The Output of an economy is the amount of production in dollars, including all intermediate goods purchased and value-added (labor, capital & profit). We can also think of output as sales for both final goods and services and intermediate goods and services. Output is dependent upon consumption in the area, state government spending, investment and exports of the industries in the region.
The Employment variable in the model is made up of historical data from the Bureau of Economic Analysis (BEA).
Population is a key variable in the model regional analysis that affects the potential labor force, government spending and consumption.
The biggest advantage of our Regional Center, rather than direct EB-5 investment, is the job creation requirements. Direct EB-5 investments are required to create 10 direct jobs. Projects working with our Regional Center are still required to create 10 jobs per investor; however, they can account for direct and indirect/induce jobs. Either the RIMS II or IMPLAN econometric analysis models are used to calculate indirect and induced job creation.
Less involvement is required in the day-to-day operations of the project, for EB-5 investors working with our Regional Center. Investors are able to take a passive role in the company they are investing in, such as a limited partner. When individuals invest directly into a project, they are required by USCIS to take a more active role in business operations, often times having a voting seat on the board of directors, and/or holding a key management position.
JOB CREATION REQUIREMENTS
Job creation is a main focus of the EB-5 program and the United States Citizenship and Immigration Services (USCIS). In a 2012 study by IIUSA, the number one reason for USCIS denials of investor’s petitions to become U.S. permanent residences (I-829) revolved around job creation issues. The Southeast Florida EB-5 Regional Center stresses the importance to minimize the chances of denials based on job creation, by leaving a buffer of projected jobs with the projects we represent. For example, a project (in a TEA zone) with an anticipated job creation of 400 (direct and indirect/induced) could support $20M in EB-5 financing, but the recommended funding mix may only include $10M in EB-5 financing. We work with each individual company to determine the right EB-5 funding mix.
For each EB-5 investor that invests into a project at least 10 (direct or indirect/induced) full-time jobs for qualifying U.S. workers must be created within two years of the investment. Full-time employment is considered someone who is benefited and working a minimum of 35 hours per week. A qualified U.S. worker includes U.S. citizens, permanent residents or other immigrant authorized to work in the United States. This does not include independent contractors. According to the USCIS, any jobs filled by the EB-5 investor and his or her family members cannot count towards the 10 new jobs.
Indirect and induced jobs are calculated by IMPLAN or RIMS II economic analysis models and show those jobs that have/or are anticipated to be created collaterally. Southeast Florida EB-5 Regional Center determine job creation based on the IMPLAN econometric analysis.
In order for construction jobs to count as direct jobs, the construction must last consecutively for at least two years. If a construction project is not reasonably expected to last two years, then only the indirect and induced jobs can be counted.