How Do Regional Centers Count Indirect Jobs?

A good regional center will have a strong Economic Report that shows how many indirect jobs will be created from their EB-5 project.

These EB-5 Economic Reports use methodologies approved by USCIS to measure the impact that a project will have on the local economy.

Very simply stated, regional centers can use these methodologies to plug-in various factors into a model to determine how many indirect jobs will be created once an EB-5 project is completed. One example of the types of factors that could used are: the region the project is located in, the type of industry, and the amount invested in construction.

Regional centers can count indirect job creation, which is a major advantage over the regular EB-5 Program. The regular EB-5 Program can only count direct jobs and typically an EB-5 project creates far fewer direct than indirect jobs.

As an example, a resort may only hire 50 people to run the valet, reception, management and housekeeping (direct jobs), whereas, that same resort may create nearly 200 indirect jobs. Since each EB-5 investor needs to create 10 jobs in order to receive their green card, each EB-5 project is limited in how much capital it can raise. An EB-5 project that projects the creation of 50 direct jobs can only attain 5 EB-5 investors and $2.5 million in capital, while an EB-5 project that projects the creation of 200 indirect jobs can attain 20 EB-5 investors and 10 million in capital investment.

When EB-5 investors arrive at the Form I-526 stage, both investors in the Regional Center Program and the regular EB-5 Program submit their economic reports and job creation projections to USCIS for approval. At the Form I-829 stage, however, EB-5 investors in the Regular EB-5 Program must prove direct job creation by submitting payroll documents and tax records to USCIS. Investors in the Regional Center Program, at the Form I-829 stage, do not have payroll documents or tax records, instead, what they show USCIS is completed construction or nearly completed construction on the EB-5 project. By showing USCIS that the investment capital was spent exactly as outlined in the economic report, indirect jobs will be viewed as successfully created.

That is why it's so important to select a regional center and EB-5 project team that you can trust not only to create a solid Economic Report, but one that will carry out the business plan as outlined in a timely and efficient manner.

For more information on what to look for in a regional center EB-5 project, click here.

 

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