Creating Jobs: The Job Creation Requirement in EB-5

Updated: June 23, 2024

WRITTEN BY

EB-5 Insider Team

A group of professionals with years of experience helping people immigrate to the US

Note: This article is for informational purposes only. We are not providing legal advice or selling securities. The articles and content on this site are of a general informational nature only and should not be relied upon for individual circumstances.

Congress launched the EB-5 Immigrant Investor Program in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. It offers permanent residency and a path to U.S. citizenship for foreign investors who invest at least $800,000 to create 10 full-time jobs for U.S. citizens and qualifying lawful immigrants.

The EB-5 Reform and Integrity Act (RIA) created new set-asides for qualified immigrant investors. Each fiscal year, a percentage of EB-5 visas is made available for immigrants who invest in specific areas. Twenty percent are reserved for rural areas, ten percent for high-unemployment areas, and two percent for infrastructure projects.

Job creation can be one of the most confusing aspects of the EB-5 visa process and should be considered when choosing what project to invest in. To acquire a green card, EB-5 investors must show that their project has or will create 10 full-time jobs for U.S. employees.

Overview of Job Creation Requirement

The EB-5 application process requires investors to show proof that they have invested or are in the process of investing their “lawfully obtained capital in a new commercial enterprise…which will create full-time positions for no fewer than 10 qualifying employees.”

We’ll break down the requirements for job creation and how they can differ depending on the specific type of project you choose to invest in.

Non-Regional Center Investment

If the new commercial enterprise is not located within a regional center, it must create at least 10 full-time positions it directly employs.

Regional Center Investment

If the new commercial enterprise is located within a regional center, the 10 full-time positions can result from direct or indirect employment. Many EB-5 investors work with a regional center to facilitate the necessary job creation levels.

An estimated 90% of the job creation requirement for regional center investors is met using indirect jobs. These are employees outside of the new commercial enterprise but are created as a result of it, such as construction roles.

Troubled Business Investment

The main exception to the requirement to create 10 new full-time jobs occurs when an EB-5 applicant invests in a troubled business. In this scenario, they can rely on job maintenance instead. They must show that the number of existing employees is, or will be, no less than the pre-investment level for at least two years.

An organization qualifies as a troubled business if it has existed for at least two years and incurred a net loss during the 12 or 24-month period before the priority date on the investor’s Form I-526. This net loss must be at least 20% of its net worth before the loss.

Direct vs. Indirect Job Creation

When doing your due diligence before choosing your EB-5 investment project, consider direct vs. indirect job creation. Only direct job creation will count if you invest directly in an NCE.

Direct jobs are full-time positions the project creates and filled by qualified U.S. workers. These positions must be for 35 hours or more per week. While part-time positions will not count towards job creation, job-sharing arrangements can. It’s more beneficial to have two employees share one full-time role than to hire them as two part-time employees, even if their cumulative hours would meet that of a full-time role. 

EB-5 investors in regional centers can also rely on induced jobs to meet their job creation requirements. Induced jobs are created because of the project’s economic impact, but the project does not indirectly employ them. Indirect jobs are created to support the project, usually by supplying goods or services, while induced jobs are created because of the wider economic impact. For example, full-time jobs in nearby shops are available because employees have more disposable income in the local community. 

These can be harder to calculate and usually require the involvement of an economist. Induced and indirect jobs mean that EB-5 investors who choose regional center projects are considerably more likely to be able to prove they created 10 full-time jobs for qualifying U.S. workers.

Qualifying Employees for Job Creation

Qualifying employees must fill the 10 full-time jobs. These individuals are U.S. citizens, lawful permanent residents, or other immigrants authorized to work in the United States. These individuals include refugees, conditional residents, temporary residents, or persons under the suspension of deportation.

An EB-5 investor cannot count non-citizens with a non-immigrant status, their spouse, children, or an individual not authorized to work in the United States as part of their job creation requirement.

Full-Time Employment

EB-5 investors will want to ensure that their projects structure employment to meet the 10 full-time roles. They must be filled by qualifying employees who work a minimum of 35 hours per week. For regional center programs, these full-time roles can also be created as an indirect result of the investment. They must also be a minimum of 35 hours per week.

Job sharing arrangements are a better alternative to hiring part-time employees as you can count the two employees as one full-time position towards your job creation requirement. Part-time roles cannot be combined to create a full-time position. Similarly, temporary, seasonal, or intermittent jobs will not qualify as permanent full-time jobs. A job must be expected to last at least two years to count towards this requirement.

Evidence Needed to Prove Job Creation

When an EB-5 investor submits their Form I-526, they must have committed their investment to a project. If the necessary full-time jobs have not already been created, the investor must be able to demonstrate that they will be created within the next 10 years.

They must submit evidence that the new commercial enterprise has created or preserved ten full-time positions for qualifying employees. EB-5 investors can prove this by submitting documentation, such as tax records, employment contracts, Form I-9, and hiring paperwork.

An EB-5 investor’s I-526 petition should include submitting a business plan demonstrating the job creation requirement.

Common Challenges and Solutions

Job creation can cause a headache for EB-5 investors, especially as most lack direct control over their investment projects. When choosing which project to invest in, it’s important to consider job creation.

There are three main considerations when creating a full-time job for EB-5 job creation:

  • Does the job meet the EB-5 program’s criteria as a full-time position with at least 35 working hours per week and hiring a qualifying U.S. worker?
  • Will the job created last beyond verification and contribute to the organization’s long-term success? If you’re investing in an NCE that is not a regional center project, sustainability is something to consider.
  • Maintain well-kept records and documentation to provide as evidence for job creation when submitting your I-829. You may want to work with a lawyer or financial advisor who can keep track of this documentation as evidence of business growth and employment.

What happens if an employee quits or is fired?

It’s worth noting that there is no impact on the job creation requirement if an employee quits or is fired. The requirement is for the creation of a specific job rather than the hiring of individual staff.

The job counts towards the requirement for 10 full-time roles, not the individual. The required number of full-time jobs must be maintained until the investor’s conditions of residence are removed following the approval of their I-829 petition.

You can reduce the impact of employees leaving by replacing them as quickly as possible to ensure that the job is maintained. By firing one employee and hiring a new one, you’re simply replacing the fired employee instead of creating a second job. Ensure that you keep documentation for this recruitment as evidence.

Gain U.S. Permanent Residence Through Investment

An EB-5 visa is the most efficient way to achieve permanent residency and U.S. citizenship if you have the capital to make the required $800,000 investment and create 10 full-time jobs for qualifying U.S. workers.

EB-5 Insider simplifies your path to U.S. residency and citizenship through investment, working with foreign nationals internationally to streamline the application process. We’ll help you obtain a permanent U.S. green card for yourself, your spouse, and any unmarried children under 21 for an investment of $800,000.

Start applying for an EB-5 visa today, or contact our team for more information.

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