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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:
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[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