EB-5 Q&A with USCIS

USCIS has posted Q&A from the December 14, 2009 EB-5 conference call on their website. The questions (posed by the AILA EB-5 committee and Invest in the USA) were excellent and the USCIS answers mostly predictable (we can’t answer that question so we’ll answer a different one; we’re not going to tell you because there’s a memo on that subject forthcoming at an unknown date; we have an inapplicable precedent to refer you to; we have no general guidelines only case by case reactions). At least USCIS had prepared answers this time and some valuable information was shared.  Of particular interest to me:

• There were “less than 50″ regional center applications pending at USCIS as of 12/14/09.
• USCIS highlighted the importance of business plans. The movement of funds from one job-creating business to another is acceptable in principle with no need to amend the I-526 petition provided that the approved I-526 business plan allows for such movement. Job creation based on capital infusion can be demonstrated at the I-829 stage simply by referring to economic data in support of the I-526 petition provided that “the infusion of capital occurs according to the approved business plan and economic analysis, and the capital investment scheme comes to fruition in the manner outlined in the business plan.”
• USCIS made a strong statement about TEA designation, saying that they consider unacceptable “state-sanctioned attempts to ‘gerrymander’ a finding of high unemployment that is not in accordance with the statutory requirement, through the cobbling together of various portions of political subdivisions so that an investment in a commercial enterprise in a location that is not a high unemployment area would ultimately qualify as one.” While recognizing that states have the authority to designate TEA, USCIS emphasized that this designation must be in accordance with the statutory requirements for TEA: that the area is rural or has an unemployment rate 150% of the national average. Historically USCIS has accepted some creative TEA designations by states, but it seems that this will no longer be the case.
• USCIS emphasized that Regional Centers can only get credit for indirect jobs/impacts created within the geographic boundaries of the Regional Center.
• A project that has received traditional EB-5 investment may apply for designation as a regional center, so long as the economic analysis doesn’t “double-count” the jobs already allocated to the traditional EB-5 investors.
• USCIS confirmed that an investor can be counted as investing in a “new” commercial enterprise so long as that enterprise was established after 11/29/1990, and that such an investment will qualify without the need to show that the investor was involved in establishing, expanding, or reorganizing the business.
• The Q&A repeatedly cites this newly released document: Adjudication Field Manual Update AD09-38. Click here for the full text Adjudicator’s Field Manual.