Direct EB-5 petitions fail on jobs more than on anything else. Ten full-time positions have to exist inside your own company, filled by qualifying employees on your payroll, and no economist can model them into being from money you spent. Weak source of funds documentation is the second common killer, and running out of cash before month twenty-four is the third. Almost everything else on this page flows from those.
Start with the form, because the wrong one signals inexperience immediately. Direct investors file Form I-526, Immigrant Petition by Standalone Investor. Form I-526E belongs to investors in a regional center offering, and an advisor who mixes up the two has just told you how much direct work they have done.
Ten jobs, counted the way the regulation counts them
The definitions in 8 CFR 204.6(e) decide most direct cases before anyone reads the business plan.
- Full-time means at least 35 hours a week for the qualifying employee.
- Combinations of part-time positions do not count, even where the total hours run well past 35. Two people at 20 hours each are two part-time jobs and zero qualifying jobs.
- A job-sharing arrangement does count. Two employees sharing one full-time position is a recognized exception, so the arrangement matters more than the arithmetic.
- Independent contractors are out. Issue a 1099 rather than a W-2 and USCIS will not credit the position.
- Neither you nor your immediate family may be counted, and neither may anyone working in nonimmigrant status.
Read those five points twice. Direct cases that collapse at I-829 usually collapsed on one of them two years earlier, in a hiring decision that felt commercially sensible at the time.
Payroll records are the case at I-829
Your Form I-829 is an evidence exercise before it is anything else. Quarterly state wage reports and federal Forms 941 do most of the work. Add W-2s plus a payroll register that reconciles cleanly to the operating account.
Headcount timing is where honest businesses get hurt. A restaurant that hired 12 people in month four, ran lean at seven through a slow winter, then rebuilt to 11 before filing has a real problem to explain with documents. Conditions come off as of the second anniversary of your admission as a conditional permanent resident, assuming approval, so build the hiring plan backward from that date rather than forward from opening day.
Undercapitalization, the quiet killer
The $800,000 is your qualifying investment, and in most direct deals it is also the entire budget. Inside a targeted employment area that sum has to open the business and carry payroll until ten employees are working. Outside a TEA the figure is $1,050,000, which sounds more comfortable until you notice that a location outside a TEA is expensive for exactly the reason it fails the TEA test.
Do the arithmetic before you fall in love with the concept. Ten employees at a modest $40,000 each is $400,000 a year in wages before payroll taxes. Half your capital, annually. If revenue has not arrived by month twelve, the numbers end the project well before USCIS does.
Professional costs sit on top of all of it. Immigration counsel and a business plan meeting the comprehensive standard set out in Matter of Ho cost real money, and none of that spending counts toward the qualifying capital.
Source of funds is where the file gets thick
USCIS wants a documented path from the origin of every dollar to the enterprise's bank account.
- Five years of tax returns, or a documented explanation of why they do not exist in your jurisdiction.
- Bank statements showing the money accumulating rather than simply appearing.
- Contracts and closing statements for any asset sold to raise the capital.
- For gifted funds, the donor's own source of funds documented to the same standard, plus evidence the gift carries no conditions.
- For borrowed funds, expect close scrutiny of the loan agreement together with whatever collateral stands behind it.
Every transfer needs a receipt at both ends. Money routed through a friend's account to work around a currency control is a common and expensive mistake, and it surfaces in the record as an unexplained deposit that nobody can source.
The management requirement is lighter than most people fear
Direct EB-5 does not require you to work in the business full-time. The regulation asks that you engage through day to day managerial control or through policy formulation, and holding a corporate officer role or serving as an LLC manager satisfies it. Guidance in the USCIS Policy Manual chapter on the EB-5 program sets out how officers read that standard.
What you cannot be is absent on paper. Sign the leases yourself. Appear in the minutes and on the operating agreement, because the file is the only version of your involvement an adjudicator will ever see, and the practical demands are covered in more depth in our page on how hands-on direct EB-5 really is.
Expansion cases and the 40 percent misunderstanding
Buying into a company that already exists creates a specific confusion. A business qualifies as a new commercial enterprise where the investment produces a 40 percent increase in net worth or in the number of employees, and investors routinely read that as a substitute for job creation. Expansion answers a different question. It qualifies the enterprise, while ten new full-time jobs are still required and still have to be attributable to your money.
The troubled business alternative is narrower than it looks. That company must have existed for at least two years and lost at least 20 percent of its net worth over the prior 12 or 24 month period, and in exchange you preserve ten existing jobs for two years instead of creating new ones. Our page on expanding an existing US business through EB-5 works through both routes.
Timing traps between filing and conditions coming off
Processing times move around, so check the USCIS processing times tool for the office handling Form I-526 before you lock in a hiring schedule. The gap between filing and conditional residence determines when your two year clock starts running.
Capital has to be at risk and sustained for at least two years from the date of investment. Cash parked in the company account and never deployed into operations invites a request for evidence, because idle money is hard to describe as at risk with a straight face.
One deadline is worth understanding correctly. Direct EB-5 has no sunset date at all. Regional center authorization runs through 30 September 2027, and the grandfathering rule at 8 U.S.C. 1153(b)(5)(S) protects petitions filed on or before 30 September 2026 against a future lapse, both of which are regional center concerns rather than yours. Your calendar risk is different: the $800,000 and $1,050,000 minimums face their first inflation adjustment on 1 January 2027.
When direct is the wrong shape for the deal
Some businesses cannot reach ten W-2 employees at any capital level. A software company with four engineers is one. A property purchase that throws off rent and no payroll is another, and any model leaning on contractors will fail the count regardless of how much revenue it produces.
Franchises solve part of the problem because the labor model is known before you sign, and our page on franchise businesses for direct EB-5 works through the job math. Where the numbers still refuse to work, the honest answer is that a regional center offering may suit the deal better, and the common reasons USCIS denies EB-5 petitions are worth reading before you commit either way.