USCIS Continues Positive Reform of the EB-5 Immigrant Investor Program

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By Wassem Amin, Esq.

On May 30, 2013, USCIS issued the final version of its EB-5 Adjudications Policy.  Although it has been around since 1990, the EB-5 Visa, also known as the Immigrant Investor Visa, has been rising in popularity over the past couple of years.  Summarily speaking, the EB-5 Program is based on three main elements: (1) the immigrant’s investment of capital; (2) in a new commercial enterprise; (3) that creates jobs.

This article summarizes the main changes in USCIS’s adjudications of EB-5 investor and regional center applications.  A complete overview of the EB-5 Visa can be found in previous posts.

  • USCIS explicitly mentioned, for the first time, that administration of the program is done “with the utmost vigilance to program integrity” and that fraudulent applications are referred to appropriate law enforcement and regulatory authorities.  This is perhaps due to the recent high profile fraudulent EB-5 Regional Center in Chicago.
  • Ability to diversify investment:  USCIS clarified that the capital invested may be deployed into a portfolio of wholly-owned businesses, so long as all capital is deployed through a single commercial enterprise.  In other words, an immigrant investor’s capital, whether through a direct investment or regional center, can create a holding company that would receive the funds and distribute them to different businesses – so long as one or more of the portfolio of businesses or projects can create the required number of jobs.
  • Pooled Investments in Non-Regional Center Cases: In a direct investment context, USCIS indicated that the new commercial enterprise can consist of pooled investments OR can have owners who are not applying under the EB-5 program.
  • Geographic Scope of a Regional Center: In adjudicating Regional Center applications, the geographic scope of a Regional Center will be determined on a case-by-case basis.  The Memorandum noted that “the reasonableness of the proposed regional center geographic boundaries may be demonstrated through evidence that the proposed area is contributing significantly to the supply chain, as well as the labor pool, of the proposed projects.”
  • Removal of Conditions on Permanent Resident Status:  USCIS reiterated that the EB-5 Program allows an immigrant investor to become a lawful permanent resident, without conditions, if the immigrant investor has established a new commercial enterprise, substantially met the capital requirements, and can be expected to create within a reasonable time the required number of jobs.  Of particular significance is the fact that all of these requirements need not have been fully realized before the removal of conditions.  It is sufficient that evidence submitted establishes that “it is more likely than not” that the investor is in substantial compliance with the program and job creation will result within a “reasonable time.”  “Reasonable time” is a fact-specific determination, but USCIS indicated that, in most cases, the maximum ceiling allowed will be a one year extension after the original two years.
  • Impact of Regional Center’s change of Plans on Investors: A particularly laudable shift in policy is USCIS’s announcement in the memorandum that it will no longer deny investors’ petitions to remove conditions solely bases on failure to adhere to the plan contained in the Form I-526 (the initial immigrant investor application) OR to pursue business opportunities within an industry category previously approved for the Regional Center.  This will allow Regional Centers significant leeway in pursuing different options if their initial proposed investment fails, which also increases the likelihood of a successful exit for the investor. However, there is a draw back, USCIS noted that:

“it recognizes the fluidity of the business world and therefore allows for material changes to a petitioner’s business plan made after the petitioner has obtained lawful permanent resident status.  However, immigrant investors, and the regional center with whom they associate, should understand that availing themselves of this flexibility does decrease the degree of predictability they will enjoy if they instead adhere to the initial plan that is presented to and approved by USCIS.”

USCIS continues to make positive changes to the EB-5 Immigrant Investor Program.  With many practitioners hopeful that the visa quota will be increased if the new immigration bill passes, the EB-5 Program will most likely to continue to gain popularity among foreign investors as well as an attractive capital source for developers stateside.

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Wassem M. Amin, Esq., MBA is an Attorney at in Boston, MA. Wassem has extensive experience as a business advisor and consultant, domestically and abroad (in the Middle East region), having worked as a consultant for over 9 years. Wassem currently focuses his practice on Corporate Law, Business Immigration Law, and International Business Transactions.  Wassem is also the Vice-Chairman of the Middle East Division for the American Bar Association.  For more information, please visit http://www.dharlawllp.com and email Wassem at wassem@dharlawllp.com.

Disclaimer: These materials have been prepared by Dhar Law, LLP for informational purposes only and do not constitute legal advice. This article is not intended to create, and receipt of it does not constitute, a lawyer-client relationship, and readers should not act upon it without seeking professional counsel. This material may be considered advertising according to the rules of the Supreme Judicial Court in the Commonwealth of Massachusetts. Reproduction or distribution without prior consent of the author is prohibited.

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