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How can an NCE invest EB-5 capital in multiple projects?

Can an NCE create no direct jobs itself, but use the EB-5 investor''s capital to invest in multiple job-creating entities (say 20 percent each in five different projects) and use the direct and indirect jobs from those multiple job-creating entities to satisfy USCIS requirements? If so, if the NCE itself is not in a TEA, but the job-creating entities are, would the investor''s capital be considered as invested in a TEA?

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    Julia Roussinova

    Immigration Attorney
    Answered on

    You will likely need to overcome various issues in this scenario, including inability to use indirect/induced job creation (unless in a regional center setting), the EB-5 investor''s managing of the entity, principally doing business in a TEA, etc.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    In a direct EB-5, the NCE, or its wholly-owned subsidiary, must directly create the required number of full-time jobs. So, in your example, if you spread the pooled EB-5 investors'' capital into five different projects, you must show that the job creating entities are wholly-owned subsidiaries of the NCE and that the total number of full-time jobs created can cover the total number of EB-5 investors (i.e., 10 full-time jobs for each EB-5 investor). As for the TEA issue, the NCE must be "principally doing business" in a TEA. If the main business activities and the employees in the five projects are located in a TEA, you would have to make the argument, and have the USCIS agree, that the NCE is principally doing business in the TEA.

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    Kenneth C Wright

    Securities Attorney
    Answered on

    An NCE creating no direct jobs would have to invest in affiliation with one or more regional centers to get credit for qualified indirect jobs. Investing in multiple projects is not inconsistent with the EB-5 program, as currently interpreted by USCIS. Doing so with a single $500,000 investment would not likely be practical due to the extra time and cost associated with integrating the information and guiding the USCIS through it. However, NCEs that pool EB-5 investments in scale may find the extra time and cost warranted in light of the potential benefits of investment diversification. A few fund managers are exploring this approach. In order to get TEA credit, the job creating activity should be in a TEA.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    USCIS policy has suggested that "portfolios" of projects may be acceptable, and associating the NCE with a regional center would allow for indirect job creation. With such a structure, retaining EB-5 counsel with experience with EB-5 business structures is essential.

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    John J Downey

    Immigration Attorney
    Answered on

    You are in danger of receiving a lot of RFEs on this type of project. You will be asking USCIS to make determinations on a number of issues. This can only lead to delays in receiving approvals. If you wish to proceed you will need competent advice from counsel.

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    Oliver Huiyue Qiu

    Immigration Attorney
    Answered on

    To diversify the $500,000 fund into several JCE would not work. There are problems with locations and job creation for each project that are impossible to resolve.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    If you are not a designated regional center, you may not use the indirect or induced jobs formula. Also, as EB-5 investors must be actively involved in day-to-day management of the NCE or in a policy making role at least to qualify as active investors under the law, I do not know how your scheme will satisfy the EB-5 requirements if NCE is passively investing into multiple job creating entities. You will need to show a nexus between the NCE and the job-creating entities, and how NCE and its board members, i.e. EB-5 investors, controls and manage the business of those entities. TEA will also be problematic with this scheme - much safer to do the full $1 million EB-5 investment.

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