When evaluating whether an EB-5 investment meets the requirement that an investor create at least 10 jobs for qualified U.S. workers, there is now more guidance under the RIA than before.
In general, an investment in a business sponsored by a Regional Center does not require all qualifying jobs come from employees hired directly by the business. Indirect and induced job creation based on approved methodologies remains the core of the Regional Center program advantage. As before the RIA, investors may rely on economically and statistically valid methodologies to determine the number of jobs attributable to the investment. These methodologies may be used to support estimates of directly created jobs and, where permitted under the statute, jobs created directly or indirectly through capital expenditures, increased export revenues, enhanced regional productivity, and broader domestic capital investment generated by the project.
However, indirect job creation is now lightly restricted with only a 90 percent of indirect job creation being credited. Employees hired directly by the new commercial enterprise or the job-creating entity may still count as directly created jobs.
If an EB-5 project relies on construction activity that lasts less than two years, the rules are more limited. In that case, only up to 75 percent of the required jobs may be satisfied through indirect job creation.
The USCIS may count certain jobs expected to come from future tenants in a commercial real estate project, but only if those jobs are supported by a valid economic methodology and are truly new jobs rather than jobs moved from somewhere else. The rules also make clear that EB-5 investment funds cannot be used to buy municipal bonds or other publicly available bonds.
This is part of a series on the EB-5 Reform and Integrity Act of 2022. To read more in this series, click here.