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.
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).
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.
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.
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 & McCarthyEconometrics and Project Planning
Kevin Wright of Wright JohnsonBusiness Plan Preparation
Suzanne Lazicki of Lucid Professional WritingCorporate Law
Jor Law and Michael Homeier of Homeier & Law, P.C.Escrow
Brian Terwilliger of NES FinancialRegional Center Resources and Networking
Michael Gibson of USAdvisors.org
Peter Joseph of Association to Invest in USARegional Center Marketing
Brian Su of Artisan Business Group
“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.
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.
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.
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.
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.
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.”
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.
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.
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.
EB-5 Statistics 6/16/2010
June 17, 2010 Leave a comment
The following statistics related to the EB-5 program were reported by USCIS at the EB-5 stakeholder meeting on 6/16/2010:
- There are currently 94 approved Regional Centers (RCs), operating in 34 states, inclusive of the District of Columbia and Guam.
- Approximately 90-95% of the individual Form I-526 petitions filed each year are filed by Alien Investors who are investing in RC-affiliated commercial enterprises.
- There are approximately 65 RC Proposals pending with USCIS.
Statistics for EB-5 visas reflect the increasing popularity of the program, and a relatively high rate of approval.
Individual EB-5 Petition Statistics Oct – May FY 2010 Receipts Approvals Denials Form I-526 Petition 1,100 955 113 Form I-829 Petition 438 188 33
Individual EB-5 Petition Statistics FY 2009 Receipts Approvals Denials Form I-526 Petition 1,028 966 163 Form I-829 Petition 437 335 55
EB-5 Visa Usage Fiscal Year Total EB-5 Visas Issued FY10 (Oct-May) 1,494 (32% I-485, 68% DS-230) FY09 4,218 (24% I-485, 76% DS-230) FY08 1,360 FY07 806 FY06 774
EB-5 Inquiries
June 15, 2010 Leave a comment
The USCIS EB-5 webpage now has a link for EB-5 Inquiries under the link for the list of Regional Centers. The content (contact email address and list of acceptable inquiries) is familiar — nearly identical for example to the handout distributed by USCIS at the March 16th EB-5 forum at the California Service Center.
The list of acceptable inquiries is surprisingly broad, even including “to request for expedited processing of already filed I-526s, I-829s, or RC Proposals” and “to request for Regional Center Proposal filing instructions, procedures, and Regional Center general information documents.”
RC Name Changes
June 11, 2010 Leave a comment
The USCIS list of approved Regional Centers has already been updated again, as of 6/10/2010, this time with a few name changes:
- EB-5 America is now DC Regional Center.
- Invest Idaho Innovation Regional Center has dropped “Innovation” from its title.
EB-5 Stakeholder Meeting
June 1, 2010 Leave a comment
The USCIS Office of Public Engagement has issued its invitation to an EB-5 stakeholder meeting on June 16. Interested parties may participate by teleconference or in person in Washington D.C. Topics for discussion can be submitted up to June 7. Please see the USCIS notice for details and information about how to RSVP.
“Pay to stay” news story
June 1, 2010 Leave a comment
IIUSA brought to my attention this useful article published a couple weeks ago, which discusses the EB-5 program in some depth with special reference to Regional Centers in California. The article also cites these important-to-keep-in-mind stats on the breakdown of EB-5 visas issued in 2009:
- China: 1,979
South Korea: 903
Britain: 326
Canada: 85
Japan: 84
India: 72
Russia: 60
Netherlands: 38
Mexico: 33
South Africa: 31
See the U.S. State Department website for complete EB-5 visa statistics.
CNBC on EB-5
May 26, 2010 Leave a comment
CNBC is talking about EB-5 today. The report provides a fairly comprehensive overview of the program, and features a stand-alone EB-5 example. They kindly don’t go into much detail comparing EB-5 to Canada’s smooth “buy a green card” program.
EB-5 Updates 