In response to changing economic needs and securities regulations over the years, various trends have emerged in the adjudication of EB-5 visa petitions as United States Citizenship and Immigration Services (USCIS) focuses on new areas of concern within the program. As the I-526 petition is a crucial determiner of whether investors successfully navigate program requirements and are granted conditional permanent residence, industry professionals must make note of recent adjudication decisions and adapt their strategies accordingly.
This article discusses trends in the issuance of requests for evidence (RFEs) and notices of intent to deny (NOIDs) and examines the criteria USCIS has recently used to evaluate and adjudicate I-526 petitions.
What are RFEs and NOIDs?
As part of the I-526 petition, the investor must provide USCIS with sufficient documentation to illustrate that the new commercial enterprise will create the ten fulltime jobs required under the EB-5 Program and how the invested amount will be allocated for job creation. The supporting evidence generally includes a comprehensive business plan, proof of fund sources via relevant bank and financial documents, and a timeline for job creation.
If USCIS uncovers issues with any of this material, the adjudicator will issue an RFE or a NOID:
- An RFE signifies that the submitted documents lack sufficient detail to prove that a project will fulfill the requirements of the EB-5 Program. This is meant to provide the investor the opportunity to clarify outstanding issues and provide further evidence if necessary, and RFEs can therefore provide valuable insight into potential issues with EB-5 projects.
- Whereas an RFE is issued when the adjudicator believes he or she requires more evidence before making a decision, a NOID signifies that the adjudicator strongly believes the petition will be denied. Investors also have the opportunity to respond to a NOID, and any further material is likewise taken into consideration before a final decision is issued.
Neither an RFE nor a NOID spells certain denial of a petition, but an investor must ensure he or she clarifies any issues in as much detail as necessary to satisfy USCIS that the project will be economically feasible and will satisfy the requirements of the EB-5 Program.
Investors can lessen the likelihood of receiving either of these notices by working with an experienced team of advisors. Generally, regional centers facilitate a high volume of I-526 petitions and are therefore able to approach each petition with a wealth of background knowledge about program requirements as well as recent adjudication trends as they relate to the project at hand.
Recent Focuses of RFEs and NOIDs
The most common factor underlying the issuance of RFEs and NOIDs is inconsistency or lack of detail regarding the major aspects of a project. This may result from changes to the scope of the project, the job creation timeline, or the source of funds while the project documents are being prepared. As such, project teams must be apprised of any changes and ensure those changes translate accurately to the project materials.
Aside from this, adjudicators may focus on more substantive details of the I-526 petition. Below is an outline of recent trends in the reasons for RFEs and NOIDs:
- Lack of credible data. USCIS expects that the feasibility of a project will be supported with relevant industry and economic data provided by third parties, not simply by the managers of the project. To avoid this issue, some projects have commissioned feasibility studies and provided historical and geographic industry data to support their business plans.
- Uncompetitive marketing plans. When adjudicating an I-526 petition, USCIS will judge, based on the information provided, whether the business can realistically compete in its target market and sustain itself long enough to provide meaningful job creation in the United States. In certain cases, if a business fails before its investor has the opportunity to file his or her I-829 petition, the jobs created by that business can no longer be counted, and the investor risks losing his or her visa. The I-526 petition should therefore include a comprehensive marketing strategy and a SWOT analysis of competing businesses.
- Unclear source of investment funds. US law requires that investors be able to trace the path of funds from a legal source. This may require investors to produce supporting documents such as employment records and transaction statements, all of which USCIS reviews as part of the adjudication process. If the source or path of the investment funds is unclear, USCIS will request further detail.
- Invalid or unrealistic job creation strategies. Recent RFEs have focused on whether tenant jobs should be counted toward the job creation total. In a commercial real estate development, for example, can jobs created by tenant businesses be counted for EB-5 purposes? An additional concern has been discrepancies between job creation totals and the cost of a project, such as in cases where the investment amount for a project would not realistically support its job creation plans.
- Incorrect financial projections. Investors should ensure that an economist experienced with the EB-5 Program and its requirements reviews the I-526 petition package to verify all calculations. The feasibility of the business and its job creation potential must be supported with accepted economic models, and cost projections should be based on relevant current data. Again, this data should be provided by third parties, not by stakeholders within the project itself.
While USCIS has not provided explicit guidelines on the types of data projects should use, an experienced regional center can assist investors in preparing comprehensive I-526 petitions based on established industry standards and sound economic models. The petition should clearly illustrate how the new commercial enterprise will fulfill the goals of the EB-5 Program, and the document should be reviewed thoroughly for internal consistency. An understanding of the potential concerns of USCIS adjudicators outlined above allows investors to avoid the most common recent reasons for RFEs and NOIDs and successfully navigate the I-526 petition process.