U.S. Citizenship and Immigration Services (USCIS) released its latest data on EB-5 filings and regional centers (RCs) at its September 15, 2011, "EB-5 Immigrant Investor Quarterly Engagement" stakeholders meeting, showing that regional center (RC) filings and EB-5 approvals continued to increase. Included in the discussion were updates on I-924 information use, guidance for annual report filings, inquiries on service errors, removal of conditions, part-time versus full-time positions, duration of employment, acquisitions of existing businesses, indirect jobs, troubled businesses, job creation records, regional center geographic boundaries, and multiple investors. There was also an open forum Q&A.
USCIS Director Alejandro Mayorkas said the EB-5 program is a high priority for USCIS and that the agency realizes its job-creating potential. He noted that the implementation of premium processing will take time because the agency must draft a new form, but he said USCIS will try to speed up adjudications anyway. He also said that a decision board will be implemented soon for regional center applications, and that the agency realizes the board needs to be staffed with experts. To that end, USCIS has hired an economist and three business analysts, and is open to hiring more if needed.
Mr. Mayorkas also said USCIS is working on an EB-5 policy memorandum but will not issue a final memo until the agency receives more comments from EB-5 stakeholders.
The following is a summary of selected points from USCIS's presentation:
RC data. USCIS noted that there are currently 173 approved RCs operating in 40 states, including the District of Columbia and Guam, which was an increase of 26 since the last stakeholder meeting. Over 90 percent of the individual Form I-526 (Immigrant Petition by Alien Entrepreneur) petitions filed each year are filed by those who are investing in RC-affiliated commercial enterprises.
USCIS figures continue to show a steep increase in the number of RC filings and EB-5 visa approvals. The agency reported 176 initial RC proposal filings in the first three quarters of fiscal year (FY) 2011, compared to 110 initial filings in all of FY 2010. The number of amended RC proposal filings also increased by the end of the third quarter to 73; there were 42 filings received for all of FY 2010.
The agency also reported that it has issued a higher percentage of approvals of RC filings. In the first three quarters of FY 2011, the agency approved 46 initial RC proposals and denied 23, an approval rate of 67 percent. This was a big increase from FY 2010, when USCIS approved 36 and denied 30, an approval rate of 55 percent. The approval rate of amended RC proposals in the first three quarters also rose to 84 percent, with 32 approvals and 6 denials. By comparison, in FY 2010 USCIS approved 42 amended RC proposals and denied 11, an approval rate of 71 percent.
USCIS also reported significant increases in individual I-526s and I-829s (Petition by Entrepreneur to Remove Conditions). In the first three quarters of FY 2011, USCIS received 2,608 I-526 petitions, compared to 1,955 for all of FY 2010. The increase in the number of I-829 petitions was even more dramatic, with 1,753 received in the first three quarters. By comparison, USCIS received 768 I-829 petitions in all of FY 2010.
In the first three quarters of FY 2011, the agency approved 999 I-526 petitions and denied 224, an approval rate of 82 percent, while in all of FY 2010 USCIS approved 1,369 and denied 165, a higher approval rate of 89 percent. USCIS approved 436 I-829 petitions and denied 34 in the first three quarters, an approval rate of 93 percent, compared to approving 274 and denying 56 for all of FY 2010, an approval rate of 83 percent.
USCIS also reported that the target processing time for I-526 petitions is 5 months, and the target processing time for both initial and amended regional center proposals is 4 months. USCIS said it is "currently making adjustments to improve the accuracy of EB-5 case processing times that are published on the USCIS website and will post the case processing times once this process is finalized." USCIS noted that the California Service Center strives to finalize EB-5 cases within 30 days after responses to RFEs are received.
USCIS is on track to approve a record number of EB-5 visas. Its preliminary estimate is that 3,706 EB-5 visas were issued as of September 12, 2011, compared to 1,885 in all of FY 2010. The previous record was 4,218 EB-5 visas issued in FY 2009.
Common issues resulting in RFEs or denials in I-924 applications. USCIS noted the following reasons why an application may receive an RFE or denial, and included some tips on how to properly complete various sections of the I-924:
1. Business Plan and Economic Analysis for Each Requested Industry Category (Form I-924, Part 7):
A. The application is not supported by a business plan and economic analysis for at least one investment project with sufficient detail to show in verifiable detail how capital investment offerings in the requested industry will create jobs;
B. Insufficient evidence and/or narrative that describes the investment project activities that the regional center will engage in for each requested industry category, to include;
- The proposed number of investors for the project(s);
- The timeline for starting and completing the projects to demonstrate the requisite job creation;
- A financial plan or budget including capital required and expenditures for the investment projects.
2. Reliability and Appropriateness of Data Sources for Economic Model Inputs (Form I-924, Part 7):
A. The application of national or state data in the economic model when more accurate regional data is readily available to demonstrate the economic impacts/job creation of the regional center's investment projects;
B. The data source for economic or business activity estimates for a given investment project; e.g., the data sources for estimates regarding total revenue generated or for the estimated construction costs (if applicable) for a given project.
3. Choosing and Identifying Appropriate NAIC Codes (Form I-924, Part 7):
A. NAIC code should be appropriate to the requested industry;
B. An overly broad NAIC code may not be representative of the requested industry. For example, "NAIC Code 62" includes assisted living facilities but also covers hospitals. There may be a more appropriate [code] for the requested industry;
C. An overly narrow NAIC code may be too restrictive for the scope of the contemplated investment project(s) in the requested industry.
4. Exemplar Form I-526s submissions should be documented with evidence with the level of detail required for an I-526 petition so that the exemplar petition if approved will facilitate the review of individual Form I-526 petitions (Form I-924 instructions, page 1). An exemplar Form I-526 petition should therefore:
A. Include a Matter of Ho compliant business plan and an associated economic analysis;
B. Include project timeframes for milestones: project commencement, key construction or implementation dates, completion date, and time line for the requisite job creation;
C. Clearly request approval for an exemplar I-526 and include a copy of an exemplar I-526;
D. Include all documents needed for I-526 approval excluding an investor's capital investment information;
E. Identify the amount and source of non-EB5 financing needed for the project.
I-924A annual report filings. USCIS noted that a Form I-924A filing will be required for all approved regional centers for FY 2011 on or before December 29, 2011. There is no filing fee for the I-924A. The I-924A supplement to the I-924 is used by approved regional centers to meet the yearly RC reporting requirement in 8 CFR 204.6(m)(6). Each approved regional center now must file the I-924A to report regional center-related activities for the preceding fiscal year within 90 days of the end of the fiscal year (on or before December 29 of the calendar year in which the fiscal year ended).
USCIS said it plans to publish on its website summarized regional center data "to be responsive to requests for this information from a broad spectrum of USCIS' external stakeholders, to include members of Congress, other federal agencies, state agencies, and major media outlets." This information will include attributes of the regional center-affiliated capital investments, such as the geographic areas and industry categories receiving investment capital; the volume of regional center-affiliated capital invested; and the number of jobs created or maintained as a result of the capital investments.
Geographic regions. USCIS responded to a question about what criteria are used in determining the appropriate geographical boundary for a regional center that has one initial "shovel-ready" project but is planning future projects in a larger geographical area, but the details and location of the future projects are unknown:
USCIS's agenda and full presentation are available at http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=13c5f5873e661310VgnVCM100000082ca60aRCRD&vgnextchannel=e0b081c52aa38210VgnVCM100000082ca60aRCRD (scroll down to the links at the bottom).
- A regional center may be granted jurisdiction over a limited geographic area for the purpose of concentrating pooled investment in defined economic zones.
- A regional center must demonstrate in the Form I-924 that its activities will focus on the requested geographic region, and not simply on isolated and unrelated areas within the region.
- It may be more appropriate for the regional center to initially request a geographic area that is in keeping with the economic impacts of the existing project, and then subsequently file an amendment request for an expanded geographic area as the details and location of future projects become known.
The full list of RCs by state is available at http://www.uscis.gov/eb-5centers/.