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How does having multiple investors affect an EB-5 project’s job creation calculation?

The EB-5 program requires that each EB-5 investment create 10 or more jobs, so the total number of jobs created by a project is divided by the total number of EB-5 investors. All eligible jobs are counted, even if EB-5 funds represent only a small percentage of a project’s total capital stack. In other words, job creation is attributed only to EB-5 investors—thus, the smaller the number of EB-5 investors involved in a project, the easier it will be for them to create the 10 required jobs.

Even though United States Citizenship and Immigration Services (USCIS) requires all EB-5 investors to create a minimum of 10 jobs, the employment calculation procedures for regional center-sponsored and direct investment projects are quite different. Regional center investors are allowed to count indirect and induced employment in addition to the jobs directly created by the project. Induced and indirect jobs are a result of the spending made by the EB-5 project and its employees in the locality. These expenditures create jobs by strengthening the local economy. In contrast, direct EB-5 investors can only count direct employment toward creating the 10 necessary jobs. All direct jobs must be created by the new commercial enterprise (NCE) and appear on its payroll. These are usually operational positions associated with the NCE.

Since it is much easier to generate the 10 jobs through a combination of direct, indirect, and induced employment, most EB-5 investors gravitate toward regional center-sponsored projects. Many regional center projects plan on creating much more than 10 jobs per EB-5 investor, which significantly mitigates the associated immigration risk.

Moreover, each job generated by EB-5 investment capital must be a full-time position that lasts at least two years. Investors should note that the position itself must last for two years but does not need to be filled by the same employee during that period.