Does the EB-5 allow remote workers? Where is the business with remote workers located for purposes of the TEA?

The EB-5 immigrant visa provides permanent resident status (also known as a “green card”) to those who invest at least $1,050,000 into a business in the United States. If the business is located in a rural or high unemployment area (called a targeted employment area, or TEA), the investment amount can be reduced to $800,000. The EB-5 applicant must show that their investment led to the creation of at least ten jobs for US workers. For an overview of the EB-5 requirements and application procedure, see here.

As we described in an earlier post about the targeted employment area (or “TEA”), here, a TEA is an area that, at the time the EB-5 investment is made, is either rural or an area experiencing high unemployment. The purpose of a TEA is to focus foreign investment into areas that especially need it, particularly geographical areas where jobs are scarce.

With many employers utilizing remote workers, a question frequently arises regarding whether remote workers can count toward the EB-5 requirement that ten jobs be created from the required investment. If so, how is the location of the business determined for purposes of the TEA, if the workforce (or a portion of it) is remote? In this post, we will consider each question in turn.

To qualify for an EB-5 green card, the applicant must make an investment into the EB-5 enterprise, and that investment must create full-time employment positions for at least ten qualifying employees. “Full-time” is defined as at least 35 hours per week. A qualifying worker would include U.S. citizens and lawful permanent residents, but would exclude nonimmigrant visa holders.

As long as the employees satisfy these requirements, there is no rule that says they cannot be remote workers. That being said, it is recommended that they be physically inside the United States, and that they be issued a W-2 form to document their compensation and proof of employment.

To qualify for the lower, $800,000 investment amount, the EB-5 enterprise must be “principally doing business” within a TEA, which is defined as a rural area or an area of high unemployment. When the EB-5 enterprise employs remote workers, it can be difficult to determine where the enterprise is principally doing business.

The USCIS Policy Manual offers some guidance here, stating that the EB-5 enterprise principally does business “where it regularly, systematically, and continuously provides goods or services that support job creation.” Adding to this, USCIS considers a number of factors when determining where the enterprise principally does business, including the following:

• The location of jobs created by the enterprise;
• The location where capital related to the creation of jobs is spent;
• The location where the enterprise’s day-to-day operations occur; and
• The location where enterprise’s assets used in the creation of jobs are located.

If the enterprise provides goods or services that support job creation in more than one location, or employs workers in more than one location (such as in the case of remote workers), USCIS will determine that the enterprise principally does business in the location that is most significantly related to the creation of jobs.

If remote workers are utilized in areas that are not TEAs, the risk increases that USCIS will determine that the EB-5 enterprise is not principally doing business in a TEA. For example, In Matter of Izzumi (22 I&N Dex. 169, 172-173 (AC 1998), link here), the government held that a petitioner with activities in multiple locations failed to prove that the enterprise principally did business in a targeted employment area where neither the enterprise’s transactions nor the locations of its headquarters were in a TEA.

When the EB-5 enterprise utilizes remote workers, there is some uncertainty as to whether USCIS will look to the location of the remote workers, the location of the enterprise’s headquarters, the location of the enterprise’s warehouse, or some other location associated with the enterprise in to determine where the EB-5 enterprise principally does business.

To be safe, for EB-5 projects located within a TEA, it is generally recommended that the jobs created by the EB-5 enterprise be located within the geographic region where the enterprise is located. This can reduce the chances that USCIS may determine that the EB-5 enterprise is ineligible as a TEA project, and therefore ineligible for the lower investment amount.