The most common factors underlying denials and requests for evidence following United States Citizenship and Immigration Services (USCIS) reviews of I-526 petitions are relatively easy to remedy if caught early enough during project planning. This article outlines four questions and the resulting strategies EB-5 regional centers and investors might use to proactively address potential issues with business plans and thereby preempt any concerns on the part of USCIS adjudicators.

1. Is the business plan comprehensive?

The package submitted with the I-526 petition must include a business plan structured along the guidelines provided in the Matter of Ho ruling. This plan must include a description of the business, an analysis of the target market and competition, financial data and projections, and an explanation of how the new commercial enterprise will create the required number of jobs per investor, among other information.

Some petitions may include a number of documents that together address the information required of a business plan, but they must additionally be collected and clearly labeled as such for easy review by USCIS adjudicators. Regional centers and investors can use the Matter of Ho ruling as a checklist against which to compare their business plans to ensure all relevant information is provided with the I-526 petition.

2. Does the proposed new commercial enterprise meet EB-5 requirements?

The business plan must outline how the proposed enterprise will fulfill the requirements of the EB-5 Program. Namely, it must demonstrate the following:

• In the regional center model, the entire EB-5 investment amount will be put toward job creation through the job-creating enterprise.
• The new commercial enterprise will create, either directly or indirectly according to economic model estimates, ten or more fulltime jobs per EB-5 investor.
• The jobs created must be new as a result of the EB-5 investment or must otherwise be accounted for according to program requirements, as in the case of a troubled business.
• The investment must be used and job creation must be anticipated to occur within the conditional residence period for the investor.

If the business plan is unable to illustrate through this information how the investment amount will be used to fulfil the job creation goal of the EB-5 Program, USCIS will undoubtedly issue a denial or request for evidence. Regional centers and investors must therefore carefully review the plan to ensure it addresses all requirements regarding the establishment of the new commercial enterprise, job creation, and the use of funds.

3. Does the business plan provide credible information and projections?

The business plan should use data effectively to support its financial and marketing projections. The plan must therefore provide adequate references and citations to credible external sources such as industry publications and market studies conducted by third parties. Requests for evidence often focus on a lack of verifiable information within the business plan, so regional centers and investors must ensure the plan contains any information USCIS adjudicators need to make a favorable determination.

The following strategies can prove helpful in this regard:

• Pinpoint the most important projections in the business plan and ensure these claims especially are well supported with credible evidence.
• Make note of any recurring details in the business plan, such as operation or construction start and end dates or financial estimates, for example, and ensure consistency on these points throughout the application package.
• Perform an online search on the project and its principals to address any discrepancies between published information and that provided in the business plan.
• Consider how the project might deviate from the plan, and consider adjusting schedules and financial projections accordingly. For example, a cushion should be built into the job creation estimate to account for contingencies.

Aside from the elements discussed above, presentation is key when submitting a business plan for USCIS evaluation. Adjudicators should be able to readily identify important information, and they are aided in doing so by a clean layout and effective labeling via a table of contents and section headings as necessary.

4. Has the business plan benefited from consultation with an expert?

Many problems resulting in a request for evidence can be avoided if a regional center or investor consults with an attorney experienced in creating EB-5 business plans. In this vein, the person or group of people tasked with putting together the business plan must combine their entrepreneurial passion for the new commercial enterprise itself with a detailed knowledge of the finer points of the EB-5 Program.

Consulting with an expert will allow the project to create a business plan that conveys the unique potential of the enterprise in question while also adhering to EB-5 requirements. The plan should outline the concept for the enterprise in detail such that USCIS adjudicators will understand how it will succeed in its target market, and it must demonstrate compliance with EB-5 requirements, as well, in that the enterprise must be new, jobs must be created according to the program timeline, and the investment must be at risk for the duration.

The plan should be compliant with not only the letter but the spirit of the Matter of Ho guidelines, with each section containing relevant and meaningful information collected with regard to the enterprise in question. Regional centers and investors should carefully vet their chosen attorneys to ensure they are knowledgeable about the enterprise and its industry as well as the EB-5 Program, as the business plan must thoroughly address both these elements.

Conclusion

The business plan is a crucial element of the success of the I-526 petition, which determines whether an investor will be granted conditional permanent residence and therefore proceed with the investment and immigration process. Because the ability of a project to move forward often hinges on the adjudication of this petition, regional centers and investors must approach business plans accounting for the needs of USCIS adjudicators and keeping in mind the factors which most often lead to denials and requests for evidence. Through careful planning using the strategies outlined above, investors can avoid these pitfalls.

Special thanks to LUCID EB-5 Blog.