Analysing the EB-5 Economist Report: assessing indirect jobs

The EB-5 Economist Report is an indispensable specialist document in the I-526E petitions of Regional Center projects. It is the scientific basis for proving the project will create enough indirect and induced jobs — the two types of jobs that make up most of the minimum 10 jobs each investor must meet.

Unlike the Business Plan, which sets out the business plan, the EB-5 Economist Report uses complex regional economic models to quantify the project’s spillover impact. A high-quality economic report reassures investors that the project has a solid methodological foundation; conversely, a weak report is a warning sign about the ability to meet the job requirement when filing theI-829 EB-5.

The role of the EB-5 economic report in the I-526E petition

The EB-5 economic report serves as the scientific document proving the project can create enough jobs as required by thevisa EB-5. For the EB-5 Regional Center model, it is one of the documents U.S. Citizenship and Immigration Services (USCIS) scrutinises most closely.

The specific roles of the economic report in an EB-5 petition:

• Calculating the indirect jobs created by the project’s spending in supply industries
• Calculating the induced jobs created by workers spending their income
• Providing the scientific basis for the job figures in the Business Plan
• Being a mandatory document in the Regional Center’s Form I-956F
• Helping investors prove they meet the job requirement when filing the I-829

Under the rules of theU.S. Citizenship and Immigration Services (USCIS), only Regional Center projects may count indirect and induced jobs. EB-5 Direct may only count direct jobs, so it does not need an economic report of this kind.

The structure of a standard EB-5 economic report

A standard EB-5 economic report is usually 30–80 pages long, organised in a logical and traceable structure. Every report must include the following core components.

Part 1: Project summary and investment structure

This part introduces the project and its financial structure, providing the basis for the economic analysis that follows. It covers:

• Project description (type, scale, location)
• Investment structure (target number of investors, total EB-5 capital, total project capital)
• The NCE-JCE model and its relationship with the Regional Center
• The phased project implementation timeline

Details of theEB-5 project structure with the NCE and JCEare analysed in a separate article.

Part 2: Methodology and model

This part sets out the methodology used to calculate indirect and induced jobs. It is the part that determines how credible the report is in USCIS’s eyes.

Core requirements for the methodology section:

• State clearly which input-output model is used (IMPLAN, RIMS II, REDYN)
• The model version and data year
• The geographic scope of the analysis (county, MSA or group of counties)
• Definitions of the types of jobs counted
• The multipliers applied to each economic sector

Part 3: Inputs Analysis

The inputs analysis sets out the input figures entered into the economic model. The accuracy and reasonableness of the inputs determine the accuracy of the outputs.

Typical inputs for an EB-5 real estate project:

• Total construction costs by NAICS code (hard costs)
• Soft costs such as design, architecture and engineering
• Land acquisition and infrastructure development costs
• Furniture, fixtures and equipment costs (FF&E)
• Marketing and sales costs
• Expected operating revenue (for the operations analysis)
• The projected number of direct employees

Each input must be supported by specific documents: construction contracts, design files, budget estimates, valuation reports. An economic report that cites inputs without supporting documents is a serious warning sign.

Part 4: Job calculations

This is the core of the report, setting out the job calculations by type.

A typical calculation structure:

• Direct jobs: calculated directly from the hiring plan (not through the model)
• Construction jobs: calculated from construction costs × the construction sector multiplier
• Operations jobs: calculated from operating revenue × the operating sector multiplier
• Indirect jobs: calculated automatically by the model based on the inputs and multipliers
• Induced jobs: calculated automatically by the model based on workers’ income

The total jobs are then compared with the requirement (number of investors × 10) to determine the buffer (the safety margin).

Part 5: Presenting the results and buffer

The final results section must be transparent about:

• The total number of jobs expected to be created
• The number of jobs per investor
• The buffer ratio (job creation cushion)
• A comparison with the EB-5 legal requirement

The ideal buffer is at least 1.2 — that is, 12 jobs per investor rather than just 10. A buffer below 1.1 is a significant risk, because the project need only fall 10% short of plan for investors to potentially miss the requirement.

The IMPLAN method in EB-5 economic reports

IMPLAN (Impact Analysis for Planning) is the input-output model most commonly used in EB-5 economic reports. Most reports in the EB-5 market today use IMPLAN as their main methodology.

Features of IMPLAN in the EB-5 context:

• Data updated annually for 546 detailed economic sectors by NAICS code
• Allows analysis at county or county-group level
• Calculates direct, indirect and induced multipliers at the same time
• Supports customised study areas (custom region)
• Allows analysis of one-time and recurring impacts

When reading an economic report that uses IMPLAN, investors should check:

• The IMPLAN version and data year (ideally the latest version)
• Whether the geographic area fits the project’s location
• Whether the multipliers cited are reasonable compared with industry benchmarks
• Whether any adjustments have been made for the project’s specific characteristics

The RIMS II method in EB-5 economic reports

RIMS II(Regional Input-Output Modeling System II) is a method developed and maintained by the Bureau of Economic Analysis (BEA) — an agency of the US Department of Commerce. USCIS places particular trust in this methodology because of its government origin.

Comparing RIMS II with IMPLAN:

Factor	IMPLAN	RIMS II
Source	Private company (IMPLAN Group)	Bureau of Economic Analysis (government)
Number of sectors	546	62
Geographic unit	County, custom region	MSA, state
Updates	Annually	Every few years
Flexibility	High	Lower
Data cost	Commercial	Free

RIMS II is less detailed than IMPLAN but has the advantage of credibility thanks to its government origin. Some EB-5 projects use RIMS II as their main method, sometimes combining both to increase reliability.

Criteria for assessing a quality EB-5 economic report

For Vietnamese investors, assessing the EB-5 economic report before committing capital is a step that is often skipped but offers strong protection. The assessment should be carried out with an immigration lawyer or an independent EB-5 specialist.

Criterion 1: A methodology accepted by USCIS

USCIS does not strictly require any particular methodology, but IMPLAN and RIMS II are the two models with a long history of wide acceptance. Reports using other methodologies (such as in-house or less common models) carry a higher risk of being questioned by USCIS.

Criterion 2: Reliable input data sources

The inputs to the economic model must come from official project documents, not self-estimated figures. The report must state the source of each input and attach supporting documents.

Signs of a report with weak data sources:

• Neat round-number inputs (50,000,000 USD, 100,000,000 USD) instead of detailed figures
• No source citations for the construction budget
• Operating revenue not supported by market research
• A number of direct employees that does not match the Business Plan

Criterion 3: Reasonable multipliers

The multipliers applied to each sector must be within a reasonable range compared with industry benchmarks. Excessively high multipliers are a sign the report has been “inflated” to produce phantom jobs.

Example benchmarks for the US construction sector:

• Total employment multiplier: usually 1.5–2.5 (depending on the region)
• Direct jobs multiplier (jobs per million USD): usually 8–15
• Indirect jobs multiplier: usually 5–10

Multipliers above these levels need a specific explanation in the report.

Criterion 4: A reasonable buffer

The buffer ratio (job creation cushion) is the final indicator of how safe the project is in terms of jobs. A good economic report should have a buffer of ≥1.2, ideally ≥1.3.

A low buffer may be due to:

• A small project that only just creates 10 jobs per investor
• A conservative methodology with low multipliers
• A project budget that only covers the minimum requirement

In all 3 cases, investors should be cautious because the risk of a job shortfall is high.

Criterion 5: The economist firm’s reputation

Although USCIS does not require the report to come from any particular economist firm, the reputation and track record of the author are important. Investors should ask for information on:

• How many years of experience they have preparing EB-5 economic reports
• The number of reports accepted by USCIS
• The rate of RFEs relating to the economic report section
• Whether they hold professional qualifications in regional economics

Updating the economic report during the 2-year conditional period

The initial economic report is filed with the I-526E to prove the project will create enough jobs. However, when filing theI-829after the 2-year conditional period, the investor needs an updated economic report proving the jobs have actually been created.

An Updated Economist Report usually includes:

• Data on actual costs spent (compared with the original projections)
• Actual operating revenue (compared with projections)
• The actual number of direct employees at the JCE
• A recalculation of indirect and induced jobs based on actual data
• A comparison of total actual jobs with the original commitment

In many cases, actual data can differ significantly from the original projections. The updated report must be transparent about any deviations and explain their causes (delays, changes in scope, market volatility).

Common risks in EB-5 economic reports

Although investors often see the economic report as a hard-to-follow technical document, some common risks can be spotted even by non-economists.

Warning signs in an economic report:

• Overly optimistic inputs: projected revenue far exceeding industry benchmarks without a clear reason
• Excessive multipliers: unusually high multipliers compared with the industry
• An overly broad geographic scope: the analysis covers a larger geographic area than the actual area of impact
• Double-counting jobs: the same job counted through several channels
• Ignoring leakage: not deducting spending that flows out of the study area
• A thin buffer: a safety margin below 1.1
• Inconsistently mixed methodologies: combining IMPLAN, RIMS II and other methods without explaining why
• Out-of-date data: using model data that is too old (more than 3 years)

The presence of 2 or more of these signs is grounds for asking the Regional Center serious questions or looking for another project.

Conclusion

The EB-5 economic report is an indispensable scientific document for Regional Center projects, serving to prove the ability to create indirect and induced jobs as the programme requires. A high-quality report using a methodology accepted by USCIS (IMPLAN or RIMS II), with reliable inputs and a reasonable buffer, is the foundation for a successful I-526E petition.

For Vietnamese investors, even without a deep understanding of complex economic models, knowing the core assessment criteria helps judge a project’s quality correctly before committing capital. The combination of a good economic report, aBusiness Plan EB-5of high quality and a fairLimited Partnership agreementare the three legal pillars of a successful EB-5 project on the way to a permanentUS permanent resident card.