Part II: EB–5 A -Summary of a Job Creating Enterprise

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How Much Do I need to Invest? How Many Jobs Does the Investment Need to Create?

 

 

Author’s note: In our last article, we explained what the EB-5 immigrant investor visa was not. In this article, we will discuss what the EB-5 immigrant visa is, and the basic requirements for it.

The Employment- Based Fifth Preference Immigrant Visa (EB-5) is an immigrant visa that affords qualified candidates permanent residency in consideration for their making an investment in the United States.

The very basic requirements of the EB-5 visa category are that the investor (1) invest $500,000, or $1 million, in a for-profit enterprise, (2) create 10 full time, 35 hour per week jobs per investment, and (3) sustain that investment for the term of the application process.

A. How much do I need to invest?

The immigrant visa program’s default  investment threshold is at least $1 million. But, this high threshold was expected to attract few investors. For this reason, the government added that if the investment was located  in a geographic area of the U.S. that needed economic development–a Targeted Employment Area (TEA)–the minimum investment threshold would be lowered to $500,000. 

According to regulations, a TEA is a geographic region experiencing unemployment at least 50% higher than the national average, or is a rural region, defined as a region falling outside a metropolitan statistical area  or the outer boundary of a city or town having a population of 20,000 or more. While investing in a TEA is a requirement under Federal Law to qualify an investor for the $500,000 investment  threshold, the boundaries of TEAs are defined by State Agencies, like a State’s Department of Labor, or economic development authority. Since each state has its own way of determining TEAs, state procedures should be consulted. It is a critical aspect of due diligence to make sure that a prospective project site falls within a TEA.

B. How Many Jobs does the Investment Need to Create?

At the heart of the EB-5 visa category, is job creation. One EB-5 investment must generate the minimum of 10 full time jobs. The requirement of 10 full time jobs has been construed to mean that an enterprise can create 10 full time–35 hours per week- “positions.” Creating so many jobs is not that easy. A close analysis of an investor’s  job creation projections oftentimes reveals that the jobs anticipated are actually part-time positions–not full time jobs as required.    

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