EB-5 job creation explained: the 10-job rule, direct and indirect jobs

According to the USCIS Policy Manual, each EB-5 investor must create at least 10 full-time jobs for qualifying U.S. workers through their investment in a new commercial enterprise. Three definitions do most of the work:

Full-time

Generally a position requiring at least 35 hours of work per week.

Qualifying employee

Generally a U.S. citizen, a lawful permanent resident or another individual authorized to work in the United States.

Excluded jobs

Jobs held by the investor, the investor's spouse, or the investor's sons or daughters do not count toward the requirement.

Job creation is assessed at the Form I-829 stage, when the investor asks USCIS to remove the conditions on residence. It is also an element of the original petition, which typically includes the project's business plan and employment projections. See EB-5 forms and the filing process.

The type of jobs an investor can count depends on whether the investment is standalone (direct) or made through a regional center.

Regional center investments may count direct, indirect and induced jobs (induced jobs arise from spending by workers in the project and its suppliers) using reasonable economic methodologies. This flexibility is a main reason most EB-5 capital flows through regional centers. See regional center vs. direct investment.

For regional center projects, indirect jobs are estimated rather than counted one by one. Economists use economic impact models, often called input-output models, which estimate how many jobs result from a given amount of spending in a particular industry and region.

• Inputs may include construction spending, operating expenses or projected revenue.
• Validity. The model and its use must be reasonable and economically or statistically valid, and the assumptions behind it must be supported.
• Direct employment is still documented through payroll and tax records.
• Evidence at I-829. USCIS will generally look for evidence that the spending or revenue the model relied on actually occurred.

An illustrative example

Suppose a project's economic report shows it supports 100 qualifying jobs and it has 10 EB-5 investors. If the evidence and the allocation rules support it, those jobs might be allocated 10 to each investor. This is a simplified illustration, not a description of any real project. With exactly 100 jobs for 10 investors there is no margin at all, which is why investors also look at the job cushion described below.

When many investors fund the same project, the jobs it creates have to be divided among them. The same job cannot be counted repeatedly beyond what the project actually supports.

• USCIS may recognise reasonable allocation agreements set out in the offering documents.
• Where there is no such agreement, regulatory allocation rules apply.
• Ask how the project allocates jobs among its EB-5 investors and between EB-5 and any other funding sources.

If the project creates fewer jobs than needed, the investor's Form I-829 petition may be difficult to approve. The outcome generally depends on the evidence, the timing, the rules that apply to the petition and whether the jobs have been created or can be created within a reasonable time. A shortfall is a real immigration risk, separate from the financial risk of the investment. See understanding EB-5 investment risk.

A job cushion (or buffer) is the number of projected jobs above the minimum needed for all investors (10 times the number of investors). A larger cushion may leave more room if spending is lower or slower than planned, but it does not remove the risk of a shortfall, and it is only as reliable as the assumptions behind it.

1. 01

   Step 1: Read the economic impact report

   Identify the model used, the inputs and the total number of jobs projected.

2. 02

   Step 2: Compare jobs with the investor count

   Divide the projected qualifying jobs by the maximum number of EB-5 investors and compare with 10 per investor.

3. 03

   Step 3: Test the assumptions

   Check whether the construction budget, schedule and spending assumptions are realistic, and what happens if costs or timing change.

4. 04

   Step 4: Check the indirect share

   Confirm how much of each investor's requirement relies on indirect jobs, and that it fits within the 90% limit and any construction-job limits.

5. 05

   Step 5: Get independent review

   Ask a qualified U.S. immigration attorney to review the methodology and allocation terms before you invest.

• See where job creation fits among the other EB-5 requirements.
• Use how to evaluate an EB-5 project and the due diligence questions when reviewing a project's job projections.
• Read about the Form I-829 stage where job creation is assessed.
• To have a project's job methodology reviewed for your own case, request a consultation to be connected with a qualified U.S. immigration attorney.