Any for-profit enterprise engaged in lawful business activities can qualify for an EB-5 investment. The business must be able to create or, in the case of troubled businesses, save at least 10 full-time jobs for qualified U.S. workers. Additionally, the business must be classified as a new commercial enterprise (NCE), which typically means that it was created or restructured after November 29, 1990.
Even though many legitimate businesses from various industries could fulfill these basic criteria, projects that can easily create or save the required number of jobs are best suited for the EB-5 program. Generally, the ideal businesses for EB-5 investments are new construction projects that produce ongoing operations jobs and result in a net increase in local employment.
Why are such construction projects ideal for the EB-5 program?
- Investing in a troubled business with the objective of saving at least 10 jobs can be impractical; it is usually difficult to show U.S. Citizenship and Immigration Services (USCIS) that the enterprise is genuinely distressed. Proving that the required number of jobs were saved can also be challenging. In contrast, creating jobs through new construction projects is more straightforward.
- Construction projects that produce operation jobs as well as construction jobs through business revenue can reach the employment creation requirements more easily.
- The primary requirement of the EB-5 program is employment creation, so the eligible projects must result in a net job increase for their areas. USCIS asks for an economic report proving that the EB-5 project will not cause other jobs in the area to be lost. For instance, a new shopping center built near an older mall could drive the stores at the mall out of business, causing workers to lose their jobs. Even though the shopping center created new jobs, the net increase in jobs could still be much lower than the requirement.