What is the difference between direct jobs and indirect jobs in EB-5?
If our business plan is to build and open a hotel, what specifically can we count as an indirect job if we become a Regional Center? Do construction jobs count as direct or indirect? If we hire consultants, do those jobs count for the total of 10? Does it matter how many of the jobs we create are direct?
Direct jobs are actual full-time positions created by your business. Indirect jobs are created by other businesses that come into existence due to the economic growth of your business. Construction jobs count only if they last in excess of two years. Consultants are generally independent contractors and do not count.
A requirement that 10 jobs have to be created for two years is basic to any EB5 petition. An individual EB5 petition can only count direct jobs. Those are people directly employed by the business/operation. Regional Centers can use indirect jobs in their formulas. Indirect jobs are jobs that are ancillary to the project. For example, employees of other businesses that would be servicing that project/business. Construction jobs do count if they are full time only. We are available if you need any further information.
Direct jobs are those that are created directly by the entity at hand, indirect are those within the supply chain. It does not matter whether they are direct or indirect in a EB-5 RC scenario. The key is that it has to be full time jobs and ten jobs per investor.
You may only count direct jobs unless you are an approved Regional Center. This means full-time employees (not independent contracts), but you can include any employees you have hired for your business.
Direct jobs come from counting W2. Indirect jobs mean that even a regional center does not hire a required number of employees, based on an economic model, it creates certain number of jobs.
Direct jobs are the jobs that the business itself will hire. The indirect jobs are the jobs that will be created by other businesses that will be located around the business that was spurred on by the economic growth of that business. Construction jobs will be counted as indirect jobs if it will last more than 2 years. The consultants are not counted because they are independent contractors not employees of the business.
Direct jobs are actual identifiable jobs for qualified employees located within the commercial enterprise into which the EB-5 investor has directly his or her capital. Investors who have invested in a commercial enterprise that is not affiliated with a regional center may be credited with direct jobs. Indirect jobs are those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a regional center by an eB-5 investor. Investors who invest in a commercial enterprise that is affiliated with a regional center may be credited with direct jobs and indirect jobs. There is a subset of indirect jobs that can be credited to investors who invest in a regional center-affiliated commercial enterprise that are referred to as induced jobs. Induced jobs are those jobs that are dependent upon the purchases of persons in direct and indirect jobs. For example, workers who are directly or indirectly employed as the result of a highway construction program might spend some portion of their wages in their communities at grocery stores, auto repair shops and movie theaters. Historically, construction jobs have not been counted as direct jobs because they are seen as temporary and transient but the recent trend in USCIS is to count these jobs as permanent jobs if they are created by the petitioner''s investment, and are expected to last at least two years; inclusive of when the petitioner''s Form I-829 is filed. In light of the foregoing, your hotel project sounds like a traditional stand alone EB-5 petition and is not affiliated with a regional center. Therefore, the minimum 10 jobs created must be direct jobs, not indirect or induced jobs. Consultants are generally paid on 1099 form rather than W-2s; thus, they are viewed as independent contracts and not employees.
Direct jobs are jobs that are created directly by the Investment Project (Direct Individual Investment or Regional Project), where the employee is on payroll and where the Employer can produce I-9''s. Indirect jobs are ones that are produced in connection with activities of the investment, but where no I-9''s are issued by the Investment Project. For EB-5 purposes, both direct and indirect jobs are counted if the investment is being made in a Regional Center Project; however, only direct jobs are considered by USCIS for Direct Investments into individual projects.
Indirect Jobs are generally jobs that have come into existence in separate businesses as a result of the creation of your hotel. This information has to be supported by economic studies and market analysis. You should be working closely with an Immigration Attorney in creating your business plan and market/economic studies. It is better to set up a strong planning foundation now to avoid RFE (requests for evidence) or denials in the future due to poor planning.
Philip H Teplen
Jobs, be they indirect or direct must be permanent which generally precludes consultants, etc. however, your question is far too vast to answer better in the abstract. I would be happy to work with you.
In the Regional Center context, indirect and induced jobs are included through the use of economic methodologies that apply multipliers. To determine the number of jobs that would be created by your project for EB-5 purposes, it is advisable to consult with and engage an economist who is familiar with the EB-5 program and regional center concept.