Can remote workers be counted in an EB-5 project? -

Can remote workers be counted in an EB-5 project? Staff

By Anayat Durrani

At the start of the pandemic, office workers were sent home in March 2020 as quarantining, masks and social distancing became the new norm. Since then, the concept of remote work has become more mainstream with some still holding onto the work option now that the pandemic is in the rearview mirror. But how has that impacted EB-5? Can remote workers be counted in an EB-5 project?

“Remote work was the norm during the Covid 19 pandemic and complying with the shelter at home/remote work rules should not negatively impact an EB-5 business,” says Belma Chinchoy, founding attorney of Immigration General Counsel, Iyer Demirovic Chinchoy LLP. “However, these were temporary rules and a direct EB-5 business must comply with the overall spirit and intent of the EB-5 regulations to ensure compliance.” 

Nearly three years after the COVID-19 pandemic upended U.S. workplaces, about a third (35%) of workers employed in jobs that can be done remotely are still working from home, according to a new Pew Research Center survey. 

“A Direct EB-5 business should hire employees whose primary residence is within a “commutable area” of the TEA/HUA or rural business location. If these employees occasionally work from home, it should not result in a violation of EB-5 job creation rules,” says Chinchoy.

How do remote and hybrid workers count in the EB-5 industry?

Some 41% of workers with jobs that can be done remotely are working a hybrid schedule, which is a mix of working from home and the office during the week. This is up from 35% in January 2022, per Pew Research Center.

“Remote workers should count as long as they are in the United States as qualified U.S. workers working at least 35 hours per week and receiving annual W-2 withholding tax forms,” says Fredrick Voigtmann, law office of Fred Voigtmann, P.C. “Part-time positions and independent contractors do not count.”

However, Voigtmann says it can be an issue when the new commercial enterprise (NCE) is located in a rural or high unemployment TEA and workers are physically working remotely.

“In order to qualify for the lower threshold investment amount of $800,000, the NCE must be principally doing business in a TEA,” says Voigtmann.

“Where you have workers working outside the US, it raises the questions of whether the EB-5 funding is in fact creating jobs within the US economy and its impact on the economy. Where we are unable to show such impact, then those jobs cannot be included,” says Shahzad Q. Qadri, partner, Wong Fleming. 

How does USCIS classify remote workers for EB-5?

Per the USCIS Policy Manual on “principally doing business,” Voigtmann notes that one of the four factors USCIS considers in whether the NCE is principally doing business in a TEA is the location of any jobs directly created by the NCE. He says if the workers are remote, this could be the deciding factor used by USCIS to determine if the location qualifies as TEA when no other evidence/factors are submitted. 

“If, however, the EB-5 petitioner can provide sufficient evidence regarding the other factors, i.e., expenditure of capital related to job creation, the NCE’s day-to-day operation, and the NCE’s assets used in job creation, then the petitioner might be able to overcome the first factor and argue that the NCE is indeed principally doing business in a TEA, notwithstanding the location(s) of the remote workers,” says Voigtmann.

While the Covid-19 pandemic had an impact on the interpretation of several rules, Chinchoy says the policy on job creation in direct EB-5 is clear that qualifying EB-5 employees are to be employed at the business’ principal place of business, located in a set aside geographic location like a TEA/HUA or rural or high “if qualification for such set aside is requested in the investor’s I-526 petition.”

“As a general rule, and for entrepreneurs who are risk averse, the EB-5 jobs should be created within the geographic vicinity of the project (i.e. the city, county), any deviation which requires job creation beyond the immediate vicinity should at the very least be documented clearly in the business plan and/or economic study,” says Qadri.

Voigtmann says if an EB-5 investor invests at least $1.05 million, “I would argue the location of the employees, remote or not, is irrelevant.”

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