USCIS Questions and Answers:
EB-5 Economic Methodologies,
July 5, 2012
When stakeholders sought clarifica
tion on
statements made at a public eng
agement by
two economists — who had wor
ked on the
Immigrant Investor Program — USC
IS released
a short memo discussing EB-5 projects
involving
hotel/resort development and whether
Regional
Center funds from EB-5 investors cou
ld be used
to acquire real estate.
The question asked USCIS to prov
ide guidance on the economically feasible
point in
time for inputting projected funds
— spent by
visitors — into economic models,
to project
indirect and direct jobs when the EB5 project
involved the development of a hote
l or resort.
USCIS responded by saying that
job credit
based on “visitor spending” is appropr
iate only
where the applicant or petitioner can
show, by
a preponderance of evidence, that
the EB-5
Program would result in an increase
in new
visitor arrivals or spending in the area
. USCIS
explained, “If the applicant or petition
er presents a reasonable case that the visitor
spending,
and the tourism generated by a proj
ect, is new,
then it may be reasonable to con
clude that
the specific project has generated
an increase
in demand, and thus, has generated
increased
employment in the region, resultin
g from the
projected increase in visitor spending
.”
The second question asked USCIS
whether
funds from EB-5 investors may
be used to
acquire real estate. USCIS respond
ed by saying that real estate acquisition is not
generally
recognized as a job-creating activity
in and of
itself. Therefore, while it is permissib
le to use
EB-5 funds to purchase real estate,
it is “not
generally reasonable to treat funds spen
t on real
estate acquisition as inputs to an emp
loyment
impact model.” If a project were to
use EB-5
funds for acquiring real estate, USC
IS recommends that this apportionment be
detailed in
the business plan. USCIS further
recognized
that certain soft costs directly rela
ted to real
estate transactions may be reasonably
counted
as valid job-creating expenditures
and inputs
to regional input-output models.
USCI S Mes sa ge
from th e Di re ct
or, New EB-5
Prog ra m Office
, Ju ly 18, 201
2
USCIS’
director,
Alejandro
Mayorkas, an
N.
nounced the
creation of
new office in
a
Washington
D.C. to oversee the admin
istration of
the Immigra
Investor Pro
nt
gram. Led by
a new Chief
and the addi
tion of new
staff to th
EB-5 Program
e
team, the cre
ation of t