EB-5 project structure: the New Commercial Enterprise (NCE) and the Job Creating Entity (JCE)

EB-5 project structure is the legal framework defining the relationship between the investor, the business receiving the investment and the business creating the jobs. Every EB-5 project involves two central entities: the New Commercial Enterprise (NCE) — the new commercial enterprise that receives the investor’s capital — and the Job Creating Entity (JCE) — the business that carries out the project and creates the actual jobs.

For Vietnamese investors, a clear understanding of the NCE and JCE structure is a prerequisite for correctly assessing a project’s cash flows, legal rights and risks. This article analyses in detail the concepts and the relationship between these two entities in both the EB-5 Direct and Regional Center models, and clarifies the common structural models in use today.

New Commercial Enterprise (NCE) trong EB-5

The New Commercial Enterprise (NCE) is the commercial entity into which the investor directly invests capital to meet the requirements of thevisa EB-5. As defined by U.S. Citizenship and Immigration Services (USCIS), the NCE must be a commercial enterprise established after 29/11/1990, or an existing business that has been restructured or significantly expanded.

The NCE can take several legal forms in the United States:

• Limited Liability Company (LLC)
• Limited Partnership (LP)
• Corporation (C-Corp or S-Corp)
• General Partnership
• Sole Proprietorship (rare in EB-5)
• Joint Venture
• Business Trust

Of these, the Limited Partnership (LP) and the Limited Liability Company (LLC) are the two most common structures for an NCE through a Regional Center. Details of theEB-5 Limited Partnership agreementand investor rights are analysed in a separate article.

The role of the NCE in the EB-5 structure

The NCE serves as the point of receipt for capital from EB-5 investors and is the main entity thatU.S. Citizenship and Immigration Services (USCIS)reviews in the I-526E petition. Its specific roles include:

• Receiving the 800,000 USD or 1,050,000 USD investment from the investor
• Keeping the capital at risk throughout the 2-year conditional period
• Deploying the capital into business activities or lending it to the JCE
• Distributing returns to investors under the agreement
• Being the entity USCIS reviews in the I-526E and I-829

The NCE must carry on genuine business activity and not be an empty shell. This is an important requirement because the legitimacy of the investment depends on whether the NCE conducts real commercial activity.

Job Creating Entity (JCE) trong EB-5

The Job Creating Entity (JCE) is the entity that carries out the project and creates actual jobs for US workers. In many EB-5 structures, the JCE and NCE are two separate entities, with a clear division between the capital role and the project implementation role.

The JCE is usually an existing business of the developer or an entity set up specifically for the EB-5 project. The JCE is responsible for:

• Carrying out construction and operating the project
• Hiring and managing employees
• Managing business operations to generate revenue
• Repaying the loan from the NCE (under a loan model structure)
• Creating direct, indirect and induced jobs in line with the Business Plan

The relationship between the NCE and JCE

The relationship between the NCE and JCE varies with the project structure. In modern EB-5 projects, there are two main models: the loan model and the equity model.

Loan Model:

The NCE raises capital from investors and then lends it to the JCE under a loan agreement. The JCE uses the loan to carry out the project and repays principal + interest to the NCE on schedule. The NCE distributes the interest to investors.

Equity Model:

The NCE invests capital directly in the JCE and becomes a shareholder/member of the JCE. Profits from the project’s operations are distributed to the NCE according to its ownership share, and the NCE then distributes them to investors.

The Loan Model is more common in EB-5 Regional Center projects because of its transparent cash flows and the ability to secure the loan with project assets (collateral). The Equity Model is usually used for projects with higher risk but greater profit potential.

EB-5 Direct structure: NCE = JCE

In theEB-5 Directmodel, the NCE and JCE are usually the same entity. The investor directly sets up or invests in a business that runs its own operations and hires its own employees.

Features of the EB-5 Direct structure:

• NCE = JCE, which is both the entity receiving the capital and the one creating the jobs
• The investor usually takes an active management role
• Only direct jobs count — 10 full-time employees of the NCE
• A simple structure with few intermediaries
• The investor has a high degree of control but also bears higher operating risk

This model suits investors who plan to settle in and run a business in the United States themselves, for example restaurant owners, retail chains, professional services firms or mid-sized manufacturers.

However, EB-5 Direct puts heavy pressure on the investor’s operating capability. Hiring and keeping 10 full-time employees for 2 continuous years is no small challenge, especially for a start-up in the US market.

EB-5 Regional Center structure: NCE ≠ JCE

In the EB-5 model through aRegional Center, the NCE and JCE are two different entities. This structure is more complex but offers many advantages for passive investors.

A typical structure includes the following components:

• Regional Center: designated by USCIS, acting as the intermediary managing the project
• NCE: usually a Limited Partnership set up by the Regional Center specifically for the project
• General Partner (GP): the entity managing the NCE, usually a subsidiary of the Regional Center
• Limited Partners (LPs): EB-5 investors contributing capital to the NCE
• JCE: the project developer, the entity that carries out construction and operations

The flow of capital in a typical Loan Model structure:

1. The EB-5 investor transfers 800,000 USD (TEA) or 1,050,000 USD (outside a TEA) into the NCE
2. The NCE pools capital from many investors and lends it to the JCE
3. The JCE uses the loan to carry out the project (construction, operations)
4. The JCE hires employees and creates direct, indirect and induced jobs
5. The JCE repays principal + interest to the NCE under the loan agreement
6. The NCE distributes interest to investors through the Limited Partnership

Advantages of the NCE ≠ JCE structure

Separating the NCE and JCE brings many practical advantages:

• Broad job counting: investors can count direct, indirect and induced jobs created by the JCE, making the 10-job requirement easier to meet
• Legal protection: the investor is a Limited Partner of the NCE and is not directly liable for the JCE’s operating risks
• Access to large-scale projects: many investors can take part together in projects worth hundreds of millions of USD
• Specialisation: a professional developer runs the JCE instead of the investor having to manage it themselves
• Asset security: in the loan model, the loan is usually secured by project assets

Legal requirements for the NCE and JCE under the EB-5 RIA 2022

EB-5 Reform and Integrity Act 2022 (RIA)has added many new requirements on the transparency and accountability of the NCE and JCE.

The main post-RIA requirements include:

• Each Regional Center offering must be approved by USCIS through Form I-956F before investors can file the I-526E
• The NCE must keep independent accounting records, audited annually
• Periodic Form I-956G reports on the activities of the NCE and JCE
• A ban on undisclosed conflicts of interest between the NCE, JCE and Regional Center
• A liability insurance requirement for the General Partner
• A mandatory escrow account for refunds in certain cases

These requirements aim to protect investors against the risks of fraud and poor management. Before the RIA, some EB-5 projects ran into problems because of a lack of oversight of the NCE-JCE relationship.

Assessing an EB-5 project’s structure before investing

When considering joining an EB-5 project, investors need to assess the NCE and JCE structure carefully through some core questions.

Questions about the NCE

• What legal form the NCE takes (LP, LLC, Corporation)
• Who the General Partner/Manager of the NCE is
• The main terms of the Operating Agreement or Limited Partnership Agreement
• How profits and fees are distributed (waterfall structure)
• The exit mechanism and repayment of capital to investors
• The target total number of investors and each investor’s ownership share

Questions about the JCE

• Which entity the JCE is and what its operating history looks like
• The developer’s track record on similar projects
• The JCE’s financial position (debt, equity, cash flow)
• The project implementation timeline and job creation milestones
• How repayment obligations are secured (for the loan model)
• Insurance and risk guarantees

Questions about the NCE-JCE relationship

• Whether there are any conflicts of interest between the NCE, JCE and related parties
• Whether transactions between the NCE and JCE are on arm’s-length market terms
• How the NCE oversees the JCE
• The NCE’s right to intervene if the JCE breaches the agreement
• Rules on structural changes (material changes) during implementation

Comparing EB-5 project structure models

The table below summarises the differences between common EB-5 project structure models.

Factor	EB-5 Direct	Regional Center – Loan Model	Regional Center – Equity Model
NCE and JCE	The same entity	Two separate entities	Two separate entities
Capital relationship	Direct investment	NCE loan to JCE	The NCE invests equity in the JCE
Jobs counted	Direct only	Direct, Indirect, Induced	Direct, Indirect, Induced
Control	Cao (active)	Low (passive Limited Partner)	Low (passive Limited Partner)
Legal risk	High	Average	Higher than the loan model
Return potential	Depends on actual business performance	Fixed interest on the loan	Depends on project profits
Asset security	No standard mechanism	Usually (project assets)	Usually none
Project scale	Small – medium	Large (hundreds of millions of USD)	Large

Each model has its own pros and cons. The choice depends on each investor’s goals, experience and risk tolerance.

Conclusion

The EB-5 project structure of a New Commercial Enterprise (NCE) and Job Creating Entity (JCE) is the foundational legal framework that determines how investment capital flows, how jobs are created and how risk is allocated. For Vietnamese investors, understanding the role of these two entities and the relationship between them is essential for assessing an EB-5 project correctly.

The choice between EB-5 Direct (NCE = JCE) and a Regional Center (NCE ≠ JCE) should be based on actual operating capability, settlement goals and risk tolerance. Whichever model is chosen, a thorough assessment of the legal structure together with theBusiness Plan EB-5and the Economist Report is a step that must not be skipped before committing capital on the journey to aUS permanent resident card.

The NCE–JCE structure largely determines the level ofrisk of losing your capital and your green card in an EB-5 case, so these topics should be read together.