Signaling Flexibility Within Limits, USCIS Releases Final Version of EB-5 Policy Memo
On May 30, 2013, U.S. Citizenship and Immigration Services (USCIS) released the final version of a long-awaited memorandum on EB-5 adjudications policy that went through four iterations beginning in November 2011.
The memo begins by reviewing the purpose and structure of the EB-5 immigrant investor program and reviews terminology and definitions, noting that the program's purpose is "to promote the immigration of people who can help create jobs for U.S. workers through their investment of capital in the U.S. economy."
Regarding the "preponderance of the evidence" standard, the memo notes that adjudication of EB-5 petitions and applications must establish each element by showing that what is claimed is "more likely so than not so." This is a lower standard of proof than the "clear and convincing" or "beyond a reasonable doubt" standards. "The petitioner or applicant does not need to remove all doubt from our adjudication," the memo states. Even if an adjudicator has some doubt, if the petitioner or applicant submits "relevant, probative, and credible evidence" that leads to the conclusion that the claim is more likely than not, or probably true, the petitioner or applicant has satisfied the standard of proof.
The memo allows a degree of flexibility in certain areas, such as "to account for the realities and unpredictability of starting a business venture." The memo notes, for example, that the EB-5 program allows an immigrant investor to become a lawful permanent resident, without conditions, if he or she has established a new commercial enterprise, substantially met the capital requirement, and can be expected to create within a reasonable time the required number of jobs. All of the goals of capital investment and job creation need not have been fully realized before the conditions on the immigrant investor's status have been removed. Rather, the memo states, the regulations require the submission of documentary evidence that establishes that it is more likely than not that the investor is in "substantial" compliance with the capital requirements and that the jobs will be created "within a reasonable time."
USCIS has some latitude in interpreting what constitutes "within a reasonable time," the memo notes, adding that the regulations require that the business plan submitted with the Form I-526, Immigrant Petition by Alien Entrepreneur, establish a likelihood of job creation "within the next two years." Because the law contemplates two years as the baseline expected period in which job creation will take place, the memo explains, jobs that will be created within a year of the two-year anniversary of the immigrant's admission as a conditional permanent resident or adjustment to conditional permanent resident status may generally be considered to be created within a reasonable period of time. Jobs projected to be created beyond that time horizon "usually will not be considered to be created within a reasonable time, unless extreme circumstances, such as force majeure, are presented," the memo warns.
Following the theme of flexibility with limits, the memo acknowledges that business strategies "constantly evolve." Therefore, Form I-924, Application for Regional Center, provides a list of acceptable amendments, including "changes to organizational structure or administration, capital investment projects (including changes in the economic analysis and underlying business plan used to estimate job creation for previously approved investment opportunities), and an affiliated commercial enterprise's organizational structure, capital investment instruments or offering memoranda." The memo notes, however, that such formal amendments to the regional center designation are not required when a regional center changes its industries of focus, geographic boundaries, business plans, or economic methodologies, unless the regional center elects to pursue an amendment because it seeks certainty in advance of adjudication.
The memo also notes that unless there is reason to believe that a prior adjudication involved an objective mistake of fact or law, USCIS should not reexamine determinations made earlier in the EB-5 process. Absent a material change in facts, fraud, or willful misrepresentation, the memo states, USCIS should not re-adjudicate prior USCIS determinations that are subjective, such as whether the business plan is comprehensive and credible or whether an economic methodology estimating job creation is reasonable.
Other topics the memo discusses include targeted employment areas; new commercial enterprises; purchases of existing businesses that are restructured or reorganized; expansion of existing businesses; pooled investments in non-regional center cases; evidence of the establishment of, or investment in, a new commercial enterprise; job creation; qualifying employees; the sequence of individual investor filings; business plans; and the impact of "material changes" to a project.
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