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INVESTMENT > Job Creation

One of the most important advantages for immigrant investors applying for an EB5 investor visa through a regional center such as CanAm’s regional centers is that they may satisfy the Program’s job creation requirements by counting not only direct jobs created as a result of his or her investment, but also may count indirect jobs created in related industries as a result of the investment. Regional centers are able to calculate indirect job creation through the use of approved input-output employment modeling systems.

All of CanAm’s regional center’s approved job multiplier is the Regional Input-Output Modeling System (RIMS) II, which is developed and maintained by the U.S. Bureau of Economic Analysis (BEA), a division of the U.S. Department of Commerce. We use the multipliers to calculate the number of indirect jobs resulting from the creation of each new, direct job.

Our regional centers’ projects use both the direct-effect and final-demand employment multipliers, which are based on either direct job creation or spending. 

 

Direct-effect model

Each project is required to provide a detailed job creation forecast or budget based on a business plan specifying its employment needs, which are then carefully reviewed and evaluated by our partners prior to their recommendation of the project to one of our regional centers.

Each direct job must be new full-time salaried positions or full-time equivalent hourly-wage positions working a minimum of 35 hours per week. To determine the number of indirect jobs you take the direct hires and multiply against appropriate RIMS II multiplier for borrower’s industry to calculate; payroll and employment documentation such as I-9 forms are submitted to evidence hirings.

Throughout the life of the project, these direct jobs or expenses are closely monitored by our partners on a semi-annual basis, using our partner’s own job reporting forms, which are also used for federal, state and city supplemented by the project’s employment records. Indirect job creation is based on these new, direct jobs or based on the amount of money spent within a region in a particular industry.

Please see the example on the right using the RIMS II direct-effect employment multipliers to determine indirect job calculations based on direct job creation:

EXAMPLE:

  • PNBC is building a new cancer research and teaching hospital with 350-beds (RIMS II Reference 622000). The total project cost is $179.5 million, of which $50 million will be financed by a loan through the PIDC Philadelphia Regional Center.
  • The RIMS II job multiplier for the Hospital Industry in Philadelphia is 1.5753, which means that for every 1 direct job created within the hospital industry, .5753 indirect jobs are created in related industries.
  • A $50 million loan, requiring the creation of 1,000 total jobs, would only need to create 634 direct jobs, which would result in the creation of 366 indirect jobs, or a total of 1,000 direct and indirect jobs.
  • PNBC Hospital will submit employment reports, such as I-9 or payroll forms, to verify the number of new hires and hours worked by hourly-wage new hires.

Final Demand model:

Final-Demand Multipliers are used to measure the economic impact in a specific industry because of dollar value changes in final demand.  The three categories of final-demand multipliers are output, earning, and employment multipliers. Earnings Multipliers identify the demands placed on a particular region from the future growth of a business activity.  They measure the total impact on earnings (income).  Employment multipliers are used to calculate the total number of jobs created by changes in final demand.

The final-demand multiplier includes an output table that measures how dollar value changes in demand affect the final-demand output in specific industries.  The final-demand multiplier can be used if data about the final dollar value impact of a business activity is available.  

Please see the example on the right using the RIMS II multipliers to determine indirect job calculations based on final demand model:

EXAMPLE:

  • The NK Film Studio Project will make total expenditures of $38 million in the Motion picture and video industries (RIMS II reference 512100) in Los Angeles, California.
  • The project will be financed by a $20 million Los Angeles Film Regional Center investment loan and the studio’s own equity.
  • The total employment effect of the project is calculated by multiplying the initial change in spending of $38 million by the multiplier in Reference 512100 in the final-demand multiplier table, or 16.2555 indirect jobs for each $1 million spent: 16.2555 x $38 million = 617.709 or 617 jobs.  This is the total number of indirect jobs created in the economic area as a result of the expenditures by the NK Film Studio Project.
  • Allocation of these 617 jobs between the 40 investors comprising the $20 million Los Angeles Film Regional Center investment lean would be approximately 15-16 jobs per investor.
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