EB-5 Job Creation and Employment are essential components of the EB-5 Visa criteria for USA Permanent Residency (Green Card). EB-5 Job Creation and Employment are generated from new commercial enterprises (NCEs) where EB5 investors inject capital funding to facilitate US economic growth. The rules on EB5 Job Creation and Employment require at least 10 full-time qualifying positions to result from each immigrant investor’s investment. A full-time position consists of a minimum of 35 working hours per week and qualifying employees are individuals who are authorized to work in the USA.
EB 5 Jobs and Employment are classified based on the type of project and location of the new commercial enterprise (NCE). Direct EB 5 Projects are created outside of regional centers wherein only jobs directly resulting from the NCE are counted towards the EB5 Visa Requirement. Indirect and induced jobs are counted along with direct jobs for EB-5 Projects under authorized economic units called Regional Centers. Indirect and induced jobs are created due to the positive economic impact of the EB 5 NCE in a certain location.
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What is EB-5 Job Creation and Employment?
EB-5 Job Creation and Employment are part of the key requirements for EB-5 Visa qualification. EB-5 Job Creation and Employment are direct results of the positive economic impact of an EB5 investor’s capital funding in a new commercial enterprise (NCE). The EB5 Visa Program requires capital from immigrant investors to yield at least 10 full-time permanent jobs for US workers in order to obtain US Permanent Residence (Green Card). The new commercial enterprise (NCE) creates the required minimum employment through funding from immigrant investors.
How Does EB-5 Job Creation and Employment Work with Bridge Financing?
A project developer or principal of the NCE has the option to make use of bridge (interim) financing in the form of debt or equity before receiving investments from EB 5 applicants. Job creation and employment are still credited to the EB-5 NCE for projects that begin with bridge (temporary) financing prior to the receipt of capital from immigrant investors. All of the EB 5 Visa investors’ capital must subsequently take place of the original bridge funding and be made into the new commercial enterprise or the job-creating entity of the EB-5 Project.
Ideally, the replacement of the bridge financing with EB-5 funding should have been established before the original bridge funding was used by the NCE. In situations where EB-5 bridge financing was not planned before acquiring the original bridge financing, job creation can still be considered a result of EB5 investment. The financing that would be replaced must have been planned as short-term temporary financing that would then be replaced by more permanent long-term financing to count and credit the new jobs to EB 5 financing.
How Does EB-5 Job Creation and Employment Work with Multiple Job-Creating Entities?
An investor’s whole investment can be dispersed to more than one job-creating entity (JCE) under a portfolio investment strategy if invested in a single new commercial enterprise and if the offering and organizational documents permit it. The documentation must show that the portfolio of projects that the NCE will work on will result in the necessary number of jobs required. Each investor (or regional center for regional center petitions filed on or after May 14, 2022) needs to show that the full amount of the EB 5 investment is made available to the business(es) most closely associated with the employment, which may be one or more job-creating entities in a portfolio.
Who are Eligible Qualifying Employees for EB-5?
A qualifying employee for EB-5 Job Creation and Employment is a US citizen, lawful permanent resident (LPR), or other immigrant lawfully authorized to work in the USA. These immigrants include refugees, asylees, conditional residents, temporary residents, or noncitizens who are under the suspension of deportation. Qualifying employees do not include the EB-5 Visa investor, their spouse, and their children.
An employee is an individual rendering service or labor for the NCE and receives wages from the new commercial enterprise. EB 5 employees in Regional Center Projects that are paid indirectly through EB 5 investment in the NCE are also qualified employees.
What are Full-time Positions for Qualifying Employees Under EB-5?
EB5 qualifying employees must have full-time positions which means that the employee works at least 35 hours per week for the new commercial enterprise. Regional Center Project employees must work the required minimum of 35 hours per week in a position indirectly created by the NCE. The full-time positions must last at least 2 years and cannot be intermittent, seasonal, temporary, or transient.
Is a Job-sharing Arrangement Permitted for EB-5 Job and Employment Creation?
Yes, job-sharing is permitted for the EB-5 Job and Employment Creation requirement. A job-sharing arrangement exists when 2 or more qualifying employees fill a full-time position that is equivalent to 35 working hours per week. Part-time positions are not classified as full-time positions or job-sharing even if the minimum number of working hours per week is met.
These are the evidence required to prove that a job-sharing agreement fulfills the requirements of a full-time position for EB5.
- A written job-sharing agreement or contract.
- A weekly schedule that states the job-sharing positions and the designated working hours per employee under the arrangement.
- Proof of the shared responsibilities, duties, or benefits of the permanent full-time position between the qualified employees under the job-sharing agreement.
What are the Classifications of Jobs for EB-5 Employment Creation?
EB5 Jobs and Employment are classified depending on the type of project investment. EB5 Visa investments are either made into a Direct Project or a Regional Center Project.
Direct Jobs
Direct EB5 Projects are new commercial enterprises established without economic units called regional centers. Direct Projects produce direct jobs wherein qualified employees are generated from the NCE as a job-creating entity (JCE). Direct EB-5 jobs are also counted from Regional Center NCEs and JCEs.
Indirect and Induced Jobs
Regional Center Projects are able to count indirect and induced jobs toward the EB 5 Employment Creation requirement. EB5 Regional Centers are economic units designated by the U.S. Citizenship and Immigration Services (USCIS) for the pooling of capital funding from immigrant investors. Indirect EB5 jobs are created outside of the NCE but are established because of activities of the NCE such as employees of manufacturers contracted by the NCE or JCE. Induced EB-5 jobs are subclassifications of indirect jobs which stem from the positive economic impact of the NCE in a certain location such as the spending of direct and indirect EB-5 employees on goods and services. Construction jobs are considered indirect and induced jobs. Construction jobs that last less than 2 years only account for up to 75% of the total job creation requirement for EB 5 petitions filed on or after May 15, 2022.
The U.S. Citizenship and Immigration Services (USCIS) uses economic models to determine whether indirect jobs resulted from an EB5 Project and additional evidence is required to ascertain whether these positions are full-time. See more about Projects for EB-5.
How to Measure EB-5 Job Creation and Employment?
Each immigrant investor must generate at least 10 permanent, full-time employment from their EB-5 Visa investments in a new commercial enterprise. The measurement of EB 5 Job Creation and Employment are based on the characteristics of the new commercial enterprise and its location.
New Commercial Enterprises Outside a Regional Center
Direct projects outside of Regional Centers are only able to count jobs directly resulting from the NCE itself. The direct EB-5 project or its subsidiaries must be the employer of the qualifying full-time employees.
New Commercial Enterprises Within a Regional Center
EB 5 Visa investors who filed before the lapse of the Regional Center Program on July 1, 2021 are able to count both direct and indirect jobs toward the minimum employment creation requirement. Regional Center investors who filed their petitions on or after March 15, 2022 are only able to include indirect jobs for up to 90% of the total EB-5 Job Creation and Employment requirement.
Troubled Businesses
A troubled business is a commercial enterprise that has been operating for at least 2 years and posted a net loss in the 12 to 24 months prior to the immigrant investor’s EB-5 priority date. The loss must equal at least 20% of the troubled company’s pre-loss net worth. USCIS considers the successors-in-interest to the troubled business to have been in operation for the same amount of time as the business they succeeded in assessing whether or not the troubled business has been in operation for 2 years.
Positive economic impact occurs when EB-5 investments help in keeping the existing jobs in a troubled business. The EB5 Program requires investors in troubled businesses to maintain the number of existing employees or that this number will not be less that the pre-investment level for at least 2 years. Preservation, creation, or a combination of the 2 must result in the minimum 10 EB5 Jobs required from the investment of immigrant investors in the troubled business. Learn more about Business Structures for EB-5.
Multiple Investors in a New Commercial Enterprise
Multiple EB-5 investors cannot claim credit for the same qualifying job in the NCE they invested in. Each immigrant investor must be allocated a distinct qualifying full-time job for the EB-5 Employment Creation requirement.
Pooling of capital from multiple investors is only permitted for applicants under the Regional Center Program for investors who filed on or after March 15, 2022. USCIS only distributes the total number of full-time positions created for qualified employees to EB 5 investors who have used the creation of the NCE as the basis for their immigrant petition for applications submitted before March 15, 2022. There is no requirement to distribute job creation among those who are not applying for EB-5 status. Additionally, non-natural individuals like corporations investing in the NCE are not required to be given job counts. USCIS assigns full-time positions to immigrant investors based on the date their petition to remove conditions was filed unless otherwise specified in the pertinent paperwork.
What are the Requirements and Evidence Needed for EB-5 Job Creation and Employment?
Below are the evidence and requirements needed to be submitted by EB-5 Visa investors to prove the creation of at least 10 full-time jobs for qualifying employees.
- Documents including copies of tax records, Form I-9 (Employment Eligibility Verification), and other similar documentation for 10 qualifying EB5 employees if such employees have already been hired OR
- A copy of a thorough business plan demonstrating that given the type and anticipated size of the NCE required at least 10 qualified employees to be hired over the next 2 years together with an estimate of when they will be hired. The 2-year period is set to begin 6 months after the adjudication of Form I-526 (Immigrant Petition by Standalone Investor). Your Business Plan for EB5 Visa is one of the most essential requirements for Green Card eligibility and must have the following components depending on the type of NCE you’re investing in.
- Immigrant investors in troubled businesses have to present a comprehensive business plan together with other evidentiary documents.
- Regional center immigrant investors must submit a comprehensive business plan to demonstrate direct or indirect job creation from the NCE together with documents using reasonable methodologies.
- For petitions filed on or after May 14, 2022, regional centers must first file Form I-956F (Application for Approval of an Investment in a Commercial Enterprise) before EB 5 regional center investors are able to submit their petitions.
- EB 5 regional center investors who filed before July 1, 2021 seeking to prove job creation through an economic input-output model, USCIS requires the use of reasonable methodologies. Evidentiary documents required include Form I-9, tax or payroll records, and a comprehensive business plan that shows how many jobs will be created and when these jobs will be created.
- For models with inputs reflecting expenditures, USCIS requires EB5 investors to show that the expenditures are reasonable through relevant documents.
- Receipts for expenditures.
- Financial records for expenditures.
- Detailed projection of sales, costs, and income projections such as a pro-forma cash flow statement associated with the business plan for expected expenditures.
- For models with inputs reflecting revenues, USCIS requires EB5 investors to show that the revenues are reasonable through relevant documents.
- Tax or other financial records for revenues.
- Detailed projection of sales, costs, and income projections such as a pro-forma income statement associated with the business plan for expected revenues.
- For models with inputs reflecting expenditures, USCIS requires EB5 investors to show that the expenditures are reasonable through relevant documents.
USCIS examines the multipliers and assumptions regarding the EB5 Project’s geographic impact to determine whether an economic methodology is reasonable. For instance, the following elements are taken into account when examining the geographic level of the multipliers used in an input-output model.
- The area’s demographic construct (population growth, population density, labor pool supply, and workforce rate).
- The area’s contribution to supply chains of the EB-5 Project.
- Connectivity in relation to socioeconomic variables in the area such as income level and purchasing power.
What are the EB-5 Job Creation and Employment Rules on Tenant Occupancy?
As of May 14, 2022, regional center investors are allowed to include jobs anticipated to be created under a methodology that attributes jobs to potential tenants occupying commercial real estate created or improved by EB 5 investments. The number of anticipated jobs to be created must be determined by a method that is both economically and statistically sound and that the jobs in question are not existing and are not being relocated.
When Do EB-5 Jobs and Employment Need to be Created?
EB5 Job Creation for the 10 full-time qualifying employees must occur within a 2-year period which is generally the EB-5 investor’s Conditional Permanent Residency. USCIS defines the beginning of the 2-year period as the succeeding 6 months after the I-526 petition has been adjudicated.
How Long Do EB-5 Jobs and Employment Need to be Maintained?
EB-5 Jobs and Employment must be maintained for the minimum period of the 2-year Conditional Permanent Residency of the EB5 investor or until the filing of Form I-829 (Petition by Investor to Remove Conditions on Permanent Resident Status). The I-829 petition grants lawful permanent resident (LPR) status to EB 5 investors and their dependents valid for 10 years and renewable unlimitedly.