AAO Material Change Decision

October 15, 2010 Leave a comment

A new EB-5-related AAO decision has been published on the USCIS website (Sept 21, 2010). This is another in the series of decisions (mostly published on 2/18/2010) involving the Capital Area Regional Center and an investment in development of the former Watergate Hotel. You can read my summary of the cases, and USCIS’s reasons for denial, including discussion of the “material change” issue. The September case has the additional interest of involving an investor from Iran.

Filed under EB-5 Law & Policy

Quarterly Update from USCIS

October 14, 2010 Leave a comment

Today 10/14 the USCIS Office of Public Engagement hosted its quarterly EB-5 Immigrant Investor Program Stakeholder Meeting by teleconference. Please consult the meeting presentation prepared by USCIS for the event, which includes useful updates and information about the EB-5 program, including the following statistics:

Regional Center Statistics

  • There are currently 114 approved Regional Centers (RCs), operating in 34 states, inclusive of the District of Columbia and Guam.
  • There are approximately 83 initial designation RC Proposals and 11 RC Proposals that request amendments to previously approved designation proposals pending with USCIS.
  • The “target processing time” for RC designation proposals is four months while the current processing time is five months.  Considering the proposal backlog, “additional resources” including one additional EB-5 supervisor and a “substantial” number of new Immigration Services officers will be dedicated to the EB-5 team at the California Service Center. New staff are to begin training this fall.

Investor Petition and Visa Statistics

Approximately 90% of the individual Form I-526 petitions filed each year are filed by Alien Investors who are investing in RC affiliated commercial enterprises.

EB-5 Individual Petition Filing Receipts FY05-FY10*
Fiscal Year Form I-526 Petition Form I-829 Petition
FY 2010 (preliminary)* 1727 690
FY09 1028 437
FY08 1257 390
FY07 776 194
FY06 486 89
FY05 332 37

*The fiscal year runs from 10/1 to 9/30. FY2010 figures are for the full fiscal year, but not yet finalized by the relevant departments.

EB-5 Visa Usage
Fiscal Year Total EB-5 Visas Issued
FY10 (Preliminary) 1,886*
FY09 4,218
FY08 1,360
FY07 806
FY06 744

*The USCIS representatives on the call did not know why this number is so much lower than FY09, considering the steadily-growing number of petition approvals. On average, there are 2.5 visas approved per investor.

Filed under EB-5 Resources, EB-5 Statistics, Updates from USCIS

Form I-924 10/14 update

October 14, 2010 Leave a comment

Among the updates in today’s EB-5 Stakeholder teleconference with USCIS, the I-924 and I-924a forms have been finalized, though not yet published on the USCIS website. [Note: See my 11/22 Update for the final forms.] Drafts of the forms are available (well buried) at regulations.gov, and can be downloaded at the following link: http://www.regulations.gov/search/Regs/home.html#docketDetail?R=USCIS-2009-0033 This folder contains several versions of the forms; be sure to download the most current ones (posted on 9/27/10).  Comments on the form and USCIS’s response to the comments can be reviewed at: http://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201009-1615-021

Filed under EB-5 Resources, Updates from USCIS

Delay at the CSC?

September 28, 2010 2 Comments

Since August 16th, only one new Regional Center has appeared in the USCIS directory. In June USCIS reported 65 proposals pending, and only 12 approvals have appeared since then. Last I heard (June), USCIS was stating four months for Regional Center proposal processing, but I know of proposals submitted six months ago that are not yet through the pipeline. I wonder what’s going on at the California Service Center?

Filed under New RC

I-924 and Final Fee Rule

September 23, 2010 Leave a comment

The USCIS website posted today (9/23) “After Public Comment, U.S. Citizenship and Immigration Services Announces Final Rule Adjusting Fees for Immigration Benefits.” The announcement confirms that beginning November 23,2010, Regional Center applications will have a filing fee of $6,230.  (Fees for I-526 and I-829 petitions will also increase, to $1,500 and $3,750 respectively.)  The forms can be downloaded for review from www.regulations.gov.
[Note: See my 11/22 Update for the final forms.]  Fortunately for me, the Form I-924 still requires Regional Center applications to include business plans.

Filed under EB-5 Law & Policy, EB-5 Resources, Updates from USCIS

AILA EB-5 Presentation Notes

September 13, 2010 Leave a comment

PowerPoint presentation notes from six of the sessions at at the August 27 AILA EB-5 Investor CLE conference are available on the AILA website — and anyone can download them! AILA is usually more stingy with its non-members, so this is a happy surprise. I have also listened to recordings from the event, and especially recommend the “EB-5 Lore vs. EB-5 Law” and “Removal of Conditions” presentations.

Filed under EB-5 Events, EB-5 Law & Policy, EB-5 Resources

RC list update

September 13, 2010 Leave a comment

The USCIS list of approved Regional Centers shows an update as of today 9/13/2010. No new centers this time, but Arizona EB-5 Regional Center has changed its name to Green Card Fund.

Filed under New RC

Don’t forget Koreans

September 13, 2010 Leave a comment

I was just listening to the panel on “Country-Specific Issues” from the August 2010 AILA EB-5 Investor CLE conference, and reminded of the significance of Korea for EB-5. Most new Regional Centers are rushing to China for investors, but keep in mind that 2009 was only China’s first year at the top of the list of EB-5 investors by country, a position formerly held for years by Korea. Fiscal Year 2009 still saw 903 EB-5 visas issued to Koreans, a significant number. Compared to the other markets discussed by the AILA panel — China, Iran, and Russia — Korea appears attractively simple, with fewer funds transfer, funds documentation, and consular issues to worry about. Marketers may want to note the Korea International Emigration and Investment Fair coming up in Busan (Sept 30) and Seoul (Oct 2-3).

Filed under EB-5 Events, EB-5 Resources, EB-5 Statistics

USCIS publishes EB-5 Meeting Notes

September 9, 2010 Leave a comment

The USCIS Office of Public Engagement has now published notes from the last two national EB-5 stakeholder meetings.

June 16, 2010 EB-5 Stakeholder Meeting in Washington D.C.
Includes an executive summary and the useful EB-5 PowerPoint presentation prepared by USCIS.
December 14, 2009 EB-5 Teleconference
Includes questions prepared by AILA and IIUSA and answers provided during the conference.

Filed under EB-5 Events, EB-5 Resources, Updates from USCIS

AILA article on EB-5

September 7, 2010 2 Comments

The September 2010 issue of Voice, a publication of the American Immigration Lawyers Association, features an article introducing the EB-5 program. The author is Boyd Campbell, one of the principals of America’s Center for Foreign Investment, a regional center covering most of five states. The article doesn’t provide new information or insights, but does offer a useful overview of the program and practical considerations for immigration lawyers.

In other news, the USCIS list of approved Regional Centers was updated on 9/7 and 9/8, but not with any new centers.

Filed under EB-5 in the News

EB-5 Seminars Chicago

September 2, 2010 Leave a comment

I just returned from Chicago, having participated in what proved to be an excellent series of seminars for EB-5 practitioners hosted by Wright Johnson, LLC and Artisan Business Group. While most EB-5 events aim at lawyers, these seminars benefited from being more practical than theoretical, and clearly presented the nuts and bolts of each piece of the Regional Center puzzle, from program background to proposal filing to economic analysis to corporate law and securities considerations to escrow arrangements to business plans to marketing.

The following is a list of topics and presenters, and I recommend anyone planning to set up a Regional Center to save time and headaches by contacting these people and begging a bit of the useful information and advice shared at the conference.

  • Immigration Law and EB-5 Program Description
    Joseph C. McCarthy, MS JD of McAdam & McCarthy
  • Econometrics and Project Planning
    Kevin Wright of Wright Johnson
  • Business Plan Preparation
    Suzanne Lazicki of Lucid Professional Writing
  • Corporate Law
    Jor Law and Michael Homeier of Homeier & Law, P.C.
  • Escrow
    Brian Terwilliger of NES Financial
  • Regional Center Resources and Networking
    Michael Gibson of USAdvisors.org
    Peter Joseph of Association to Invest in USA
  • Regional Center Marketing
    Brian Su of Artisan Business Group

    • Filed under EB-5 Events, EB-5 Resources

    “Material Change” AAO Decisions Published

    August 26, 2010 Leave a comment

    The USCIS website has now published the famed “material change” decision involving the Philadelphia Industrial Development Corporation (PIDC), which is managed by CanAm Enterprises. The decision is a scary-must read for all those regional centers out there whose project plans or area demographics might change over time, or who thought they could use bridge loans. I previously posted a summary of the PIDC decision. An additional denial involving Capital Area Regional Center Job Fund has also been published. My summary of the CARc decisions, which also involve material change and acceptable use of funds, can be reviewed below.

    Filed under EB-5 Law & Policy

    EB-5 Stakeholder Meetings 2010-2011

    August 17, 2010 Leave a comment

    The USCIS Office of Public Engagement has issued an invitation to its EB-5 Stakeholder Events for Fiscal Year 2011:

    October 14, 2010: Teleconference only
    December 16, 2010: Teleconference only
    March 17, 2011: In person at the California Service Center and by teleconference
    June 16, 2011: Teleconference only
    September 15, 2011: In person in Washington DC and by teleconference

    Mark your calendars! These events offer important insight into the ever-developing USCIS understanding of the EB-5 program, and interesting practical questions are raised and sometimes answered. The invitation includes information on how to RSVP and submit agenda items.

    Filed under EB-5 Events, EB-5 Resources

    Lansing RC in The New Republic

    August 5, 2010 Leave a comment

    The New Republic (August 5, 2010) has a positive article on the potential of EB-5 investment (presented as synonymous with Chinese investment) to benefit the Lansing area economy, and particularly Michigan State University.

    Filed under EB-5 in the News

    Up-coming EB-5 Seminars

    August 1, 2010 Leave a comment

    AILA CLE Conference on EB-5 (Boston 8/27/2010)

    “Investing in America — Making EB-5 Work for Your Clients and Your Practice” is an AILA-hosted CLE conference devoted to EB-5, to be held in Boston on August 27, 2010. Track 1 sessions are designed for the new EB-5 practitioner, providing an overview of the law, recommended protocol for determining whether EB-5 is an appropriate client strategy, and information on preparing and filing an EB-5 case. Track 2 sessions for EB-5 veterans cover matters such as strategies for success in country-specific cases, matters related to source of funds, securities laws and compliance issues, and considerations relevant to the actions of promoter agents and finders fees. Early bird registration ends August 13.

    EB-5 Seminars (Chicago 8/30-31/2010)

    Regional Center Development (Monday, August 30, 2010) hosted by Wright Johnson, LLC. Topics include legal issues and application processing, econometrics and project planning, investor marketing, private placement memoranda, business plans, and escrow agreements.

    Regional Center Promotion (Tuesday, August 31, 2010) hosted by Artisan Business Group. The seminar will discuss in detail issues related to Regional Center promotion in the Chinese market and working with immigration agencies and brokers.

    Filed under EB-5 Events, EB-5 Resources

    AILA summary of new EB-5 developments

    July 28, 2010 Leave a comment

    The AILA yesterday published a useful document entitled “New Developments in EB-5s.” Prepared by Ron Klasko, Chair of AILA’s EB-5 Committee, the report presents developments/clarifications in EB-5 processing taken from EB-5 stakeholders meetings and memoranda from June 2009 through June 2010. Topics include condition removal, troubled businesses, job creation, TEA designation, Regional Center proposals and business plans, requirements for the manner and timing of EB-5 investment, new commercial enterprise issues, and the material change problem.

    Filed under EB-5 in the News, EB-5 Law & Policy, EB-5 Resources

    2010 AAO Decision (CanAm)

    July 26, 2010 1 Comment

    This fascinating AAO decision (April 23, 2010) was referenced by CSC Division III Supervisor Blake Gotto at the March 16, 2010 EB-5 Forum at the California Service Center as an example of USCIS thinking on the “material change” issue. Apparently a lot of people asked about it, and the decision was distributed by USCIS to participants in the June 16 EB-5 Stakeholder Meeting in Washington, DC, with the caveat that it is “not being used as a binding decision on the agency, but does reflect their perspective.” The decision includes a number of very interesting features.

    Reading between the black-outs, the case involves a Partnership under Philadelphia Industrial Development Corporation (PIDC), which is operated by CanAm Enterprises, a weighty and professional player in the EB-5 field. The petitioner in this case filed an I-526 in May 2005 and an I-829 in November 2008. The I-829 was denied for the following reasons:

    • Material change issue: “The petitioner’s failure to execute the plan presented in support of the form I-526 petition by not only switching to a project that USCIS had never reviewed but also by financing different expenses with the original project than those projected in the original business plan.” The project as presented at the I-526 stage involved acquisition and renovation of a warehouse to be used by a discount seller of home improvement materials; the EB-5 funds were in fact used to pay off interim financing and an existing mortgage for a restaurant. Citing Matter of Izumi, Chang vs. United States of America, and the 12/11/2009 Neufeld Memo, the AAO argued that the I-829 could not be decoupled from the I-526, or rely on approval of a Form I-526 for an investment project that USCIS did not review as part of that adjudication.
    • TEA designation issue: The petitioner demonstrated TEA-designation for an address other than the address where the project was in fact located.
    • Investment structure issue: A bridge loan does not allow the petitioner to be credited with the statutorily-required job creation.

    The website for Philadelphia Industrial Development Corporation states, presumably relevant to this case, that “Consistent with the offering [for EB-5 Immigrant Investment Project loan to 1801 Restaurant Partners], an attractive alternative investment was recommended by the general partner. All limited partners who elected not to make the alternative investment have received a full return of their $500,000 principle investment.”

    Filed under EB-5 in the News, EB-5 Law & Policy, EB-5 Resources

    2010 AAO Decisions (CARc)

    July 24, 2010 2 Comments

    USCIS has updated its website with EB-5-related decisions from the Administrative Appeals Office through February 18, 2010. The following is a summary of salient points from the newly-posted decisions:

    Nov 09, 2009_01: No content of note.

    Jan 06, 2010_01: This decision concerns a stand-alone EB-5 case involving an operational hotel purchased through investment by the petitioner in 2006. It was denied for the following reasons:

    • The petition did not establish creation of 10 new jobs (in addition to preserved jobs) and did not provide a satisfactory business plan.
    • The petition did not establish a personal investment of $1,000,000 (“an investment by a corporation cannot be considered a personal investment by its sole shareholder”). (This issue was introduced by the AAO, not a point in the original denial by the service center.)

    Feb 18, 2010_01 to _07: These decisions concern I-526 petitions filed in August 2008 for an investment within Capital Area Regional Center Job Fund (for renovation of the former Watergate Hotel). The decisions are similar, and include the following reasons for denial:

    • The petition was supported by agreements substantially amended from those filed with the original regional center proposal, and did not disclose that the agreements had been amended. The petitioner subsequently filed an amendment with USCIS, but this did not help matters since “amendments to agreements or business plans that postdate the filing of the petition will not be considered.” CARc’s informal and ex parte communications with a USCIS official concerning the acceptability of the amendments were also not admitted.
    • The Operating Agreement included disqualifying provisions relating to reserve accounts, interim investments, membership units in exchange for services and the waiver of expense fees from the aliens.
    • EB-5 Project Capital toward job creation and organizational fees were paid out of the same account, and it wasn’t demonstrated that the account included sufficient funds to pay organizational fees without the use of any of the $500,000 being invested by each alien.
    • Use of EB-5 investment to back a letter of credit to secure a construction loan does not sufficiently place the investors’ funds at risk for job creation.
    • The petitioner did not demonstrate that the location of the investment was considered a TEA at the time of filing or investment.
    • The business plan included “material changes” from the original business plan. (“While we recognize that business plans often require some flexibility to deal with unforeseen circumstances, the business plan and the terms of the commitment letter in this matter have been amended with nearly every filing. These amendments go far beyond mere clarifications.”) The petitioner failed to demonstrate that the original business plan and projections continued to be viable.

    I note that, as usual, all the decisions cite Matter of Ho on business plans.

    Filed under EB-5 in the News, EB-5 Law & Policy

    USCIS Presentation on EB-5

    June 18, 2010 Leave a comment

    USCIS prepared a useful PowerPoint presentation for the EB-5 Immigrant Investor Program Stakeholder meeting in Washington, DC on June 16. Topics of interest include:

    • A concise and helpful overview of the EB-5 program and its requirements
    • EB-5 visa, Regional Center, and case processing statistics
    • Introduction to the proposed Form I-924 and I-924A (for Regional Center application and yearly reporting)
    • Updates on EB-5 Premium Processing (not to be offered), EB-5 Inquiries (webpage and email address available), EB-5 Expedite Requests (conditions explained), and Public Law 106-273 (resolution still pending)
    • Advice for the Regional Center application economic analysis and business plans
    • Definitions of and distinctions between “commercial enterprises” and “capital investment projects.”
    • Questions related to Targeted Employment Area designation, material changes after I-526 approval, job creation, and troubled businesses.

    This presentation was distributed by email to meeting attendees, but has not yet been made available on the USCIS website.

    Filed under EB-5 Law & Policy, EB-5 Resources, Updates from USCIS

    Introducing Form I-924 and I-924A

    June 17, 2010 Leave a comment

    [Note: please check my “Recent Posts” for updates on the I-924 Form.]

    At the EB-5 Stakeholder Meeting on June 16, 2010, USCIS provided the following information on its proposed forms for Regional Center applications and reporting.

    Proposed Form I-924
    The Proposed Form I-924, Application for Regional Center under the Immigrant Investor Pilot Program, will be used for the filing of both initial RC applications and amended RC applications. The Form I-924, which will has a proposed filing fee of $6,230 will:

    • Clarify filing requirements for the RC designation;
    • Improve the quality of RC applications;
    • Better document eligibility for the Pilot Program;
    • Alleviate content inconsistencies among applicants’ submissions; and
    • Support a more efficient process for adjudication of the RC applications.

    The USCIS Services Fee Schedule “Fee Rule” was published for public comment in the Federal Register on June 11, 2010. [CIS No. 2490–09; DHS Docket No. USCIS–2009–0033] The Form I-924 and I-924 instructions are available for review at www.regulations.gov. This folder contains new and revised versions of the forms; be sure to download the most current ones (posted on 9/27/10). I have commented on the forms in a number of posts, including notes on the 9/27/10 revisions.

    Proposed Form I-924A
    The Form I-924A, Supplement to Form I-924, is the proposed vehicle for a yearly RC reporting requirement. Each approved RC will be required to file the I-924A to report RC-related activities for the preceding fiscal year within 90 days of the end of the fiscal year (on or before December 29th of the calendar year in which the fiscal year ended.) There is no proposed filing fee for the Form I-924A.

    USCIS plans to publish an aggregation of the data provided each year by all designated regional centers, to include attributes of the RC-affiliated capital investments, such as:
    1. the geographic areas and industry categories receiving investment capital;
    2. The volume of regional center affiliated capital invested, and;
    3. The number of jobs created or maintained as a result of the capital investments.
    This summarized data will be published on the USCIS Web site for each fiscal year following the publishing of the Form I-924A. The Form I-924A is available for review at www.regulations.gov.

    Filed under EB-5 Law & Policy, EB-5 Resources, Updates from USCIS

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