For Economists

I am a business writer, not an economist, and I don’t prepare econometric studies for Regional Center applications. But I am concerned to support the quality of these studies because my business plans need to partner with the economic analysis to show how a project will satisfy the job creation requirements of EB-5. For economists who may be new to EB-5, here are guidelines and resources that I think will help you.

How to Prepare the EB-5 Economic Analysis for a Regional Center Proposal

Follow instructions, and follow them simply, directly, and very explicitly. First, note the required elements of a Regional Center proposal that are typically dealt with in the economic analysis:

Code of Federal Regulations § Sec. 204.6(m)(3)
(3) Requirements for regional centers. Each regional center wishing to participate in the Immigrant Investor Pilot Program shall submit a proposal to the Assistant Commissioner for Adjudications, which:
(i) Clearly describes how the regional center focuses on a geographical region of the United States, and how it will promote economic growth through increased export sales, improved regional productivity, job creation, and increased domestic capital investment;
(ii) Provides in verifiable detail how jobs will be created indirectly through increased exports;
(iv) Contains a detailed prediction regarding the manner in which the regional center will have a positive impact on the regional or national economy in general as reflected by such factors as increased household earnings, greater demand for business services, utilities, maintenance and repair, and construction both within and without the regional center; and
(v) Is supported by economically or statistically valid forecasting tools, including, but not limited to, feasibility studies, analyses of foreign and domestic markets for the goods or services to be exported, and/or multiplier tables.

Remember that your analysis will be read first by a USCIS adjudicator in Orange County who isn’t a professional economist and who is only trying to determine whether your report makes sense and satisfies requirements. Make life easy for this person. Write the report so that it obviously and explicitly provides each item requested. Echo the language of the regulations, and make use of summaries and headings. Ensure that the adjudicator doesn’t need to issue a Request For Evidence pointing out that the analysis is missing one of the required elements. (Most RFEs that I’ve seen didn’t question methodology but pointed out omissions: most commonly that the analysis did treat job creation but neglected to explicitly cover “household earnings, greater demand for business services, utilities, maintenance and repair, and construction both within and without the regional center” as required in the instructions copied above.) Also, avoid distracting the adjudicator with content that isn’t required — for example calculation of increased sales and property tax revenue for the city.

Keep the future in view. Down the road when EB-5 investors are ready to remove conditions and the Regional Center needs to prove job creation, your analysis (with my business plan) will provide the roadmap for how job creation is verified. Whatever your method, discuss it with the RC applicant to ensure that the assumptions can realistically be backed up when it comes time to prove that jobs were actually created.

I’ve collected a reading list of available official guidance for the economic analysis and job creation projections for EB-5 Regional Center proposals. The information can be confusing and contradictory, which means you get to charge a lot for your analyses once you’ve sorted it out. Note that in the regulations and the Neufeld Memo I’ve highlighted the passages that are significant for you.

• Pages on Economic Analysis from USCIS EB-5 Training Materials II
• 5/2/2011 AAO decision on a Regional Center application with faulty economic analysis
• Code of Federal Regulations 8 CFR § Sec. 204.6 Petitions for employment creation
• June 2009 Neufeld Memo on Job Creation and Full Time Positions
• December 2009 Neufeld Memo
• December 2010 Mayorkas Letter on indirect job creation
• January 2009 Letter to Senator Cornyn regarding construction jobs
• I-924 Form and I-924 Instructions
• Notes on economic analysis from the 2010-1014 EB-5 stakeholder meeting held by USCIS
• Notes on job creation in the USCIS Adjudicator’s Field Manual
• NAICS Industry Classifications
• Studies referenced by USCIS: Dr. Wayne Miller, Economic Multipliers: How Communities Can Use Them for Planning, Linda Levine, Job Loss and Infrastructure Job Creation Spending During the Recession
• About methodologies:  Introduction to RIMS II, RIMS II Handbook, IMPLAN resources, REDYN overview, REMI overview
• My posts related to economic impact report: Choosing NAICS Codes, What is a “direct” job?, EB-5 Construction Jobs? Economic analysis problem revealed!
• Comments on economic reports from USCIS Stakeholder meeting Q&A