I-924 options: What are actual and hypothetical projects? What does exemplar mean?

This post doesn’t break any news, but replaces an outdated post from 2011 that I notice has been getting a lot of traffic. (Most recently updated January 2017 based on the 11/2016 EB-5 Policy Manual chapter.)

Regional Center application project types and actual, hypothetical, and Exemplar business plans

USCIS Policy Manual, 6 USCIS-PM G (November 30, 2016) Chapter 3 summarizes the requirements for an application for regional center designation,

A regional center seeking to participate in the Regional Center Program must submit a proposal using the Application For Regional Center Under the Immigrant Investor Program (Form I-924).

USCIS may designate a regional center based on a general proposal for the promotion of economic growth, including increased export sales, improved regional productivity, job creation, or increased domestic capital investment. The statute further provides that a regional center shall have jurisdiction over a limited geographic area, which shall be described in the proposal and consistent with the purpose of concentrating pooled investment in defined economic zones.

In addition, the establishment of a regional center may be based on general predictions, contained in the proposal, concerning the kinds of commercial enterprises that will receive capital from immigrant investors, the jobs that will be created directly or indirectly as a result of such capital investments, and the other positive economic effects such capital investments will have on the area.

The Policy Manual goes on to explain that “the level of verifiable detail required for a Form I-924 to be approved and provided deference may vary depending on the nature of the application filing,” and provides three options for type of application filing: hypothetical, actual, and exemplar. Table 1 summarizes each type as defined at 6 USCIS-PM G Chapter 3(B).

USCIS asks the applicant to label the project documents included in the I-924 application, identifying whether they are presented as hypothetical, actual, or examplar. One application may include a mix of project types, and USCIS may decide to re-classify and approve an “actual” project as “hypothetical” if it’s not sufficiently detailed.

The standard for actual/exemplar business plan content is clear and rigorous: the same “Matter-of-Ho-compliant” standard that applies to the I-526 business plan. The standard for hypothetical plans was not defined from 2013 to 2016, and appeared to be very low. The new Policy Manual introduced in November 2016, however, gives some positive guidance for hypothetical plan content.

General proposals and predictions may include a description of the project parameters, such as:

* Proposed project activities, industries, locations, and timelines;

* A general market analysis of the proposed job creating activities and explanation regarding how the proposed project activities are likely to promote economic growth and create jobs; and

* A description, along with supporting evidence, of the regional center principals’ relevant experience and expertise. (quoted from 6 USCIS-PM G Chapter 3(B))

A regional center applicant may classify its potential real project as “hypothetical” because it’s not sufficiently advanced for detailed description, or may submit business plans for projects that are purely hypothetical scenarios — just examples of the kind of thing the regional center might do. Hypothetical projects are relatively easy to write up, and applicants can apply for very expansive geographic areas by including many hypothetical projects in the application. My log of new regional center designations from 2013 to 2015 (based on RC designation letters) shows that about 85% of initial regional center designations have been based on hypothetical projects.  However, approval of “actual” or “exemplar” documents can be valuable, thanks to deference.  Once USCIS has granted an actual or exemplar approval in the I-924 context, it will not (generally) revisit those same documents when they appear in investor I-526 petitions. From 2013 to 2015, USCIS issued 122 letters formally approving actual projects that were filed with I-924 initial applications or amendment requests.

AAO decisions relating to 1-924 project issues

• JUN272013_01B7203, DEC302013_01B7203, and FEB102014_02B7203 are examples of AAO decisions that require USCIS to reconsider I-526 denials that neglected to fully address deference to I-924 approvals. These decisions indicate that AAO (if not always USCIS) take the deference policy seriously.
• A few AAO decisions indicate limits on what can be approved as a “hypothetical” plan.  FEB212014_01K1610 concludes that “While USCIS does not define the level of detail required for a general proposal, merely identifying the NAICS industry categories and the eventual input-output model without analyzing how the model would apply to a hypothetical project that falls under the industry categories is insufficient to meet the applicant’s burden within these proceedings.” In AUG222016_01K1610, AAO and USCIS refused to consider the actual, active project of another regional center, including the economic impact analysis, as the Applicant’s hypothetical project.
• In JUL192013_01K1610, AAO withdrew a denial, finding that USCIS should not have required a proposal based on hypothetical projects to provide detail such as letters of intent from lenders, commitments from prospective partners, and extensive cost and location detail.

Finally, recall that an I-924 application for initial designation must include a business plan for the Regional Center itself in addition to the kind of project proposals described in this post. See the I-924 Instructions item #4 and #6 for ideas about what to include in a regional center operational plan. The AAO decision JUL092015_01K1610 discusses an application that was denied in part for failing to submit a sufficient operational plan.