Questions and Answers: Uses of Capital

Question: Some within USCIS seem to think that all EB-5 funds must be used directly to create jobs, almost as if it is put into a trust fund from which only wages can be paid. In reality, capital may very likely more efficiently create more jobs by putting it into capital improvements, equipment etc. or even to pay off old high interest loans or to buy out owners who are standing in the way of more efficient operation. All that should matter is that the invested capital is spent in such a way that the business plan projects enough jobs to satisfy the EB-5 requirements and that ultimately those jobs are in fact created. Is this correct?

Response: USCIS will determine whether the funds must be used to directly create jobs based upon the economic model and business plan submitted and approved with the petition. The capital investment must be fully infused into the job creating enterprise most closely responsible for the capital investment activities that will create the jobs. The approved business plan guides the expenditure of these funds which could include purchases of items such as property, inventory, equipment, office supplies, wages, etc. From an economic perspective, these purchases generate further indirect and induced job creation.

Taken from USCIS Quarterly EB-5 Stakeholders Meeting on June 30, 2011