There are many advantages to becoming a USCIS-designated regional center, both for yourself and for your potential EB-5 investors.
Perhaps the greatest edge given to Regional Centers is leeway with job creation–where an EB-5 investor investing in a US-based business venture on their own must demonstrate that they will directly create ten permanent jobs.
EB-5 investments made through Regional Centers, on the other hand, are allowed to meet the job-creation burden through jobs that are created either directly or indirectly as a result of the investment.
That might seem like a slight difference, but it has had a massive impact on how EB-5 investors have chosen to inject their capita and it shows in the numbers.
At the moment, a whopping 95% of EB-5 investors are investing through Regional Centers rather than direct investment, to the tune of several billion dollars every year.
The program has boomed in popularity in recent years, with investors from all of the world lining up at the door to hand their money over to a Regional Center.
In sum, there’s really never been a better time to become a USCIS-designated Regional Center.
So let’s take a look at what it takes.
Filing the I-924: Application for Regional Center under the Immigrant Investor Pilot Program
In order to become a Regional Center, you’re going to have to file Form I-924 with USCIS--in practice, most Regional Center applicants, if not all, have legal counsel prepare and file the application for them.
Note that Regional Centers can be any manner of business association, such as a partnership, limited liability company, or even a state or local government agency.
The only other stipulation is that the business entity must be established in the United States or its territories and that the person filing the I-924 (you) has the executive authority to do so.
The usual tips for filling out USCIS forms apply as ever:
- Use only blue or black ink.
- Send photocopies of accompanying documents rather than originals (but be sure to send the originals of the actual I-924 itself).
- Documents written in a language other than English must be accompanied by a full English translation, as well certification that the translation is full, accurate, and prepared by a person sufficiently competent in both languages.
The filing the fee for the I-924 is $6,230, to be paid in check or money order and made payable to the U.S. Department of Homeland Security.
Crafting Your Business Plan
The most crucial component to the I-924 application is the business plan that must accompany the application.
Here, you will lay out in great detail to USCIS just how it is that your new Regional Center is going to wisely invest capital from EB-5 investors and turn it into jobs right here at home.
This portion of the application is meant to serve as evidence to USCIS that you have done your homework and can actually deliver on your promise to bring jobs to a particular geographic area, so the more thorough and finely detailed your plan is, the more likely you are to be approved.
A properly crafted business plan will contain a lot of data, some of which you may not be able to gather yourself.
Because USCIS wants proof that your Regional Center will have a lasting impact on the community around it, you may need outside help from everyone from economists, statisticians, accountants, and naturally, lawyers.
What you will need will of course vary depending on what grand plans you have, but at the very least, you must have data sufficient to project that you will be creating and sustaining at least ten jobs for every EB-5 investor you attract.
How you get there is up to you – USCIS only demands that you use “statistically valid forecasting tools that [show] and [describe] how jobs will be created for each industrial category of economic activity (for example, manufacturing, food production/processing, warehousing, tourism and hospitality, transportation, power generation, agriculture, etc).”
Any analysis of job creation for a particular industry must be accompanied by a copy of an actual business plan for a business in that industry, or an exemplar capital investment project already in the works.
Besides the job-creation evidence, your I-924 must also include:
- A detailed map that clearly identifies the geographic boundaries of the region that your Center will be serving.
- Detailed descriptions of any past, current and future promotional activities that you either have done or plan on doing for the Regional Center. You must include (at least) a description of the budget dedicated toward promotional activity, as well as evidence of any funds that have been committed to the Regional Center specifically for promotional work.
- An “impact statement” – essentially a narrative (backed up with statistically-valid projections) concerning what positive impact your Regional Center will have, regionally as well as nationally, through its sponsored capital investment projects. USCIS suggests that you address:
- Household earnings
- Demand for business services
- Effects on utilities
- Maintenance, repair, and construction projects.
- Documentation proving that both the Regional Center and your potential EB-5 investors or associated commercial entities are fully compliant with all statutory, regulatory, and precedent-mandated requirements. Documents to this end can include (but are by no means limited to):
- Descriptions of the organizational structure of all of these entities (that means you, too), as well a copy of their articles of incorporation, certificate of incorporation, or legal creation as an LLC, partnership, and so on (whatever applies).
- Drafts of subscription agreements for investment into the commercial enterprise.
- Draft escrow agreement with instructions (if applicable).
- A list of financial institutions that may serve as the Escrow Agent (again, if applicable).
- Drafts of letters, memoranda, or some similar offer that will be made in writing to an immigrant investor that offers the opportunity for capital investment through the regional center.
- Drafts of contracts, letters of intent, interagency agreements, memoranda of understanding or the like between any agency, party, or organization that will engage in activities on behalf of the Regional Center.
In Re Ho Compliance: Making Sure Your Business Plan Makes the Grade
In the case of In Re Ho, the Board of Immigration Appeals established the current standard that USCIS uses to determine if a business plan is robust enough to warrant approval, and it’s a fairly high bar.[1]
USCIS wants to see specificity, reliable growth projections, credibility, and finally, some tangible steps you and your investors have already taken toward accomplishing your business goals–mere talk isn’t good enough.
The basics to meeting In Re Ho compliance are as follows:
Demonstrate meaningful, concrete business activity [2]. In the Ho case, the would-be investor had put up his $500,000 in an on-shore bank account and signed a commercial lease for his business; this was deemed insufficient, because that was all that he did toward establishing his new business.
For a successful application, you’re going to need more than that.
Remember, unlike a direct investment EB-5 application (where the investors themselves write the business plan), the business plan here is all on you – the investors are just going to provide the capital.
However, you still have to show that you’ve taken concrete steps toward making these projects happen.
Place your capital at risk. [3] The Ho court determined that a successful applicant must demonstrate that they’ve placed their capital at risk – that is, that they’ve already put money down in such a way that they risk losing it.
In Ho, the above-mentioned lease had an “escape clause,” which would allow the investor to back out at any time and sublet the property.
The court did not appreciate this sort of bet-hedging by the petitioner, and his application was ultimately denied.
Show that your investors’ capital is lawfully acquired. [4] In the Ho case, the petitioner claimed that he had derived his income from his practice as a medical doctor, as well as assets acquired from his wife.
However, he did not submit any documentation showing that he actually was a doctor, or that he was actually married to the woman he claimed was his wife. Don’t be like Ho!
You and your investors should hand over bank statements, tax returns, or any statement of their assets that tend to prove that all capital was lawfully derived and that you actually have the right to spend it.
Give compelling proof that at least 10 jobs will be created or sustained for every EB-5 investor. [5] A successful business plan will outline what positions have either already been created or will be created, their specific responsibilities, the type of employment (full or part-time), and how long they will be retained (temporary workers hired only at start-up aren’t good enough).
It’s also a good idea to research the impact that similar business ventures have had in their communities.
You can provide this research to USCIS as proof that your investments will have a positive (if indirect) effect on local employment.
Conclusion
As a final note: any business plan put forward to USCIS must be credible, which means no more than its commonplace meaning–if your plan is to sell moon rocks to Martians, USCIS won’t buy it.
Granted, that's a somewhat outlandish example, but the contrast is helpful.
As long as you present something realistic and have ample proof that it will work, designation as a Regional Center should be forthcoming.
The information above presents a basic picture of what will need to go into your Regional Center application.
Generally, most I-924 applicants depend on a variety of legal and financial advisors to provide them with the appropriate analysis and evidence.
As you prepare your business plan and application, consider speaking with an attorney to help you launch a successful Regional Center.
[1] Matter of Ho, 22 I&N Dec. 206 (AAO 1998).
[2] Matter of Ho, 209-210.
[3] Matter of Ho, 210.
[4] Matter of Ho, 210-211.
[5] Matter of Ho, 211-212.
