The EB-5 job creation requirement is one of the basic program criteria that investors must fulfill. It aims to ensure that EB5 investments will create the necessary jobs and help reduce unemployment. The vast majority of EB-5 investments are made in new commercial enterprises (NCEs), through which investors must create and sustain at least 10 permanent, full-time jobs. However, it is possible for an investor to satisfy this requirement without creating new jobs. Instead, one can preserve existing jobs by investing in a troubled business.
According to United States Citizenship and Immigration Services (USCIS), a business qualifies as “troubled” under the EB-5 program if it is at least two years old at the time of investment. Moreover, the business must have suffered a net loss over the 12- or 24-month long period before the investor files their I-526 petition. This loss must be of at least 20% in the entity’s value or net worth.
EB-5 applicants who choose to invest in troubled businesses must be aware of the different job creation criteria between troubled businesses and NCEs. Those who opt to invest in NCEs are required to create a minimum of 10 full-time jobs. In contrast, investors in troubled businesses can create or preserve existing jobs; they do not necessarily have to create new positions.
For instance, let’s say an EB-5 applicant opts to invest in a troubled business that has 10 existing employees. In this case, the investor simply needs to ensure these positions are preserved. However, if a troubled business has only nine existing employees, the investor must preserve these positions and create one new job to fulfill the EB-5 job requirement.
When evaluating whether a troubled business’s jobs have been preserved, USCIS considers the economic analysis of the business and employment numbers. Investors in troubled businesses must demonstrate to USCIS that the number of employees when they file their I-829 petition is not lower than pre-investment levels.
