EB-5 Commentary

Counting Construction Jobs for EB-5 Regional Center Job Creation

Posted by Phil Cohen on Wed, Oct 14, 2015 @ 02:05 PM

Do Construction Jobs Count?construction resized 600

When starting an EB-5 regional center many want to know if direct construction jobs can be counted.  The applicable rule for counting construction jobs in an EB-5 regional center project is that the construction time for the project must be two years in duration, from start to finish. If the project qualifies, direct construction jobs can be counted, but due to the nature of construction (teams work for relatively short time periods) these jobs must be calculated by an economist. Indirect construction jobs calculated by an economist are always allowable.

How is 2 Years Defined?

There is some question as to when the construction period starts; is it when demolition or digging begins or is it when concrete is poured (i.e. the beginning of vertical construction)?  USCIS does not have a definitive guideline on this point, however, we do try to encourage clients to try to focus on vertical construction in order to mitigate the risk that USCIS may not view demolition or digging as construction.

3rd Party Verification

Of course, as soon as this construction allowance was declared, there were many who started to say, "we can make it last two years."  Unfortunately it's not that easy.  USCIS has taken steps to prevent people from exaggerating construction timelines by asking for third party verification of estimated construction times from independent experts. 

Doing it Right

The ability to count construction jobs is a huge benefit to the EB-5 program, because they are easy to document and they are relatively easy to fulfill.  Be sure, however, that if your regional center is planning to count construction jobs that it does so in a calculated and realistic way.  Remember too that if you are calculating construction jobs based on expenditure estimates, you should be careful about using conservative expenditure estimates.  While conservative estimates are desirable at most any other time, if your estimates are guessing high on expenses, and you come in under budget, the applicable construction job calculation for your investors at the I-829 stage (when they are seeking to get conditions removed from their green card) will be based on the actual funds expended.  This point is true of course for all expenditure-based job creation estimations.

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Phil Cohen is the founder and President of Strategic Element, a company that focuses on developing regional centers, EB-5 business plans, economic impact reports, feasibility studies and custom 'direct' EB-5 projects for its clients (www.strategicelementconsulting.com). 

Tags: Construction, EB-5 Project, EB-5, EB-5 Regional Center, job creation