What is a good strategy for a pooled EB-5 direct investment project to allocate jobs to investors?

More information is needed as to the structure of the business. In general, each partner should invest the $500,000 or the $1 million and each investor should create 10 employees. If you are four, then the project should be either $2 million or $4 million, depending on your choice of investment, and create 40 employees.

It is probably best to allocate the jobs based on first filed, but before you invest you should make sure you have sufficient jobs to cover all investors. It is hard to understand why you would not use indirect job creation to minimize risk since it is legally acceptable if you affiliate with a regional center.

Each direct EB-5 investor is responsible for creation of at least 10 full-time positions (at least 35 hours/week per full-time positions). A comprehensive EB-5-compliant business plan will have to support this job creation of at least 50 full-time positions and must be overall credible. USCIS accepts reasonable allocation among investors in direct cases. To that end, you would want to ensure at least 50 full-time positions are created at the time of I-829 filing. Engage the services of an experienced EB-5 immigration attorney and business plan writer to competently prepare your individual I-526 petitions and business plan.

It can be done. The most successful strategies are to keep good accounting of the amount invested and ensure that the requirements of EB-5 visa are met. Advisably, consult an EB-5 attorney to properly address some of the issues associated with this type of proposal.

Since you each need to show the creation of 10 direct, full-time positions, the strategy is to hire a lot of people! Please consult with an EB-5 attorney to set up specific structural elements.

You and your four friends may pool funds and invest in a medium-scale hotel project as a direct EB-5 investment. However, to qualify, each individual must each show he made the minimum investment and created 10 jobs for U.S. workers. If the project is located in a targeted employment area (TEA), then each would only have to invest $500,000. If you are the only EB-5 investor and your other four friends are citizens, then all the jobs created could be allocated to your EB-5 investor petition. If each of you is a foreign national and seeks to qualify through an EB-5 investment, then you would have to create 50 direct jobs.

If all five of you are EB-5 investors then one of the main issues is to make sure there are 50 jobs created and that each investor is credited with the requisite minimum 10-job creation. Pooling investments for a direct investment should not be a problem.

As a small group of direct investors, you have the flexibility to come up with an allocation plan that works the best for you. Ultimately, however, each investor will want to show sufficient job creation at the time of I-829 filing. Thus, an easy approach is to allocate jobs based on the date of the I-829 filing. You will need to keep clear records of job creation and ensure positions are double-counted; USCIS will catch this.

If you are filing together, you want the 40 jobs to be created by the time the first one reaches the I-829 stage.

If I were partnering with my friends, if it does not seem fair to them that "first to invest, first to be allocated jobs" is suitable, then you could also consider who files a I-526 first, who receives a green card first, or if they want no impartiality. Then maybe you draw straws before you file your petitions to determine the order.

The NCE/issuer has free reign to decide how to allocate jobs to investors in pooled projects. It can be anything from the date the investor is accepted as a limited partner/member of the NCE, the date of I-526 filing, the date of I-829 submission, or anything else in between. Note that if no specific mechanism is outlined, USCIS still credits jobs on a first-in, first-out basis.

There are some obvious things you should consider and there are some less obvious ones. Because pooled direct investment programs can only count direct W-2 jobs toward the job-creation requirement, you need to make sure that the hotel you plan to build can actually create sufficient jobs, 50-plus, in your specific case. This might be unlikely considering that most hotel projects create construction jobs, which are considered indirect jobs. Since regional center projects can count indirect and induced jobs, in addition to direct jobs, hotel projects are attractive for them. On the other hand, restaurant chains and supermarkets that employ many full-time jobs could be a better bet for you. That said, you need to be able to operate the enterprise as well. While you should certainly focus on whether your project will be able to create the requisite direct jobs, the less obvious but vital consideration should be whether the enterprise you pick meshes with your skill set, interest and that of your partners. Many investors who are initially attracted to the direct investment route due to the possibility of having their money work for them and while waiting for the green card receive profits, but they eventually shy away from it and choose the regional center route due its relative ease of execution. Depending on your financial wherewithal, you might want to split your investment funds and consider to allocate part of your funds to a very well0vetted regional center project and the rest to an investment without having to worry about creating any jobs whatsoever. You can invest simply in the economic merits of the project.

It sounds like you may have an excellent concept. You should consult with an experienced investment attorney and a professional who has a background in writing USCIS-compliant business plans. I would recommend the business plan as your first step.