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Regional Centers -- Features, Benefits & Requirements


[Q] Many regional centers' marketing materials say their EB-5 projects have been reviewed and vetted by USCIS. True?

Yes and no. It's true that USCIS has reviewed their regional center designation application and approved the general parameters of the approved regional center application. However, the fact that a specific EB-5 project is carried out pursuant to the approved regional center does not guarantee approval of I-526s submitted for that specific project because:

1. USCIS still has to review the project to see if it complies or is consistent with the regional center parameters.

2. USCIS could decide that the approved regional center was approved by mistake or oversight and should be amended.

[Q] What are not-so-good things about regional center EB-5 program's inherent structure?

First, because you as an investor is a limited investor, you will not have the right to manage on daily basis. You will have the right to vote as a limited partner on important decisions facing your investment and immigration status. This cannot be helped as if each limited partner investor had the right to do as he or she wishes, there would be no way to run a project.

[Q] What is form I-924 for regional center designation or amendment application?

It is a new form proposed by USCIS and a draft was circulated by USCIS for comments. As of September 16, 2010, we did not hear that the form became official. The form is supposed to be used as the application form to apply for a regional center designation and to make amendments to the designated regional center. Now, some EB-5 practitioners believe the real reasons for the form are:

[Q] What is the term "capital investment project"?

[Q] USCIS appears to be using a term "capital investment project", but I can't find this term in the EB-5 regulations. What does the term "capital investment project" mean anyway?

The term "capital investment project" is a term -- not mentioned in either EB-5 statutes or regulations -- made up by USCIS to deal with a regional center based project where often there are two entities involved: new commercial enterprise and the job-creating entity.

[HOT] [Q] Do the new commercial enterprise and the capital investment project both have to be in TEA area?

For a Regional Center case involving a TEA investment, the question asks where the new commercial enterprise entity and the job-creating entity (which USCIS confusingly is referring to as the "capital investment project") must be located.

* key words: location of new commercial enterprise within TEA or principal place of business in TEA?

Legally, we would say the location of the new commercial enterprise does not matter (per Matter of Izumii), but USCIS appears to be requiring that the new commercial enterprise does its business principally in the TEA area. Here is the background on how this new issue arose.

[Q] May a regional center based EB-5 project invest alien investor's capital contributions in a non-profit company's projects?

No, but it can certainly invest the capital contributions received from alien EB-5 investors into a non-profit, job-creating company's project which would in turn create new jobs. Read Matter of Izummi, AAO precedent case. The precedent AAO case says it can, so that should be that.

[Q] Why do investment structures of various regional centers differ?

Investment structures of various regional centers differ because of different industries their EB-5 projects are involved in, offering documents, job-calculation methodology and capital investment structures contained in regional center applications submitted to and ultimately approved by CSC.

[HOT] [Q] Is there a professional association for regional centers operators?

Yes, it's called IIUSA, and their website is at: www.iiusa.org. There is an annual fee, and members of the IIUSA are composed of regional centers and immigration attorneys and other professionals who work or are interested in the area of regional centers. Anyone interested is encouraged to contact IIUSA directly for more information.

[Q] When do jobs have to be created for regional center project?

[Q] What is USCIS’ position on whether and when jobs have to be created for regional center projects at either the I-526 stage or the I-829 stage? What is USCIS’ specific legal basis for these positions?

USCIS Answer: We hope that we have answered this in the June 17 memo:

http://www.uscis.gov/files/nativedocuments/eb5_17jun09.pdf.

[Q] Can USCIS be more consistent in adjudicating EB-5 cases, especially with I-829 cases?

[Q] Practitioners are concerned that there is little certainty on which investors can rely in assessing job creation. After a regional center’s job creation methodology is accepted in deciding the regional center’s charter, RFEs on I-526s and I-829s question the same methodology and economist reports repeatedly. People are frustrated that they have to repeatedly prove the same methodology for indirect job creation. For example, a regional center’s economic model is accepted for I-526s for numerous projects and then it is questioned again in I-829s, long after it was accepted for other I-526s in the same project. Can Headquarters help with creating more consistency in adjudications?

USCIS Answer: We know that this is an issue. This was addressed in the June 17 memo: http://www.uscis.gov/files/nativedocuments/eb5_17jun09.pdf. At the I-829 stage the inquiry is limited to assessing milestones that were predicted at the I-526 stage of the process. Example: at the I-526 stage the plan was to build a shopping center and lease out the space.

[Q] Can USCIS take away or cancel the USCIS designation of a regional center where the RC remains inactive?

Yes, if a particular regional center no longer serves the purpose, and inactivity could be the reason for such action. However, no particular inactive period is used, and any decision will be made on a case-by-case basis.

[Q] What factors are considered in determining whether jobs will be created within a "reasonable time"?

[Q] What factors are considered in determining whether the necessary jobs will be created within a “reasonable time” in adjudicating an I-829 petition, per 8 C.F.R. § 216.6(a)(4)(iv)? Section 25.2(e)(4)(D) of the Adjudicator’s Field Manual lists some factors in making the reasonable time determination, but how do CSC adjudicators apply those factors in actual cases? For example, what if a regional center has an approved job creation methodology, proof that the investment has gone into the project, and has leased up the project but the tenants have not moved in when the I-829 is filed? What if the project is almost but not completely leased? Will USCIS approve an I-829 in such a case? If so, what documentation would be required?

USCIS' answer is as follows.

CSC adjudicators follow the guidance put forth in the Adjudicator’s Field Manual (AFM) at section 25.2(e)(4)(D), which states:

[HOT] [Q] Is a spending job-creation methodology permissible?

[Q] Based on the USCIS June 17, 2009 memo regarding EB-5 job creation, it is our understanding that USCIS has accepted the use of economic models that are based on infusion of capital into a particular industry. Please confirm that if such a model is used to calculate job projections at the I-526 stage, an investor would receive credit for job creation at the I-829 stage simply by establishing that he/she invested the requisite amount into the new commercial enterprise, and that the new commercial enterprise spent that capital, regardless of any data about actual job creation.

See USCIS' own answer on this issue. The answer is "yes", but such spending methodology should be detailed and not be based on a flimsy data or structure.

[Q] Can a project started as a regular, direct EB-5 project be turned into a regional center EB-5 project?

[Q] Where a new commercial enterprise such as a large mixed-use commercial real estate development wishes to file a regional center application after some EB-5 investors have already invested in the same project under the regular EB-5 program, please confirm that it is permissible for a regional center proposal to be submitted for the new commercial enterprise in this situation as long as the economic impact analysis report indicates that the number of direct jobs already allocated to EB-5 investors under the regular program are not “double-counted” for subsequent investors under the regional center program.

USCIS' answer?

Yes, as long as the jobs are not “double-counted.”