EB5 Investors Magazine | Page 22

Continued from page 19 entities) in which the EB-5 investors have or will make their capital investment. This line of questioning from these three important sections undoubtedly establishes USCIS’s concern with the management, ownership, and investment structure of the regional center and affiliated investments. In an attempt to address the concerns related to the management and control mechanisms of regional centers, United States Congressman Jared Polis introduced legislation to Congress on January 28, 2015. This bill proposes that individuals that have been found liable for certain criminal and civil acts such as securities violations or involved with certain illicit activities such as money laundering and human trafficking be prohibited from owning or managing regional centers.3 This pending legislation would help purify the EB-5 industry of certain bad players. In order to adequately satisfy USCIS’ concerns, an applicant should fully disclose all stake holders in the regional center’s ownership and management structure. The applicant should present well-defined structure diagrams supported by evidence and relevant commentary to USCIS, noting ownership and management of each particular entity across the regional center entity network. Regarding the proposed investment structure, it is recommended that the applicant present a separate and distinct investment structure diagram supported by evidence and relevant commentary within the Operational Business Plan demonstrating the flow of investment, loans (if applicable), and potential returns. The third question of Part 3 asks the applicant to describe the geographic area of the regional center. USCIS asserts that this area must be contiguous, and requests an actual map as well. All too often maps provided to USCIS through the Form I-924, Executive Summary, and Operational Business Plan are not aesthetically acceptable as they are confusing, digitally incompetent, and messy. Maps presented to USCIS should include highlighted counties of the proposed geographic region, and if an applicant is proposing a larger regional center geography consisting of many counties, the actual names of the counties at play should not be listed on the map. For larger regional center geographies, the applicant should supplement the map with a table listing the counties involved. Further, the economic analysis within an I-924 application must demonstrate that the regional center’s activities will have an economic impact within the entire requested geographic region evidenced by analysis of factors such as industry trade flows and commuting patterns. Question (4) of Part 3 asks the applicant to describe the regional center’s administration, oversight, and management functions to monitor EB-5 capital investment activities and resulting job creation or maintenance. This is an opportunity for the applicant to provide both in the Form I-924 and in its Operational Business Plan a brief analysis of its internal controls and monitoring systems. The applicant should be attentive to Question (5) of Part 3 as USCIS has increased its inquiries concerning this section. Question (5) asks for a list of past current and future marketing activities. Additionally, USCIS asks for marketing budgets and information about the recruitment of potential investors. USCIS has issued RFEs asking applicants to indicate: 20 [t]he amount of funds dedicated to the Regional Center; The source of such funds; How the amount is sufficient to sustain the Regional Center; and The past, current and future promotional activities for the Regional Center, to include a description of the budget for this activity, and the source of the funds that have or will be used for these activities.4 A general statement should be made on the Form I-924 addressing this question. Furthermore, the applicant should provide a separate and distinct 2 to 4 page exhibit to the Operational Plan establishing the marketing activities, pro forma budget, start-up costs, and source of such funds associated with the regional center. Question (6) of Part 3 inquires how the regional center examines and screens investors to ensure that their source of capital is lawful and that they are able to invest the amount of capital required. This is easily addressed by providing a statement that the regional center only markets to accredited investors and that the manager has designated a particular qualified employee or other qualified individual to screen all prospective investors as to lawful source of capital and to fully and timely invest the requisite amount of capital. This answer should be duplicated and re-emphasized within the Operational Business Plan. Question (7) relates to listing the Industry Category Title and NAICS code which is also presented in the Economic Analysis. As alluded to earlier, this article does not attempt to tackle the minutiae of EB-5 economic analysis, but the suggestion to first time I-924 applicants is to retain an economist with a proven history of success in his or her economic methodological presentation to USCIS. An EB-5 economist selection should be handled with care. Unlike other areas of immigration, RFEs on Form I-924 are the norm. Nonetheless, if an EB-5 team is properly selected, and the I-924 application package is drafted, compiled, and submitted with precision and accuracy, it is possible to obtain approval without an RFE. ★ Shae Armstrong Shae Armstrong is the principal of the Law Office of Shae Armstrong, PLLC, an EB-5 consulting and p