EB-5 Immigrant Investors: “Tenant Occupancy” Real Estate Investors
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The tenant occupancy methodology is used for EB-5 immigrant investor visa cases that involve a capital investment in real estate property that is used to provide space for tenant employees, and those employees are considered to be jobs created by the investment. These cases are complicated and are treated differently. If you have questions about the EB-5 immigrant visa and would like to consult with an attorney, contact The Law Firm of Shihab & Associates. We have over 50 years of combined legal experience in a wide variety of complex and immigration law matters.
USCIS guidance on tenant occupancy cases has been less than clear and is contradictory in some areas. Therefore, careful analysis and understanding of previously released USCIS memoranda on the subject is imperative.
Establishing the Link Between the Capital Investment & the Jobs Created
There are two methods that allow tenant employees to be counted as newly created jobs by your capital investment in the real estate. These are (1) financial and (2) facilitation-based. Under the financial method, this link is easily established because your capital investment passes directly to the tenants, so not much needs to be said about this method. Under the facilitation-based method, the link is more difficult to establish because the new jobs would be created indirectly by your capital investment. Most of the confusion involves this method.
The Facilitation-Based Method
According to the USCIS guidance memo released December 20, 2012, jobs may be counted as generated by tenants when there is proof of a nexus between the investment and the tenant jobs. It must be established that the jobs are newly created, not merely jobs transferred from one location to another.
USCIS has said that when it decides whether there is sufficient evidence that an enterprise indirectly caused the creation of tenant jobs, his determination is made on a case-by-case basis and will generally require an evaluation of verifiable detail provided in the overall reasonableness of the methodology as presented. However, no guidance is given about how to provide “verifiable detail” about new jobs to be created by future tenants in a project that is still in the planning stages. USCIS guidance says that facilitation-based tenant job creation may be established by showing that a specific space project will remove a significant market-based constraint. No guidance was given as to exactly how this should be proven.
Unfortunately, since cases are to be determined on a case-by-case basis, investors cannot really rely on previously accepted business models in cases that were adjudicated favorably. This leaves a great deal of uncertainty. That being said, a knowledgeable and experienced attorney should be able to analyze the specific facts of a particular case and develop an appropriate strategy using available guidance.
If you would like further information about the EB-5 immigrant visa or any other immigration matter, please contact our immigration attorneys at The Law Firm of Shihab & Associates to schedule a consultation with an attorney at an office near you.
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