definition provided by the INA where no temporal requirement exists." The proposal does not erase the test for those it still governs: 8 CFR 204.6 as in effect on 20 November 2019 would continue to control pre 15 March 2022 petitions. Comments are due 31 August 2026, and the rule is not final.
Related terms
- Troubled businessA troubled business is a business in existence for at least two years whose net loss under generally accepted accounting principles, over the 12 or 24 months before the priority date on the investor's I-526 or I-526E, is at least 20 percent of its net worth before that loss.
- Direct EB-5Direct EB-5, which USCIS calls the standalone program, is an EB-5 investment made without a regional center and filed on Form I-526, where only the full-time jobs created by the new commercial enterprise itself, or by its wholly owned subsidiaries, count toward the ten.
Checked against primary sources on . Back to the glossary