immigrant investor program news
April 13, 2011 Leave a comment
I keep reassuring people that the EB-5 Regional Center program will surely be renewed before 9/30/2012, that Congress couldn’t possibly delay and prevaricate and let a good jobs-creating economy-supporting program expire … or… wait…. If you are also reading the newspaper and getting nervous, IIUSA President K. David Andersson has some suggestions about how to be proactive about pressing our legislators to keep EB-5 on track.
April 6, 2011 3 Comments
Registration is now open for a series of EB-5 web seminars offering high-profile presenters and useful topics at a surprisingly reasonable cost.
U.S. Investment Visas and Green Cards for Foreign Nationals: A Three-Part Webinar Series
Presented by the Alliance of Business Immigration Lawyers and co-sponsored by Invest In the USA (IIUSA), the association of EB-5 Regional Centers.INTENDED AUDIENCE: Individual investors; potential and actual EB-5 regional centers; attorneys and advisors; real estate developers; companies seeking capital for development projects
SESSION 1: WEDNESDAY, APRIL 13 at 12:00 pm ET
Visa options for individual investors: E and L nonimmigrant visas; EB-5 green cards through direct investments or regional centers
Presenters: Bernard Wolfsdorf, Kehrela Hodkinson, Mark Ivener, Stephen Yale-LoehrSESSION 2: WEDNESDAY, JULY 6 at 3:00 pm ET
EB-5 regional center applications and project preapproval petition
Presenters: Laura Danielson, Bryan Funai, H. Ronald Klasko, Steve TrowSESSION 3: TUESDAY, AUGUST 16 at 3:00 pm ET
How to successfully navigate the back end of the EB-5 process for both individual investors and regional centers
Presenters: Steven Clark, H. Ronald Klasko, Robert Loughran, Stephen Yale-LoehrCOST AND REGISTRATION: $89 for an individual session, $249 for all three sessions. To register visit https://securec9.ezhostingserver.com/abil-com/abil_webinar_signup.cfm
Other upcoming events to keep in mind:
April 4, 2011 5 Comments
The USCIS website has posted several more 2010 Administrative Appeals Office decisions in the EB-5 category.
Feb182010_11B7203 to Feb182010_13B7203 and Feb182010_15B7203 are additional denials related to the Capital Area Regional Center Watergate Hotel project, which I described in an earlier blog post. These cases offer interesting insight into the official understanding of “material change,” TEA designation, acceptable investment terms for regional centers, and acceptable use of EB-5 capital.
Feb182010_14B7203 and Jul082010_01B7203 are new decisions on I-829 petitions for stand-alone EB-5 investments. The first case involves investment in an existing restaurant, and treats the issue of what constitutes a “new” commercial enterprise and the necessity of a wholly-owned subsidiary relationship between the “new commercial enterprise” and the “job-creating entity.” The July decision involves investment in an existing hotel, and discusses source of funds documentation required when the EB-5 funds come from a gift. Both decisions trace failure to demonstrate job creation to faults in the I-526 business plan — a good reminder to invest thought and experience in getting the business plan done well.
Don’t bother reading the following, which are mis-categorized or very brief: Mar292010_02D7101 (though this one is kind of entertaining: a petitioner explaining that he hasn’t met his Chinese finance due to his fear of high bridges and flying), Aug032010_01D7101 to Aug032010_03D7101, Mar082010_01B7203, May212010_01B7203 (cases withdrawn), Aug042010_01D7101, Aug052010_01D7101, Aug052010_02D7101 (misfiled L-1).
I have, by the way, compiled a log of EB-5-related AAO decisions from 2009 and 2010, tabulating the issues involved in each case. And if you’re very nice to me, I might share.
March 30, 2011 1 Comment
The EB-5 Regional Center program is currently only authorized through September 30, 2012, and Congress needs to renew it or there will be bad news for regional centers and for all investors whose petitions are still in the pipeline. With the economy as it is I can’t imagine Congress allowing a jobs program like this to expire, but still the last two renewals didn’t come until literally the last minute and caused a lot of needless stress to businesses and investors.
Fortunately IIUSA and others are pressing hard, not only for renewal well in advance of the sunset date but for the Regional Center program to be made permanent. As the IIUSA blog reported yesterday:
The Hon. Senator Patrick Leahy (D-VT), Chairman, Senate Judiciary Committee, introduced the Creating American Jobs with Foreign Capital Act (S. 642) – which would permanently authorize the EB-5 Regional Center Program – into the Congressional Record.
The bill’s proposal is commendably lean and to-the-point:
Section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (8 U.S.C. 1153 note) is amended–
(1) by striking “pilot” each place such term appears; and
(2) in subsection (b), by striking “until September 30, 2012”.
Note that as part of its advocacy efforts, IIUSA is hosting a day-long EB-5 Regional Center Conference in Washington DC on 5/10/2011. This conference will be a unique opportunity to network with the prominent movers in the EB-5 community and to advocate for the extension of the Regional Center program. Although I personally fear networking and lobbying, I’m considering attending the conference for two sessions planned on topics that are extremely hot for EB-5 at the moment: SEC-compliance and job creation methodologies. The excellent line-up of guest panelists includes:
March 18, 2011 Leave a comment
Here are interesting EB-5 statistics presented at the 3/17/2011 EB-5 Stakeholder’s Meeting at the USCIS California Service Center.
Current Regional Center Stats as of 3/17/2011
# of Active Regional Centers 125 # of Pending Initial RC Proposals 156 # of Pending RC Amendments 34 Stats on Initial Regional Center Proposal Filings
FY 2010
(Oct 2009 – Sept 2010)FY 2011 Q1
(Oct – Dec 2010)# of Initial RC Proposal Filings 110
116 # of Amended RC Proposal Filings 42 24 % of Initial RC Proposals Denied 45% 24% % of RC Amendments Denied 29% 22% Statistics I-526 and I-829 Petitions
(Recall that petitions are not necessarily adjudicated in the year in which they are received!)
# of I-526 Received # of I-526 Approvals % of I-526 Approved FY11 Q1 701 190 77% FY10 1955 1369 89% FY09 1028 1262 86% FY08 1257 640 84% FY07 776 473 76% FY06 486 336 73% FY05 332 179 53%
# of I-829 Received # of I-829 Approvals % of I-829 Approved FY11 Q1 531 39 75% FY10 768 274 83% FY09 437 347 86% FY08 390 159 70% FY07 194 111 69% FY06 89 106 64% FY05 37 184 62% USCIS noted that it is still working on a system to distinguish RC from stand-alone filings and that an estimated 90-95% of I-526 petitions are currently associated with Regional Centers.
EB-5 Visa Statistics
Total EB-5 Visas Issued FY11 Q1 1,421 FY10 1,885 FY09 4,218 FY08 1,360 FY07 806 FY06 744 The presentation notes: “USCIS interprets the set aside of visas to ensure that a minimum of 3,000 visas are available for regional center based applicants. We do not see the set aside as limiting the number of visas that can be granted to regional center based applicants, to the extent that such applicants can be allocated up to 10,000 visas, along with the non-regional center based applicants.”
March 17, 2011 Leave a comment
I just returned from “the ziggurat” in Laguna Nigel, where I attended the EB-5 stakeholders’ meeting at the USCIS California Service Center. It was a relatively subdued crowd this year — fewer attendees than last year and dampened by the struggle to hear through a faulty sound system. The information of consequence can be largely found in the 3/17 Meeting Powerpoint Presentation available at the USCIS website, and the panel answers to audience questions were entirely predictable. The few minor bombs will be retracted by the next meeting, I assume, so I’m not going to bother to report them. I may comment on a few points in subsequent posts, but here’s the simple bottom line: “follow instructions!” That’s all that USCIS can do; the agency isn’t Congress and can’t make policy but can only defer to instructions. And that’s what we have to do, in preparing petitions: just spread out the same set of instructions (the law, the precedent decisions, the forms, the memos) and follow them completely, elegantly, and with extreme explicitness.
Here are the topics covered in the PowerPoint Presentation:
Regional Center Statistics
- RC Proposal Filing Receipts for FY10 and FY11 Q1
- RC Final Case Actions FY10 and FY11 Q1
- EB-5 Individual Petition Filing Receipts FY05-FY10 & FY11 Q1
- Form I-526 Petition Final Actions and Final Action Percentages for FY05-FY10 & FY11 Q1
- Form I-829 Petition Final Actions and Final Action Percentages for FY05-FY10 & FY11 Q1
- EB-5 Case Processing Times
- EB-5 Visa Usage Stats
Revisions to USCIS.gov
Regional Center Economic Analysis
- Defining Direct Jobs
- Projected vs. Actual Jobs
- Using a State-wide Analysis
- Selecting/switching Impact Models
Targeted Employment Area (TEA) questions
[This section reminds us that (1) I-526, not I-924, is where TEA status needs to be demonstrated, and (2) the regulations don’t require state certification that a TEA is a TEA — alternatively the petitioner may independently pull and present stats demonstrating high unemployment .]Redemption Agreements
[Reminder to comply with Matter of Izumi.]Complex Capital Investment Vehicles
[Answer: A regional center may opt to structure EB-5 capital investment projects that involve multiple investment vehicles. However, USCIS has consistently maintained that a regional center must transparently show at the Form I-526 stage the specific job creating entities/projects in which the investor’s capital will be invested, supported by comprehensive business plans and an economic analysis that provides a reasonable methodology for estimating the job creation that will occur as a result of these complex investments. Some recently-reviewed RC applications have put forth capital investment structures that seem to presume that the EB-5 immigration process allows for a Regional Center to recruit EB-5 investors, who then file Form I-526 petitions in order to invest in an enterprise without identifying the specific capital investment projects that will receive the immigrant investor’s capital.]
March 15, 2011 3 Comments
USCIS has posted CSC processing times as of 3/14. According to this report, the California Service Center is currently processing 1-526 petitions filed 8/31/2010 and I-485 petitions filed 7/16/2010. The I-829 petition still has an estimated processing time of six months.
I recently spoke with two RC applicants who heard back from USCIS in February. One got approval for a new RC proposal filed in October 2010; another got an RFE on a proposal filed in July 2010. USCIS says that it processes petitions in the order they are received, but apparently the length of the processing time can vary widely. Another reason to make your proposal just as clear and tight as possible so that it’s easy for USCIS to review.
March 14, 2011 Leave a comment
Just in time for this week’s quarterly EB-5 stakeholders meeting, USCIS has posted an Executive Summary for the 12/16/2010 meeting. In addition to summarizing the content of the Meeting Presentation, this summary provides information from the Q&A session. A few highlights:
On the volume of Regional Center proposal filings, and high percentage of denials:
USCIS shared regional center filing receipts and final case actions in fiscal year 2010 highlighting that that 110 initial regional center proposals were received, 36 regional center proposals were approved while 30 were denied. Also received in fiscal year 2010 were 42 amended regional center proposal filings, typically to modify the scope or activity to be conducted in a previously approved regional center. In the week prior to the implementation of the new forms, USCIS received 100 regional center initial and amended proposals, which equates to 65% of all regional center filings in FY 2010. USCIS advised participants that the adjudication of this high volume of case filings will have an impact on processing times for Form I-924, Application for Regional Center under the Immigrant Investor Pilot Program.
Emphasizing the importance of the I-526 business plan:
At the I-526 stage, the agency is focused on analyzing whether the investment will create the required jobs within the conditional permanent residence period and in some limited instances within a reasonable time thereafter. What is most compelling at the I-526 stage is to have a solid business plan that transparently describes how the requisite jobs are going to be created within that timeframe.
On the question of whether it’s permissible to use EB-5 funds to pay off a loan:
If the project has essentially concluded and EB-5 capital is simply going to replace debt in which the jobs are already created through non EB-5 capital, this does not make a compelling argument that jobs were created as a result of the investment.
February 24, 2011 2 Comments
The good news: the EB-5 community is on a roll. I spent the weekend in Las Vegas taking part in two excellent EB-5 seminars (one organized by Wright Johnson and McAdam & McCarthy, the other by Brian Su of Artisan Business Group). Listening to the presentations by legal, financial, economic, and marketing professionals, I was impressed by how far we’ve come over the past couple years in getting this complicated EB-5 process figured out. The packed-out audiences testified to how excited businesses still are about the EB-5 opportunity.
The bad news: NOTHING IS HAPPENING OVER AT USCIS! Only two regional centers approved so far this year! Come on California Service Center! It’s almost March! We know you have over 100 applications waiting on your desks! What happened to all those new adjudicators you hired last year? They’re not hustling with I-526 petitions for investors either. The latest CSC processing time report (as of 2/14) has given up claiming a five month processing for the I-526 and admits that last week they were starting to process petitions filed on 7/13/2010. I understand that last year was challenging, with the new filing fees bringing a flood of RC applications, and a flock of new Regional Centers bringing in a larger volume of investor petitions. But the immigration service is going to have to step up its game a little if this program is going to survive. Job growth is waiting!
By the way, the talk on EB-5 business plans that I presented in Las Vegas is available to anyone interested in current strategies for presenting your business in the context of Regional Center applications and investor petitions. Please email me if you’d like a copy.
February 24, 2011 Leave a comment
IIUSA, the trade association for EB-5, hosts a regular conference call for members, and I was particularly impressed by this month’s guest caller from the CIS Ombudsman Office. Fred Troncone is a senior advisor at the office dealing specially with business matters, and he appeared well informed about the EB-5 program, energetic and proactive, and ready and willing to work closely with both stakeholders and USCIS to consider recommendations for improvement and address case-specific problems. Comments and complaints can be submitted directly to USCIS through the EB-5 inquiry page, but keep the CIS Ombudsman in mind as well. As an independent office within the Department of Homeland Security, the CIS Ombudsman exists (at least so long as it can keep funding) to help improve the immigration service. To quote from its website:
The Ombudsman is dedicated to identifying systemic problems in the immigration benefits process and preparing recommendations for submission to U.S. Citizenship and Immigration Services (USCIS) for process changes. The Ombudsman believes that process change recommendations from individuals like you represent one of the best sources for identifying systemic problems in the immigration benefits process.
The Ombudsman also offers an option to those at their wits end in dealing with case-specific issues. To quote:
You should contact the CIS Ombudsman if you have an ongoing or immediate issue with USCIS, such as:
- You are facing, or are about to face, an immediate adverse action or impact, an emergency or any other type of significant hardship caused by an action/inaction/delay in processing by USCIS, or a problem, which could not be resolved through the normal processes provided for by USCIS;
- Your case experienced processing delays beyond anticipated processing times;
- You will incur, or are about to incur, significant and unusual costs (including fees for professional representation that are not normally incurred);
- Have not received a response or resolution within the anticipated time frames as published by USCIS.
February 10, 2011 Leave a comment
The U.S. Department of State has published their final visa usage statistics for FY2010. A total of 1,885 EB-5 visas were issued, with the following countries making up the Top 10:
Thanks to Peter Joseph at the IIUSA blog for tabulating these stats from the State Department’s master list. Several points of comparison with visa usage statistics from FY2009:
January 7, 2011 2 Comments
Mark your calendars for these upcoming opportunities to network and gather resources in the EB-5 field.
February 19, 2011, Las Vegas, NV
EB-5 One-Day Seminar: Regional Center Development, Management and Project Creation
Hosted by McAdam & McCarthy Attorneys at Law
Registration Deadline for Early Bird Discount: Jan. 26, 2011
Back by popular demand after a successful run in Chicago last year, this seminar focuses on practical content for for EB-5 practitioners. Speakers include immigration, corporate, and securities lawyers, an economist, an escrow agent, and yours truly. Topics covered include:
- What is the EB-5 Program?
- What are the benefits and importance of an EB-5 Regional Center Designation?
- Preparing your Regional Center Application
- Preparing your business for EB-5 investment
- The role of economic analyses in EB-5
- What is a “Target Employment Area” and how does it affect EB-5?
- Developing an EB-5 business plan
- What the individual investor must submit in order to invest in your business (the I-526 Visa Petition)
- Properly setting up capital transfer mechanisms, such escrow accounts.
Especially if you are considering or in the process of setting up a Regional Center, I would highly recommend this event as a source of valuable practical guidance and connections.
Feb. 20, 2011 Las Vegas, NV
EB-5 RC Promotion and Investors Procurement Seminar
Host: Brian Su, Artisan Business Group
Those attending the RC development and management seminar on the 19th may want to consider this seminar hosted in Las Vegas the following day, and focusing on EB-5 marketing in China. I unfortunately had to miss Brian Su’s previous seminar in Chicago but was able to take advantage of the written materials he provided, which proved quite useful. If you want practical guidance for navigating the market for Chinese investors, this is a good opportunity for you.
March 17, 2011, Laguna Nigel, CA
EB-5 Stakeholder Meeting at the California Service Center
The quarterly meetings hosted by USCIS for EB-5 stakeholders are always very informative, and this one has the added attraction of location at the California Service Center, bringing you face-to-face with the very people who adjudicate your petitions and the very Cold War bunker where your EB-5 fate is decided. Most key players in the EB-5 field will be present in the audience, and IIUSA will be hosting networking events around the meeting.
These are EB-5 events that I plan to attend; for other opportunities consult http://eb5info.com/eb5-events
If you are an immigration attorney, you may want to consider attending the 2011 AILA EB-5 CLE Conference, to be held, surprise surprise, in Las Vegas, on March 14. The presentation titles are identical to those for the AILA EB-5 CLE in Boston last year, but with the changing field some new info may be offered.
December 22, 2010 Leave a comment
Reuters published today a lengthy and well-researched article on the EB-5 program titled Special report: Overselling the American dream overseas. As its title suggests, the report presents a largely negative view of the program.
Over two months this fall, Reuters reporters in the United States, China and Korea attended EB-5 sales presentations and interviewed dozens of people associated with the program — from officials at the U.S. agencies that monitor it to the immigrants who have used it, from the attorneys that steer immigrants into specific investments to the U.S. businesses that pay them to do so. The picture that emerged was troubling…
Criticisms largely focus on misrepresentations in overseas marketing and the rocky history of EB-5. The information will not be new to those in the EB-5 field, but may influence public opinion. The yahoo home page has already picked up the story.
December 16, 2010 Leave a comment
USCIS has posted a very informative PowerPoint Presentation for the 12/16 EB-5 Teleconference. Here is an outline of the topics covered.
- Regional Center Statistics
- Regional Center Filing Receipts and Final Case Actions FY10
- EB-5 Individual Petition Filing Receipts for FY05-FY10
- Form I-526 Petition and Final Actions for FY05-FY10
- Form I-829 Petition and Final Actions for FY05-FY10
- EB-5 Visa Usage
- FY10 EB-5 Visa Usage by Country
- EB-5 Case Processing
- EB-5 Data Reporting
- Up-coming revisions to Form I-526 and I-829
- EB-5 Staffing Increase at the CSC
- Future Posting of 2010 EB-5 Training Materials and EB-5 FAQ
- About Maintaining Jobs in a Troubled Business
- Issues with Office of Foreign Assets Control and investors from Iran
- Issue of Sustaining the Capital Investment (new guidance here!)
- EB-5 Status Issues
- TEA Issues
December 16, 2010 Leave a comment
The USCIS list of approved regional centers has been updated as of today 12/16 with one new center, the first for the State of Maryland. This brings the grand total of RCs approved in November and December to three, with well over a hundred new proposals pending.
Maryland Center for Foreign Investment, LLC
Geographic Scope: Counties of Baltimore City, Baltimore, Carroll, Hartford, Anne Arundel, Prince George’s and Howard in the State of Maryland
Industries: Commercial Real Estate Development; Arts, Entertainment and Recreation
December 15, 2010 Leave a comment
The USCIS Office of Public Engagement has posted an agenda for tomorrow’s teleconference as well as (finally) the executive summary of the October 14, 2010 meeting.
December 9, 2010 Leave a comment
I just received this sobering update through IIUSA, an EB-5 trade organization:
A CSC Case Officer has reported, via response to the EB-5 Program e-mailbox, that over 100 Regional Center applications/amendments were received by the CSC prior to the 11/23/10 deadline to avoid the new filing fee.
At the 10/14 EB-5 stakeholder’s meeting, USCIS reported 83 RC proposals and 11 amendment requests pending. If these “over 100” applications received by 11/23 are in addition to those 94 pending, that’s a lot of applications! What is this going to do to processing times? What will happen to the market? We already have over 100 approved regional centers. How many more offerings can the market take? Are there enough wealthy risk-tolerant potential immigrants to go around? I also wonder about the quality of all those proposals rushed in under the deadline. Can I look forward to doing a brisk business in helping people respond to RFEs, or should I retreat to grant-writing assuming an EB-5 bust on the horizon? California Service Center, how would you like to hire an EB-5 business plan expert as an adjudicator? Make me an offer!
December 1, 2010 2 Comments
The official USCIS blog has posted an introduction of the EB-5 program. The most interesting aspect of this post is that it originated in an article in Chinese published as part of a “You Ask: USCIS Answers” series in The Epoch Times. I wonder if the translation choices in this article should be taken as standard (ie 区域中心 not 经济特区 for “regional center”). Regional Center promoters should find the article very useful as an official Chinese-language introduction to the EB-5 program.
In other news, USCIS updated its list of approved regional centers as of 12/01 and 12/08, but not with any new centers.
November 30, 2010 Leave a comment
People thinking about applying for regional center designation often ask me whether there’s any publically-available info about previously-filed applications. The answer is no, you can’t see someone else’s successful application. But you can learn something from failures. The USCIS website has a category of Administrative Appeals Office decisions for cases involving “Request for Participation as a Regional Center.” So far two cases have been posted, one from 2008 and one from 2009. I’ve summarized the key issues below.
12/22/2009 AAO decision: Regional Center Proposal Denial
The case dealt with a proposed regional center to cover fourteen counties in Maryland and invest in eleven types of projects: office buildings, lab sciences research space, biotechnology manufacturing, retail stores, restaurants, owner occupied and rental residences, hotels and short-term condominium rentals, recreational and sports activities, sports complexes, a bus station and parking garages. The proposal was denied by USCIS on 7/28/2009, and the AAO confirmed this denial on appeal on 12/22/2009. I take three key lessons from this case:
- Project detail is important. The regional center applicant chose not to comply with USCIS’s request, in a Request for Evidence, for a detailed business plan and more focused economic analysis for the sample projects. The applicant argued that such a level of detail isn’t required by the regulations, which only call for a “general prediction” of the projects in which it will invest. However the AAO judged that the regulations require the applicant 1) to provide whatever additional evidence the agency, in its discretion, might deem necessary, and 2) to provide “verifiable” detail as to how the jobs will be created, which could reasonably include focused economic analysis based on a detailed business plan.
- Details will be checked. This decision shows that the adjudicator and/or the AAO googled the proposed sample projects and found discrepancies with info provided in the application, judged the plausibility of economic predictions against publically available demographic statistics, and checked the economist’s math.
- Documentation is important. USCIS complained that the application didn’t include letters from developers of the proposed projects confirming that they’d work with the regional center, didn’t provide copies of industry reports cited in the economic analysis, and didn’t document the funds committed to regional center operations. The decision repeatedly states that “unsupported assertions of counsel do not constitute evidence.”
11/18/2008 AAO decision: Regional Center Proposal Denial
The case dealt with a proposal filed in 2006 and denied by USCIS out of hand, without issuing a Request for Evidence. The center proposed to cover several counties in Washington State and invest in activities that would “range from commercial real estate development to infrastructure/development financing for local utilities . . . from regional transportation to retail shops.” Some morals of this case:
- Don’t file prematurely. Before filing a proposal, the applicant must already exist as an entity and be able to prove it (ie by Articles of Incorporation). The applicant must already have specific potential investment projects to propose, or be able to demonstrate that it has already entered negotiations with entities interested in receiving loans. And USCIS won’t necessarily issue a Request for Evidence that allows making up deficiencies in the original proposal.
- Specific projects are important. It’s not enough to propose “broad investment types.” The service wants to see specific projects identified.
November 22, 2010 4 Comments
Beginning 11/23/2010, all regional center proposals need to be filed with a Form I-924 “Application for Regional Center” and a $6,230 filing fee. The final versions of the I-924 forms are not yet linked from the EB-5 program page, but I shall guide you to them:
I-924, Application For Regional Center Under the Immigrant Investor Pilot Program
I regret to say that these forms include not one significant change from the 08/04/01 versions. A few minor words changed here and there (ie “Applicant’s Signature” revised to “Signature of Applicant”), but that’s all.
Note that a Fact Sheet and Q&A on the Final Fee Rule have been published by USCIS.
