Continued from page 88
Turning Point
In the ever-changing landscape of the EB-5 program, one thing
has stayed constant for the business plan. It is the definition of
Matter of Ho.2 Although what defines the content of a business
plan has not changed, the rigor of USCIS’s scrutiny of the
Matter of Ho criteria has evolved a great deal. This is evident
through the volume of memo, and RFEs released in the last
four years. The thought process of USCIS adjudicators displays
identifiable patterns, which have become more clear with the
experience of writing hundreds of business plans and 50 RFEs.
Before 2013, project planners often regarded the business plan
as more of an afterthought. All of the business strategies were
determined through discussion between the management team,
attorneys, and economists. Once these ideas were fleshed out
sufficiently, a business plan writer was engaged to merely organize
the details and put ideas to paper. Financial projections, which
are the crux of the business plan, were often just based on the
opinion of the management team. If there was data involved, it
may have been outdated or loosely tied to the project. This was
an accepted practice in the EB-5 program to support revenue
and expense assumptions until 2012. Many viewed the listed
requirements of Matter of Ho as more of a suggestion than strict
guidelines. As unbelievable as that may seem today, there were
many I-526 projects that received approval through this process.
Today, the only remnant of this process is in the development of a
“Hypothetical Project” for a new regional center.
The May Memo officially confirmed the agency’s intention
to examine in detail the factual foundations of assumptions
and projections presented in the business plan. By articulating as a matter of policy that business plans would not be
“comprehensive and credible” without such detailed support,
USCIS required more documentary evidence of legitimacy from
regional centers and their affiliates in the process of developing
and marketing their EB-5 projects. It became unquestionably
clear that USCIS would not find credibility based on the mere
opinions of regional center management, and the industry
determined that third-party data was the best way to objectively
establish a basis for the business plan.
The data used must also be relevant to the project in terms of
industry codes, geography, and timing (ie. must provide enough
historical data and/or be recent enough for current projections).
The type of third-party data can vary from industry to industry.
Therefore, the right data must be researched and selected to
represent the project specifically, as the subsequent analysis
will need to be leveraged and integrated into the business plan.
Additionally, certain industries such as assisted living, hotel,
and real estate may require more third-party data for verifying
potential revenue and construction costs. In the case a business
plan is insufficient to establish the basis that is required, a
third-party feasibility study report or a custom data report may
be needed.
Continued to page 90
Our Experience Sets Us Apart
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