When it comes to determining which positions can be counted toward a project’s total number of jobs, it is important to distinguish between the distinct rules that apply to the two different investment types: direct investment and regional center–sponsored projects. For direct EB-5 investment, these types of projecs are permitted to count only directly created positions toward their job creation quota. These directly created positions must be full-time (minimum 35 hours per week) and must be assigned to legally authorized U.S. employees. They must also be generated by the new commercial enterprise (NCE) and be visible on its payroll. Generally, directly created positions are duties associated with the daily management and running of the business. The NCE for a direct EB-5 investment is in charge of generating a minimum of 10 jobs per EB-5 investor.
On the other hand, with regional center–sponsored projects, the NCE and job-creating entity (JCE) are two different entities. Regional center projects are permitted to count induced and indirect positions toward their total job number. Because the scope of regional center projects is usually larger than that of their direct counterparts, these projects often consist of numerous units, which could include subsidiaries or branches of the same business with varied locations, all of which can count toward the project’s total job number.
But investing funds into a company’s subsidiary or branch is not exclusive to regional center projects. Direct EB-5 investors are also permitted to do so, and in these cases, the parent company of the branch or subsidiary is regarded as the NCE. As such, the subsidiary or branch that is the recipient of EB-5 investment funding is in charge of creating jobs. In the event the funding is divided amongst numerous branches, each branch is responsible for generating employment. Investors with projects located in a targeted employment area (TEA) should note that, in the event the parent company is eligible for the reduced investment sum, the subsequent daughter company must also be situated within the TEA. If this regulation is not followed, the investor will not be granted the lower investment sum.
