to the findings and if the job numbers need to be changed
after the initial round of decision-making, the changes could
have significant impact to the point that the project may no
longer be viable. Therefore, the modern business plan plays an
important role even at the preliminary stage due to the analysis
of third-party data. Not only does the business plan provide a
comprehensive representation of the project, it also provides
industry-based verification of project costs and potential
revenues, which gives the much needed assurance to USCIS that
the project is realistic and accurate according to their definition
of being “credible”.
The Trends of RFEs
By examining the trends of recent RFEs, EB-5 service professionals can see that USCIS has provided further clarity when defining
what constitutes a credible and comprehensive business plan.
In 2013, many RFEs questioned the validity of tenant
occupancy-based job projection methodologies, the duration
of construction, the cost of construction, accuracy of market
analysis, and the use of outdated data. At that time many
clients moved away from tenant occupancy and began counting only indirect construction jobs. The solution for the proper
response during this era was to utilize third-party data for
verifying construction costs and properly supporting market
analysis. The third-party data was based on specific geographic
location and industry NAICS codes, usually at a minimum of
the four-digit level.
Then in 2014, RFEs focused on heightened scrutiny of the
project’s financial expenses, proof of permits and licenses, and
the demand for a transparent hiring timeline. The issues were
quickly resolved through the use of third-party data to verify
revenue and expense inputs. In addition, project developers had
to provide further documentation for any permits or licenses
and a transparent hiring timeline with sufficient detail.
verification of inputs utilized to calculate job creation counts
was required to ensure that projects and their investors would be
protected in the long run. Job creation has been and will be the
central goal of this program, and it needs to be protected.
Due to these changes, the business plans written for the EB-5
program have evolved in the last four years. They are more
sophisticated, with interweaving parts supported by third-party
data, and a narrative that has to convince a skeptical USCIS
adjudicator to believe that the project is not only feasible but also
sustainable. This means it is imperative to have the right team of
experts who can establish a solid initial strategy and clear the path,
minimizing the pitfalls that can occur during the process.
Conclusion
Further changes to the EB-5 program are inevitable and the
current status quo will soon be defined by a new standard, but
the experts in the EB-5 industry will be ready to take on the
challenge.
Understanding the evolution of the EB-5 business plan may
shed light on current standards in 2016 and beyond. Including
the elements of Matter of Ho will make a business plan comprehensive, but the proper use of data will make the business plan
and the project credible. These are the two fundamental qualities
that USCIS is looking for. By laying the proper foundations on
unshakable data, your business plan can be the core of a strong,
solid EB-5 project.
★
https://www.uscis.gov/sites/default/files/USCIS/Laws/Memoranda/2013/May/EB-5 Adjudications PM
(Approved as final 5-30-13).pdf (pp 19-20).
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https://www.uscis.gov/iframe/ilink/docView/INT/HTML/INT/0-0-0-65/0-0-0-4783.html
Today, RFEs request a comprehensive marketing strategy and
a SWOT analysis of market competitors. To ad dress this, project
developers have had to disclose a comprehensive marketing
strategy, and business plan writers have had to utilize multiple
sources of third-party data and customized data research,
in order to craft a proper SWOT analysis of the project’s
competitors.
Through the narratives of RFEs it is evident that USCIS now
has financial analysts reviewing the financial projections at a more
microscopic level. This means the financial projections have to be
achievable, and also sufficiently supported, to prove the accuracy
in the context of a project’s location, industry, and scope.
Business Plans Today
Adapting to change is never easy, but the growing pains of the
EB-5 industry have been necessary to ensure a healthy and
vibrant community for stakeholders and investors. In hindsight,
the standards absolutely needed to be raised. For example,
WWW.EB5INVESTORS.COM
Ellen Choe is the president of Elite Visa
Plans (“EVP”), a team of business plan writers
and consultants focused on EB-5 and other
immigration-related business plans. Choe has
broad practical knowledge of the EB-5 industry,
and has personally overseen the writing of over
700 business plans. She is frequently invited to
speak locally and nationally. Choe also serves
as the vice president of the Overseas Korean
Traders Association of Los Angeles and as
ambassador for the Overseas Korean Traders
Association in Korea.
Robert Lee is the CEO of Elite EB-5 Solutions
LLC. He helps clients structure a strong process
management team to streamline the application process and focus on efficiency and execution. His strategic approach to consulting helps
clients understand potential risks when assessing the proper tension between necessary
business decisions and EB-5 compliance. Lee
formerly managed forecasting, reporting and
analysis teams for big-box retail accounts in the
U.S. and Canada. He then worked as Director
of Financial Planning & Analysis for a mid-sized
jewelry company.
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