Although the EB-5 Program is a popular way for foreign nationals to start their journey toward U.S. citizenship, you must meet several requirements to succeed.

One of the most important requirements revolves around job creation methods and the accompanying documentation you need to file in support thereof.

In this article, we’ll take a closer look at what exactly these job requirements are, how you can reach them, and which common employment categories can help you meet the job creation criteria when you make an investment.

Overview of the EB-5 Program

The EB-5 Immigrant Investor Program is a method that foreign nationals can use to obtain a U.S. green card. To obtain an EB-5 Visa, applicants must make a qualifying investment of between $800,000 into a qualifying U.S. business, typically a new commercial enterprise (NCE).

An NCE may also be a troubled business that requires a direct investment to keep the company running.

When they make this investment, they are granted conditional permanent residence status for two years. This allows foreign investors to live, work, travel, and study within the U.S. much faster than other immigrant visa categories would.

After the two-year period, investors must file an I-829 petition that acts as a request to remove any conditions placed on their residency. Once United States Citizenship and Immigration Services (USCIS) has approved this petition, investors and their qualifying family members will obtain their permanent green cards.

The EB-5 projects that foreign nationals invest in must also meet all other requirements, such as creating and maintaining a certain number of jobs. We will discuss this in more detail in the next section.

Job creation requirements within the program

One of the EB-5 Program requirements is that a project must create and sustain at least 10 full-time jobs for United States workers. With the direct investment model, these jobs are only counted if they are direct employment opportunities.

However, if the investor decides to make a regional center investment, indirect or induced jobs can also contribute. These positions are based on a project’s economic impact and construction spending.

Full-time positions are those in which the employee works an average of 35 or more hours per week year-round. This means seasonal positions cannot be counted as direct jobs.

A full-time position may be filled by two half-time workers as long as the position is a single job. For example, a full-time chef position filled by two separate employees can be counted as long as the two employees work a total of 35 hours or more.

Only authorized U.S. workers can fill these job positions. This can include documented asylees, refugees, and individuals under suspension or deportation.

EB-5 job data

Economic multipliers are a key tool for assessing how EB-5 projects impact local and national employment. These multipliers take into account the various job categories these projects create, like construction or office jobs.

Then, the multipliers will use metrics beyond job numbers to calculate the impact of the project. For instance, factors like the size and scope of a construction project may be considered instead of just counting jobs.

This approach provides a more comprehensive understanding of how EB-5 projects contribute to job creation within the economy.

Project ownership

Currently, USCIS only counts qualifying job types of projects where the developer maintains significant ownership after construction is complete.

While USCIS has indicated the requirement for significant ownership, the agency has not defined what significant ownership entails. It currently doesn’t mean a majority interest—as little as 15% ownership seems to satisfy this requirement.

EB-5 project type

USCIS tends to favor certain projects over others for investment approval. The project types most likely to be approved by the USCIS, include:

• Restaurants.
• Hotels.
• Medical offices.
• Hospitals.
• Senior living centers.
• Single and multifamily residential dwellings.

USCIS is typically less likely to approve office building and shopping center projects, even though these have been popular options in the past.

This is often directly related to creating operations jobs because USCIS assumes that no net increase in these jobs would occur for office buildings and shopping centers—revenue would simply shift to the new office spaces and retailers.

This means that these projects won’t promote economic growth as much as other domestic capital investment options would, and they have a bigger chance of failing to meet EB-5 Program requirements.

While USCIS will consider arguments in favor of a project that is likely to positively impact the economy, gaining approval can be much more challenging, and running the related business operations will require direct investors to have more experience and take on many managerial responsibilities.

USCIS job documentation requirements

All the necessary figures—such as revenue, deflation, and final demand multiplier—must be presented and discussed in the project’s economic impact analysis and business plan. This plan is also known as Form I-526E.

When filing this form, an investor must show that any business metrics they relied on, are consistent with similar projects in the area. For example, if the project is a hotel, the I-526E and accompanying documentation must demonstrate that the occupancy rate, average daily rate, and the number of direct jobs per room align with other local hotels.

It’s important to note that when an investor submits their I-829 petition, the accompanying documentation must back any economic analysis estimates with sufficient proof. Doing this requires that the investor submits relevant tax forms, such as Form W-2, Form I-9, and Form 94.

Types of EB-5 Jobs

There are two main categories of jobs that can be created within EB-5 Program: direct and indirect. Direct jobs refer to any type of employment that occurs as a direct result of the project in the community. For example, if you invest in a hotel, direct jobs include any staff you hire.

Indirect job creation is when employment opportunities arise because of the project’s impact on the community. For example, when your hotel opens, you must supply food to your guests and buy your supplies from the local market. Because of the increase in business and income, the market would be able to employ more cashiers or workers.

Direct jobs are always counted toward the required number you must meet in the EB-5 program. Indirect jobs only count if you’ve invested in regional centers. In this section, we’ll take a look at two common direct jobs.

Construction Jobs

These are jobs related to the construction work that is needed for the EB-5 project, such as workers who help build the hotel or restaurant an investor is developing. Construction jobs are direct forms of employment because these opportunities came about as a direct result of your development project.

Construction jobs are calculated by applying the final demand multiplier to your expenses. The final demand multiplier is the number of jobs created per million dollars. For most projects, this multiplier is between 12 and 14—which means you’ll have to create 12 to 14 jobs per million dollars you spend.

When calculating how many jobs will be created during construction, several additional factors should be considered. We will discuss these in the next sections.

Duration of the job

If the construction period of the project would take less than two years to complete, only indirect and induced construction jobs may be counted. However, if the project will take more than two years to complete, you can count direct construction jobs as well.

Jobs across various types of construction are counted in different ways, which is why it’s important to determine the timeline you’ll use to count the jobs your project would create early on.

Construction ends either when the certificate of occupancy is issued or, in the case of manufacturing facilities, when the building begins to be used for that purpose.

Different expense types

A project’s costs are divided into different groups—hard and soft—and are calculated separately by using different multipliers.

Some hard construction costs—such as contingencies and fees—are not EB-5 eligible. Costs associated with any general construction work may also be ineligible, but this is predetermined by USCIS.

EB-5 eligible soft costs include architectural, design, engineering, and testing fees. Depending on the adjudicator, many soft costs may or may not be eligible. These costs include building permits, building fees, utility hookup fees, insurance premiums, finance charges, taxes, and marketing.

Cost inflation

Over time, costs may increase due to inflation. Input/output model coefficients and multipliers, however, often rely on data from previous years. Current dollar values must also be deflated to the values used in the input/output model to properly arrive at the final demand multiplier. Deflation figures are reported by the U.S. Bureau of Labor Statistics (BLS).

USCIS supporting evidence requirements

For an investor’s I-526E petition to be approved by USCIS, the form must be supported by evidence that the project’s costs are reasonable. The USCIS expects to see the general contractor’s detailed construction budget with costs itemized by category.

This budget must also be compared to the cost per square foot of equivalent projects in the region by using relevant, up-to-date data. For construction projects expected to last more than two years, USCIS requires a monthly schedule of anticipated construction costs.

For USCIS to approve an investor’s I-829 petition, the form must be accompanied by evidence of how the funds were spent. Such evidence includes wire transfers, canceled checks, and vouchers.

Operations

Operations jobs can be calculated in two ways, either by counting them directly or by using your revenue. Both methods should give you the same results.

For the first method, direct job creation is counted and multiplied by the employment multiplier—which is the ratio of the economic impact of your project on the community to the jobs you’ve created.

When revenue is used to calculate EB-5 job creation, you’ll need to ensure that you use the same amount as in your initial economic analysis. You’ll multiply these amounts with the final demand multiplier—or the number of jobs you’ve created per million dollars.

If the two methods don’t produce similar results, USCIS may deny investor petitions that rely on these operations jobs.

For example, a new hotel project might anticipate $3 million in annual revenue from accommodation. To calculate EB-5 job creation from this revenue, the economic analysis must first deflate this figure appropriately. For this example, it would need to be deflated by 8.6%.

This gives you a value of $2.76 million that you have to work with. The hotel’s accommodation revenue must then be multiplied by the final demand multiplier of 16.9.

When the $2.76 million is multiplied by 16.9, you’ll get a result of 46,644. This means that the hotel’s accommodation revenue will create a total of 46 operations jobs.

To calculate the number of direct jobs created, the total number of jobs (46) must be divided by the employment multiplier. For this example, the multiplier is 1.7.

When you divide 46 by 1.7, you get a result of 27. This means that of the 46 operations jobs created, 27 would be direct jobs. The rest would be indirect and induced jobs.

The scenario above provides a basic example of how operations jobs are calculated. However, it’s important to note that a number of other factors must be considered when determining how many operations jobs can be counted.

If you’re unsure how to go about calculating the different multipliers and job results, it’s recommended to appoint an immigration attorney to help you.

Secure Your Future in the U.S. with EB5AN

FInding your way through the complexities of the EB-5 Investor Program—particularly when it comes to job creation—necessitates a comprehensive understanding of its requirements. It can be challenging to undertake this demanding endeavor, especially if you’ve never done it before.

Our team of immigration attorneys can help you navigate this program and ensure that you employ the right methods to create jobs successfully.

Contact EB5AN today to learn how you can apply for an EB-5 Visa and secure your future in the United States.