Job Creation and the EB-5 Visa
The term EB-5 Visa translates to 'employment based, fifth preference', by definition this implies the visa category is based around the creation of new jobs.
The 2 different EB-5 Visa Programs consisting of the Standalone Direct EB-5 Visa Program which requires a $1m investment or the EB5 Regional Center Pilot Program which requires a $500,000 investment have different job creation requirements. The Standalone Direct EB-5 Visa Program requires 10 jobs to be created directly in the commercial enterprise; the EB-5 Regional Center Program requires 10 jobs to be created either directly, or indirectly of the commercial enterprise.
Let's explore the difference between direct and indirect job creation requirements:
- Direct jobs are actual recognizable jobs for qualified employees, (An "employee" is an individual who provides services or labor in exchange for compensation. "Full time employment" requires a minimum of 35 working hours per week) hired within the commercial enterprise the EB-5 investor chose to invest in.
- Indirect jobs are those shown to have been created indirectly or as a result of capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor.
USCIS defines indirect jobs as those held by persons who work outside the newly established commercial enterprise. Indirect jobs include equipment manufacturers and services used by a commercial enterprise.
How do EB5 Regional Center Projects create so many jobs?
A question often asked is 'how do EB-5 visa projects create so many jobs'? The answer here generally comes in the form of the 'Indirect Jobs' that are created as a result of the capital expenditure and visitor spending into the region combined with ongoing revenues of the project and economic impact to surrounding businesses.
The indirect jobs are estimated using various input-output economic modelling techniques to calculate the job creation potential of projects within a regional center.
These economic models produce multiplier tables which are applied to input data (such as the number of direct jobs provided by a project developer), these figures are then multiplied to show the impact across all other industries.
The EB-5 Visa Economic Modelling Techniques
USCIS has accepted input/output models as "reasonable methodologies" to calculate the job creation ability of projects within a designated regional center.
Examples of USCIS-approved input/output models include the following economic models:
- RIMS II - Regional Input-Output Modeling System
- REMI - Regional Economic Models, Inc.
- REDYN - Regional Dynamics Economic Analysis Model
- IMPLAN - Impact Analysis for Planning
These economic models use use data from various agencies including the Bureau of Economic Analysis and U.S. Census Bureau.
The models are able to determine inter-industry relationships, using input data such as estimated revenues and direct jobs in the new EB-5 development to forecast the business effects across other industries. For example, the development of a new hotel and resulting business impact to the restaurant down the street.