Immigrating through an EB-5 investment hinges heavily on the job creation of the regional center.  Without creating jobs, there is no way a project will result in an approved green card application.  Economic stimulation through job creation is the express mission of the EB-5 and the regional center pilot program.  What’s more, the approval of your green card application is not all that is riding on the center’s job creation methodology—the removal of conditions on the green card (which happens after two years) and your full permanent immigration status also relies on it.

The ability of the center to actually come through on their job creation forecasts is integral to achieving full permanent residence in the U.S.  At the completion of the two-year conditional visa period, the number one factor that the USCIS will be looking to see proven is the implementation of the center’s business plan and the actual—not proposed or forecasted—creation of at least ten jobs which can be directly attributed to your $500,000 (or 1 million if that is the case) investment.

To say the very least, the job creation methodology of the regional centers you are considering is crucial; therefore, your advisor will be focusing in heavily on evaluating their methodology, specifically looking to see that the jobs created, either indirectly or directly, can be solidly accounted and their projections reproduced.  In addition, your advisor will dig deeper to try to determine what else backs up the center’s original plan.  As he or she does this, he will put the center’s plan to the test, asking questions such as:

•    How did the center arrive at its calculations for job creation?

•    What documentation and analysis supports the number put forth by the regional center?

•    Do these numbers make sense?

•    How will job creation be monitored as the project progresses?

•    Is there a plan to remedy the situation if job creation is not proceeding as planned?—In other words, a plan to make up for your lost, but still required, ten jobs?

Along with determining the number of jobs created, you need to know just what that job creation looks like.  You need to know what types of jobs are being counted toward the requisite number.  You need to know if those jobs are positions that are directly created and attributable to your investment money, or if they are projected jobs that will be induced or indirectly created by extension of the business plan and project funds.

Certainly the great advantage of the EB-5 regional center program is that indirect job creation is accepted by the USCIS. This means that you need to be sure of the center’s job creation methodology, and to do that you will most certainly want the added security of having a professional researching that and double-checking the information that is used to produce the number and the conclusion that has been arrived at. He or she will look to see that not only does the center have a plan for creating jobs, but that at minimum ten of those positions will fulfill the requirements of being full-time positions (remembering that part-time positions do not qualify), and that those positions are solely attributable to your investment money, as there is no overlap or “sharing” of job creation allowed between investors.

To give you some idea of how complex an undertaking proving job creation is, here are some of the different ways that regional centers and the USCIS go about proving that your investment will result in jobs being created.

As we know, the limited liability company or limited partnership (the regional center project) that you invest in does not have to directly hire anyone.  Instead, the center’s plan may be to arrange for the businesses and loan recipients who borrow or obtain the funds to produce the jobs by directly creating positions and filing them through direct hires (in other words, the person or entity who receives the money hires, ten workers).

Another common scenario in the case of real estate-based projects is that the businesses who rent the developed space will directly hire a set amount of people into full-time positions they have created.  To determine qualification of the jobs created, the CIS will “plug” these numbers into an econometric model.  That model will have certain multipliers based on each specific industry.  To be successful, the model should return at least ten new jobs created based on that model per each investor.  These must be new jobs, and cannot be comprised of transferred positions that are simply relocated into the regional center’s geographical area.

Another possibility is that the regional center project had its job-creation model approved based on a specific number of jobs being created for a certain amount of investment money.  For example, the partnership (regional center) may lend money to a private company or a government agency who in turn agrees to invest a specified amount of money.  These figures are again “plugged into” an econometric model that projects the numbers of jobs created for certain levels of investment, and for certain amounts of money spent by the borrower.  When this is the case, the project must be able to illustrate the model, and also prove that the borrower has spent that requisite amount of money to have resulted in the creation of at least ten new jobs.

Job creation analysis is a highly complex undertaking. Some centers are partnered with Universities and leading economists for the projection and calculation of job creation.  That is not to say that you can trust in a job creation claim from a regional center just because they have a big name University or professional on their list, but just to show that this is no simple matter, and that it is one that requires thorough analysis by an experienced professional.  A good advisor will have the experience working with centers, their plans and projects, and the economic tools that indicate the reliability of a regional center’s job creation projections.

Too often the viability of a project’s job creation methodology is taken for granted by investors who are given only the rosiest of projections by EB-5 centers.  But with everything riding on this one factor, there is no room for that kind of error.  You must be as sure as you can be that the jobs created in your name will be there when the time comes to prove them.

Next we will look at Location considerations of regional centers. In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5