All EB-5 I-526 and I-924 petitions must include an EB-5 business plan, among other information and evidence, to demonstrate to United States Citizenship and Immigration Services (USCIS) that the project meets the EB-5 visa program’s requirements for job creation, capital investment, and new commercial enterprises. The purpose of an EB5 business plan is to allow USCIS to draw reasonable inferences about the future of the project and its suitability to the EB-5 program. To this end, business plans must be highly detailed, comprehensive, and, most importantly, credible. EB-5 investors should aim to make their business plans well-organized and clear to ensure the enclosed information is conveyed as easily and clearly as possible.
Types of EB-5 Business Plans
Hypothetical Business Plans
Hypothetical EB-5 business plans are a special type of business plan that only applies to regional centers submitting an I-924 petition. Hypothetical projects are outlined and described in the I-924 petition but are not accompanied by a comprehensive business plan that adheres to the Matter of Ho guidelines (outlined below). Even if a project has sought licenses and completed other forms of concrete planning, it remains hypothetical until USCIS receives a comprehensive business plan for it. Hypothetical business plans offer a general outline of how the project will promote economic growth and job creation and meet the EB-5 requirements, but they do not offer enough details to deem the project ready for implementation.
Actual Business Plans
Actual EB-5 business plans are, like their name implies, likely what most people envision when they imagine an EB5 business plan. These business plans are filed with I-924 and I-526 petitions alike and provide a comprehensive and detailed overview of all aspects of the project and how it satisfies the requirements of the EB-5 visa program. An actual EB-5 business plan presents credible data in the form of economic projections, market data, and financial analyses to prove the feasibility of the project and its expected job creation potential. If an I-924 with an actual business plan is approved, the regional center that submitted it will receive a designation letter for a regional center status.
Whether regional centers opt to include a hypothetical business plan or an actual business plan, their representatives must bear in mind that all I-924 petitions must be accompanied by a comprehensive business plan for the regional center itself.
Exemplar Business Plans
If a regional center submits a sample I-526 petition along with its I-924 petition with an actual EB-5 business plan, it is submitting an exemplar business plan. After approving an exemplar business plan, USCIS does not need to review the business plan for subsequent I-526 petitions as long as it has not changed, which can dramatically reduce adjudication wait times for investors.
Matter of Ho
One of the key requirements of an EB5 business plan is that it adheres to the 1998 Matter of Ho ruling. In essence, to be compliant with Matter of Ho, an EB-5 business plan must demonstrate that the project promotes economic growth and job creation to a degree sufficient to warrant the issuance of an EB-5 visa to the investor(s). Matter of Ho requires EB5 business plans to be comprehensive, detailed, and credible in all aspects.
EB-5 business plans should span 40 to 50 pages and feature colored charts and graphs to visualize the information provided whenever such visualization is helpful. They should aim to convey the required information as clearly as possible.
To start off an EB-5 business plan, provide a description of the project so that USCIS can understand the business concept and business model. The description should be detailed and provide the following:
- which industry the business is in
- the operations, personnel, and purpose of the business
- the business’s mission
- the business’s history or that of its owners
- future plans for the business
- other pertinent information to give USCIS an accurate overview of the project
EB5 business plans must also specify the type of business that the project is or will be registered as. The only requirement per se is that the business is a for-profit new commercial enterprise engaged in ongoing lawful business activity. The most common business types of EB-5 projects are limited partnerships, corporations, and limited liability companies, but sole proprietorships, joint ventures, business trusts, and other business types are equally viable.
Depending on the products or services the new commercial enterprise offers, the project may need to apply for various federal, state, or local licenses or permits. Projects must demonstrate in their EB5 business plan that they have dutifully obtained all necessary licenses and permits to lawfully operate the business.
Marketing Plan and Budget
Including a marketing plan in an EB-5 business plan is necessary to allow USCIS to evaluate the project’s potential for success. A marketing plan is necessary for any business to attract its target demographic, so any business without a sound marketing plan is setting itself up for failure. EB5 business plans should also indicate the project’s marketing budget so USCIS can assess the feasibility of the plan.
It is important to note that EB-5 business plans must include a marketing plan not only for the end-users of the product or service but also for prospective investors in the project.
Experience of Personnel
No business can succeed without skilled personnel. Thus, EB-5 business plans should include detailed information on the project’s key personnel and their experience, as well as the business’s organizational structure, management philosophy, and backgrounds and functions of the management. Here, USCIS wants to see that the management and personnel of the organization have what it takes to drive the project to success.
To demonstrate the competitiveness of the new commercial enterprise, EB5 business plans should include a comprehensive competition analysis that reveals competitors’ market penetration, products and services, prices, and other relevant factors. The project’s strengths and weaknesses compared to the competition must be clearly indicated to show USCIS the challenges the business may face as well as the competitive advantages it may enjoy.
In order to receive their U.S. green card, investors’ EB-5 capital must fund the creation of at least 10 new full-time jobs for U.S. citizens or residents. An EB-5 business plan should include clear, accurate, detailed descriptions of the jobs the enterprise will create and show how they relate to or will benefit the operations of the business.
One of the most important things to demonstrate in an EB5 business plan is how the project will create the 10 necessary jobs to warrant an EB-5 visa. Every EB-5 business plan should include a comprehensive timetable of planned hires, including what positions will be filled when. The best EB-5 business plans will complement this information with an easy-to-understand graph.
Five-Year Financial Projections
Naturally, USCIS will only approve EB-5 projects that are financially feasible, so all EB5 business plans must provide credible financial projections forecasting reasonably strong performance over the proceeding five years. Projections should consider sales, income, costs, employee salaries, and any other relevant financial factor. EB-5 business plans must also include the source of funds to support and maintain the enterprise as well as details regarding the use of EB-5 investors’ funds in the project. Credibility is key here—financial projections must adopt generally accepted accounting standards. Having an unaffiliated third party draft these financial projections is recommended.