Guidance for EB-5 Developers

Chapter 3: Job Creation

Chapter 3: Job Creation

© James C Wolf Mar 2021 (updated July 2021)
Developers consider EB-5 funding as part of their capital stack since EB-5 money typically comes with below market terms, as discussed in EB-5 Intro for Project Developers, Chapter 1:  Financial Considerations. Next a Project Developer will consider the Cost of EB-5 Funds.

After reviewing the Cost of EB-5 Funds, a Project Developer typically considers the EB-5 Job Creation, since this is the key motivator for an EB-5 Investor. The more certain the job creation, the more likely an investor will select an EB-5 project.

The Project Developer should also consider Regulatory Change and Competition with Other EB-5 Offerings.

Job Creation Considerations

Job Creation Period

At least 10 jobs must be created within a two-year period. This means that projects that will not create enough jobs for 3-4 years may not be found eligible.

To reduce risk to the EB-5 investors, Developers generally allocate at least 13-15 jobs per Investor.

Job Creation Estimate

An estimate of job creation may be calculated by use of the RIMS II model. The RIMS II model provides job creation coefficients (“multipliers”) for specific industries within the project location (county). The multiplier estimates the number of direct, indirect, and induced jobs created by an increase in output of $1 million within that industry and location.

“Output” is the total of [start-up costs] + either [operating revenues] or [operating costs] during the job creation period.

To estimate the total number of jobs, project Output is multiplied by the RIMS II job creation multiplier for the specific industries involved in the project at the project location (county).

USCIS policy “credits” the EB-5 investors will 100% of the jobs generated by the Project, regardless of the actual percentage of the capital stack funded by EB-5 investors.

  • Advising innocent partner’s counsel in EB-5 fraud litigation in California.
  • Guidance to EB-5 Forensic Accountants investigating collapsed EB-5 investment
  • Consulting on complex EB-5 cases.
  • Directing and coordinating work of investor representatives in India, Mexico, China.
  • Reviewing EB-5 fraud claims as to potential liability.
  • Advising on potential EB-5 fund raises.
  • Structuring and preparing source of funds documentation.
  • Providing outside counsel review of I-526 and I-824 filings.
  • Immigration counsel in lawsuits:
    • against developer alleging misuse of funds in New Jersey.
    • against regional center alleging mishandling of funds in New York.