A JCE is a business entity that is responsible for creating and maintaining the required number of jobs (10) for EB-5 investors. The JCE is often referred to as 'The Project'.
The JCE can be any for-profit entity, such as a corporation, limited liability company, or partnership, conducting a lawful business activity that will create jobs in the United States.
Jobs must be created in order for the EB-5 investors to become eligible for permanent U.S. residency. This is often erroneously interpreted as two years. The actual duration of the jobs created is not defined in the regulations.
Allowable Uses of EB-5 capital
The funds must be used for the specific project outlined in the EB-5 offering documents. The JCE may use the EB-5 capital for a wide range of expenses related to the project, including construction costs, equipment purchase or leasing, and other costs related to the development and operation of the project.
The JCE must have a clear plan for the use of the funds, and must carefully track and document the expenditures to demonstrate compliance with the program's regulations.
The Full Amount of EB-5 Investment Capital Must Be Deployed into the JCE
This means that the JCE must receive the entire investment amount, and the NCE (New Commercial Enterprise) cannot retain any of the funds for its own use.
The requirement for full deployment of EB-5 investment capital is designed to ensure that the funds are actually used for the intended purpose of creating jobs and stimulating economic growth. It also helps to prevent fraud and misuse of investor funds.
The Investment Must Be Sustained 'At-Risk'
In EB-5, "at-risk" refers to the requirement that the investor's capital investment in the new commercial enterprise (NCE) must be placed at risk and committed to the project in order to be eligible for the EB-5 visa.
This means there can be no agreements in place that would guarantee the return of the investment, except in cases where the investor's petition is denied.
The capital investment must be actively used in the business and the investor must bear the risk of losing the investment in order to qualify for the EB-5 program.
This requirement is designed to ensure that the EB-5 program is used for job creation and economic development purposes, rather than as a guaranteed path to citizenship or as a form of passive investment.
Premature return of EB-5 capital
The premature return of EB-5 capital refers to the situation where an EB-5 investor receives the return of their investment capital before the end of the required 2-year at-risk period, or they risk losing their eligibility for permanent residency.
In order to remove conditions on their green card and obtain a permanent green card, the investor needs to provide evidence that they've appropriately sustained their investment and that the investment had created the required number of jobs.
JCE Must Comply with Reporting Requirements
The JCE must follow strict regulations and reporting requirements, including providing regular updates to EB-5 investors on the progress of the project and how their funds are being used.
Can the NCE and the JCE be the Same People?
The Regional Center Program does not prohibit common ownership of the NCE and the JCE. At times the principals of the NCE and the JCE are the same, and at others they are separate entities.