EB5 Investors Magazine (English Edition) Volume 5, Issue 1 - Page 76

I n recent years, a growing number of EB-5 investors residing in the United States have begun to show great interest in EB5 direct investment projects. The hope is that by directly managing their own business enterprises, they will not only be able to protect their investments by exercising direct control, but also lay the economic groundwork for their future lives as U.S. immigrants. EB-5 direct investment cases differ from EB-5 regional center cases and the biggest difference is that during the application process, EB-5 direct investors must create actual direct job positions, namely, form W-2 employees for whom the employer files income tax returns. This is unlike regional center investments, which permit the counting of any indirect job position created based on econometric modeling. The smooth progress of the EB-5 application depends on the EB-5 investor and if the creating direct job positions meet the legal criteria. The requirement is ten positions that need to be at least 35 hours of work weekly and that the positions are filled by qualifying employees. Exactly what kinds of employees are EB-5 direct investment qualifying employees? Are they limited to green card holders and citizens? In recruiting these kinds of workers, what kinds of issues should the EB5 investor pay close attention? IN EB-5 DIRECT INVESTMENT CASES, WHO COUNTS AS QUALIFYING EMPLOYEES? Currently, the many materials available include the United States Citizenship and Immigration Services own presentation manuscripts, all of which only list citizens or permanent residents. However, according to 8 CFR §204.6(e), qualifying employee actually encompasses far more than citizens and permanent residents. The specific provision is as follows: “Qualifying employee means a United States citizen, a lawfully admitted permanent resident, or other immigrant lawfully authorized to be employed in the United states including, but not limited to, a conditional resident, a temporary resident, an asylee, a refugee, or an alien remaining in the United States under suspension of deportation. This definition does not include the alien entrepreneur, the alien entrepreneur’s spouse, sons, or daughters, or any nonimmigrant alien.” From the statute, we see that non-immigrants holding short-term visas certainly cannot be counted as EB-5 direct investment qualifying employees. This includes workers who must apply for work visas (H, L, O, etc.) and 75 EB5 INVESTORS M AGAZINE