I-956F EB-5 Business Plan Objectives and Best Practices

Every year since 2016, industry colleagues have honored me with their vote as one of the Top 5 Business Plan writers in the EB5 Investors Magazine poll. I appreciate the votes of confidence through the years and especially now, as the work of a business plan writer feels particularly challenging.

I spoke recently with an entrepreneur who is a business planning veteran in his own right, with decades of experience as a founder and executive. He already has a beautiful pitch deck for venture capital investment, and asked “what more do I need for EB-5?” and “where can I go to read about the requirements and what works for a business plan in the EB-5 space?” We had a long conversation, because much of what an entrepreneur practically needs to know about EB-5 isn’t written down anywhere. I usually blog about industry developments rather than my day job, but conversations like this remind me of the need to also write about business plans.

The major context for an EB-5 business plan today is the Form I-956F Application for Approval of Investment in a Commercial Enterprise, which requires “a comprehensive business plan for a specific capital investment project.” The USCIS Policy Manual Chapter 5(B) specifies that “A project application must include a credible and comprehensive business plan that contains, at a minimum, a description of the business, its products or services (or both), and its objectives.” Policy Manual Chapter 2(B) further defines a comprehensive business plan based on the precedent decision Matter of Ho.

The official USCIS guidance provides, at least, a partial content checklist for an EB-5 business plan. But a good EB-5 plan needs more than an appropriate table of contents. Strategy requires thinking about what the document needs to accomplish, and organizing content and presentation around those objectives.

I-956F EB-5 Business Plan Objectives and Best Practices

Objective 1: To describe a business proposal that works for EB-5.

Business plan best practice: Before putting pen to paper, discuss the business proposal with respect to the key EB-5 requirements for investment of capital, new commercial enterprise, job creation, targeted employment areas, and regional center sponsorship. The most beautiful presentation cannot salvage a plan to do something that EB-5 can’t do. The AAO record of EB-5 denials is littered with plans describing a debt arrangement with the NCE, direct job creation by an affiliate or third-party management company, and job creation by acquisition, for example – all valid plans from a business perspective but not a fit with technical EB-5 requirements. An informed and honest business plan writer knows the EB-5 requirements and their practical application, can identify potential challenges and dealbreaker issues upfront for a specific proposal, and will not write up a plan with no chance of EB-5 success.

Objective 2: To provide a document that is appropriate for filing with the Form I-956F, to support project approval by USCIS.

Business plan best practices: Know the USCIS I-956F adjudication checklist, and organize the EB-5 plan document with summaries and content headings to flag content responsive to that checklist. (The checklist is partially based on Matter of Ho, as expanded with items disclosed in Requests for Evidence.) Know the evidence expectations baked into the Matter of Ho standard, and help to organize third-party evidence in support of the business plan. Write and format the business plan for how it will be read: printed out on letter-size paper in the hands of a civil servant who is pressed for time and easily confused, not required to have any business or financial background, not able to easily request clarification, and predisposed to disbelieve the plan except as validated by independent evidence that he can verify in exhibits and on the Internet. And consider the timing context. I used to write I-526 plans with an eye on the likelihood that they would be read by USCIS at least two years in the future. Today, I write I-956F plans with an eye on the probability of review within a year.

Objective 3: To avoid content that could cause the I-956F project application to be denied by USCIS.

Business plan best practice: Work carefully to avoid discrepancies, the most common document problem behind EB-5 denials.  The EB-5 plan should ideally avoid internal discrepancies, discrepancies with other parts of the application including economic impact report and offering documents, mismatch with EB-5 requirements, and mismatch with how things will eventually turn out.  Business plans in the wild are dynamic, and it takes care and discipline to freeze a moment-in-time picture that’s consistent throughout application documents. An important part of my process is to seek out apparent discrepancies and preemptively iron them out before USCIS has a chance to seize on them as faults casting doubt on the credibility of the entire package. This is also a reason for the “lucid” in Lucid Professional Writing, because one method for avoiding discrepancies is to minimize repetition.

Objective 4: To lay a roadmap that will be feasible to follow.

Business plan best practices: Present the most conservative feasible scenario when it comes to schedule, budget, and financial projections. Strategize about areas in which the business plan is most liable to change, and bake flexibility where possible into those aspects of the business plan presentation (avoiding unnecessary detail and mentioning caveats and alternatives). Think about the evidence that will need to be provided in support of projections, and shape the plan as needed to support the evidence that will be practically possible.  The EB-5 plan should ideally set the client up to over-deliver on promises, avoid the need to file expensive amendments, avoid fatal material change, and avoid impossible evidence requests.

Objective 5: To tell a coherent story that fits the EB-5 plot and will be compelling to EB-5 investors and USCIS.

Business plan best practices: Know the story that an EB-5 plan needs to tell – a story about EB-5 capital deployed to create jobs and support an immigration opportunity. Understanding the EB-5 plot, tell that story with bright lights around the answers that EB-5 investors and USCIS need to find about use of investment, basis of job creation, and how the proposal lines up with immigration considerations. EB-5 investors and USCIS adjudicators approach documents with very different questions than are in the mind of a venture capital investor or institutional lender. A good EB-5 plan differs from a pitch deck or SBA plan for the same proposal because it is responsive and relevant to EB-5-specific questions and considerations.

Are good EB-5 plans worth the effort and investment?

The EB-5 space is full of sloppy business plans – 80-page cut-and-paste collages of undigested content that don’t bother to tell a clear or relevant story, but still succeed when the reader just accepts the plan because that’s easier than reading it. The snow job strategy is particularly advisable for a proposal with questionable EB-5 fit, because it’s difficult to question a mountain of disorganized information. And an EB-5 plan can coast on a nice cover so long as investors aren’t necessarily given the chance and USCIS adjudicators don’t always take the time to open and read the plan. But I still believe in the value of a tight, well-drafted EB-5 plan. Good projects deserve professional documents – for the sake of first impressions on the front end and protection on the back end. No one wants to wait for a nasty RFE or litigation to find out that the business plan, now suddenly Exhibit A, is unintentionally full of sloppy errors, omissions, and misrepresentations. And attractive, relevant documents can play an important role in supporting investment decisions and immigration approvals.

Future articles will discuss the EB-5 business plan content section by section, and FAQ on what works from a practical business perspective. I should also replicate these articles for E-2 and L-1, visa categories with their own particular considerations for the business plan.