Chapter 5 - Project Applications
A designated regional center files an Application for Approval of an Investment in a Commercial Enterprise (Form I-956F) (project application) to request approval for each particular investment offering through an associated new commercial enterprise. A regional center must file Form I-956F with USCIS before any investor may file an Immigrant Petition by Regional Center Investor (Form I-526E) based on their investment in that offering.[1]
Approval of Form I-956F, and in some cases, the former Application for Regional Center Designation Under the Immigrant Investor Program (Form I-924) exemplar approved before enactment of the EB-5 Reform and Integrity Act of 2022, is generally binding for the adjudication of associated petitions.[2]
A. Eligibility
1. New Commercial Enterprise and Job Creating Entity
A project application describes a particular pooled investment offering through a new commercial enterprise[3] that generally funds a specific capital investment project undertaken by a separate job-creating entity or directly by the new commercial enterprise.
A new commercial enterprise is any for-profit organization formed in the United States for the ongoing conduct of lawful business, including sole proprietorship, partnership (whether limited or general), holding company and its wholly owned subsidiaries (provided that each subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business), joint venture, corporation, business trust, limited liability company, or other entity (which may be publicly or privately owned) that receives, or is established to receive, capital investment from immigrant investors.[4]
A job-creating entity is any organization formed in the United States for the ongoing conduct of lawful business, including sole proprietorship, partnership (whether limited or general), corporation, limited liability company, business trust, or other entity, which may be publicly or privately owned that receives, or is established to receive, capital investment from immigrant investors or a new commercial enterprise under the Regional Center Program and which is responsible for creating jobs. A job-creating entity may be an entity consisting of a holding company and its wholly owned subsidiaries or affiliates (provided that each subsidiary or affiliate is engaged in an activity formed for the ongoing conduct of a lawful business).[5]
Where a job-creating entity is controlled, managed, or owned by any of the persons involved with the regional center or new commercial enterprise, it is considered an affiliated job-creating entity.[6]
2. Targeted Employment Area
Regional center investors may take advantage of the reduced required investment amount[7] when investing in an offering into a new commercial enterprise principally doing business[8] in a targeted employment area (TEA).[9] A TEA is a rural area or a high unemployment area.[10] A rural area is any area other than an area:
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Within a standard metropolitan statistical area (MSA) (as designated by the Office of Management and Budget); or
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Within the outer boundary of any city or town having a population of 20,000 or more based on the most recent decennial census of the United States.[11]
For petitions filed on or after March 15, 2022, a high unemployment area is an area designated as such by the Secretary of Homeland Security.[12]
3. Infrastructure Project
Similar to investment in a TEA, regional center investors filing petitions on or after May 14, 2022, may take advantage of the reduced required investment amount[13] when investing in an offering into a new commercial enterprise that will provide capital to an infrastructure project.[14] An infrastructure project is a capital investment project in a filed or approved business plan in a Form I-956F project application, which is administered by a governmental entity (such as a federal, state, or local agency or authority) that is the job-creating entity contracting with a regional center or new commercial enterprise to receive capital investment under the Regional Center Program from investors or the new commercial enterprise for purposes of financing for maintaining, improving, or constructing a public works project.[15]
4. Job Creation
For regional center investors filing petitions for classification on or after May 14, 2022, up to 90 percent of the employment creation requirement may be satisfied with jobs that are estimated to be created indirectly through investment in a regional center project.[16] USCIS may consider an employee of the new commercial enterprise or job-creating entity to hold a job that has been directly created.[17] A project application may rely on economically and statistically valid methodologies for determining the number of jobs created by the program, including:
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Jobs estimated to have been created directly, which may be verified using such methodologies; and
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Jobs estimated to have been directly or indirectly created through capital expenditures, revenues generated from increased exports, improved regional productivity, job creation, and increased domestic capital investment resulting from the program.[18]
Construction Activity Lasting Less than 2 Years
When calculating job creation, the following limitations on construction activity lasting less than 2 years apply:
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For indirect job creation purposes, those jobs may satisfy only up to 75 percent of the job creation requirement.[19]
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For direct job creation purposes, the number of such jobs must be calculated by multiplying the total number of such jobs estimated to be created by the fraction of the 2-year period that the construction activity lasts.[20]
Prospective Tenant Jobs
In determining compliance with the job creation requirement, a project application may include jobs estimated to be created under a methodology that attributes jobs to prospective tenants occupying commercial real estate created or improved by capital investments if:
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The number of such jobs estimated to be created has been determined by an economically and statistically valid methodology; and
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Such jobs are not existing jobs that have been relocated.[21]
B. Documentation and Evidence
1. New Commercial Enterprise
The applicant should provide a description and documentation of the business structure of the new commercial enterprise (NCE) that will be associated with the regional center, such as articles or certificates of formation, bylaws, partnership or LLC agreements, or other formation and governing documents for the NCE.[22]
2. Comprehensive Business Plan
A project application must include a credible and comprehensive business plan that contains, at a minimum, a description of the business, its products or services (or both), and its objectives.[23] The plan should also identify the form of the investment (for example, equity stake, loan, or some other financial arrangement) from the NCE into the job-creating entity (JCE), if any.
3. Economic Analysis
An applicant must submit a credible economic analysis regarding estimated job creation that is based upon economically and statistically valid and transparent methodologies.[24]
4. Investment and Offering Documents
An applicant must submit all investment and offering documents, including:
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Subscription agreements;
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Investment agreements;
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Partnership agreements;
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Operating agreements;
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Private placement memoranda;
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Term sheets;
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Biographies of management, officers, directors, and any person with similar responsibilities;
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The description of the business plan to be provided to potential investors; and
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Marketing materials used, or drafts prepared for use, in connection with the offering.
These documents must also contain references, as appropriate, to various statutorily required information.[25]
5. Securities-Related Documentation and Certifications
An applicant must include a description of the policies and procedures, such as those related to internal and external due diligence, reasonably designed to cause the regional center and any associated issuer of securities intended to be offered to investors, to comply with the securities laws of the United States and the applicable states in connection with the offer, purchase, or sale of securities.[26]
The applicant must also provide a certification from the regional center, as well as from any issuer of securities intended to be offered to investors in connection with the relevant capital investment project, regarding their securities law compliance.[27] The certifier must certify, to the best of their knowledge and after a due diligence investigation, that their respective agents and employees, and any parties associated with them are in compliance with the securities laws of the United States and the laws of the applicable states in connection with the offer, purchase, or sale of securities described in the project application.[28]
6. High Unemployment Area Designation
A high unemployment area is an area designated as such by USCIS that is comprised of the census tract or tracts in which the new commercial enterprise is principally doing business, which may also include certain adjacent census tract or tracts, and in which the weighted average unemployment rate of the tract or tracts is at least 150 percent of the national average rate.[29]
To demonstrate that the project is based on an investment in a high unemployment area, if applicable, an applicant must submit a listing of the census tract (or contiguous census tracts) where the new commercial enterprise will be principally doing business, as well as any directly adjacent census tracts used in the calculation to demonstrate that the area is a high unemployment area.[30]
The calculation should use reliable, internally consistent, and verifiable data to calculate the unemployment rate. For example, if the regional center uses data from the U.S. Census Bureau’s American Community Survey (ACS) to determine the unemployment rate for the requested area, the applicant should also rely on ACS data to determine the national unemployment rate to which the area identified is compared.[31]
A designation will be in effect for the 2-year period beginning on the date on which the Form I-956F project application was filed.[32] The designation may be renewed for additional 2-year periods if the area continues to meet applicable criteria for designation as a high unemployment area.[33]
7. Rural Area
To demonstrate that a project is based on an investment in a rural area, if applicable, an applicant should provide evidence, such as a map or other representation of the project area, to demonstrate that the new commercial enterprise is principally doing business in a rural area.[34]
8. Infrastructure Project Designation
To demonstrate that a project is an infrastructure project, if applicable, an applicant should provide evidence, such as the contract between the regional center or new commercial enterprise and the JCE, to demonstrate that the JCE is administered by a governmental entity (such as a federal, state, or local agency or authority) and will receive capital investment from investors or the new commercial enterprise for the purpose of financing for maintaining, improving, or constructing a public works project.[35]
C. Adjudication
1. Approval
If the applicant properly filed the application and the applicant has met the required eligibility standards, the officer approves the application.
Approval of Form I-956F is binding for the adjudication of associated petitions seeking classification or removal of conditions based on investments in the same offering, absent:
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Fraud, misrepresentation, or criminal misuse;
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A threat to public safety or national security;
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A material change that affects eligibility;
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The discovery of other evidence affecting program eligibility that was not disclosed during the adjudication process; or
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A material mistake of law or fact.[36]
The approval of an initial or amendment Form I-924 based on an exemplar[37] Immigrant Petition by Standalone Investor (Form I-526) filed before enactment of the EB-5 Reform and Integrity Act of 2022[38] is also binding absent the above circumstances.
However, if a regional center seeks new investors who will file for classification under the new provisions added by the EB-5 Reform and Integrity Act of 2022 through an offering described in a previously approved Form I-924 exemplar, the regional center must file a Form I-956F to show compliance with the new statutory requirements. All aspects of the previously approved Form I-924 exemplar will remain binding for purposes of the related Form I-956F adjudication except to the extent superseded by new requirements added by the EB-5 Reform and Integrity Act of 2022.
A change made to a business plan, or any other aspect of the approved Form I-924 exemplar, to comply with the EB-5 Reform and Integrity Act of 2022, will not be considered a material change.[39]
2. Denial
If the applicant has not established eligibility for the benefit sought, the officer denies the application. The officer should write the denial in clear and comprehensive language and cover all grounds for denial.[40] In the denial, the officer should refer to the controlling statute or regulations and to any relevant precedent or adopted decisions. The decision must include information about the applicant’s right to appeal to the Administrative Appeals Office and the opportunity to file a motion to reopen or reconsider.
USCIS may deny an application if USCIS determines, in its discretion, that it was predicated on or involved fraud, deceit, intentional material misrepresentation, or criminal misuse[41] or that the approval of such application is contrary to the national interest of the United States for reasons relating to threats to public safety or national security.[42]
D. Amendments
A regional center should file an amendment to an approved project application that reflects changes to any information, documents, or other aspects of the investment offering described in such approved application no later than 30 days after any such changes.[43]
Upon the approval of a timely filed amendment to an approved application, any changes reflected in such amendment may be incorporated into and considered in determining eligibility of:
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Pending petitions from immigrants investing in the offering described in the approved application who are seeking classification under the Regional Center Program; and
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Petitions to remove conditions on residence.[44]
E. Revocations and Sanctions
USCIS may revoke the approval of an application if it determines, in its discretion, that the application was predicated on or involved fraud, deceit, intentional material misrepresentation, or criminal misuse[45] or that the approval of such application is contrary to the national interest of the United States for reasons relating to threats to public safety or national security.[46]
USCIS may temporarily or permanently suspend or debar a new commercial enterprise or job-creating entity, or any individual or business entity associated with those entities, for specified statutory violations, such as knowingly involving a person who does not meet the statutory bona fides requirements by failing to take commercially reasonable efforts to discontinue the prohibited person’s involvement or provide notice to USCIS within 14 days of acquiring such knowledge.[47]
Footnotes
[^ 1] See INA 203(b)(5)(F)(i).
[^ 2] For more information on the binding nature of project applications, see Section C, Adjudication, Subsection 1, Approval [6 USCIS-PM G.5(C)(1)].
[^ 3] For more information on new commercial enterprises, see Chapter 2, Immigrant Petition Eligibility Requirements, Section C, New Commercial Enterprise [6 USCIS-PM G.2(C)].
[^ 4] See INA 203(b)(5)(D)(vi).
[^ 5] See INA 203(b)(5)(D)(v).
[^ 6] See INA 203(b)(5)(D)(i).
[^ 7] For more information on the required investment amounts, see Chapter 2, Immigrant Petition Eligibility Requirements, Section A, Investment of Capital, Subsection 3, Required Amount of Investment [6 USCIS-PM G.2(A)(3)].
[^ 8] For more information on what is considered principally doing business, see Chapter 2, Immigrant Petition Eligibility Requirements, Section A, Investment of Capital, Subsection 5, Targeted Employment Area [6 USCIS-PM G.2(A)(5)].
[^ 9] See INA 203(b)(5)(C).
[^ 10] See INA 203(b)(5)(D)(viii). For more information on TEAs as they existed before March 15, 2022, see Chapter 2, Immigrant Petition Eligibility Requirements, Section A, Investment of Capital, Subsection 5, Targeted Employment Area [6 USCIS-PM G.2(A)(5)].
[^ 11] See 8 CFR 204.6(e) (PDF). See INA 203(b)(5)(D)(vii).
[^ 12] See INA 203(b)(5)(B)(ii). For more information on the evidence required to demonstrate that an area qualifies as a high unemployment area, see Section B, Documentation and Evidence, Subsection 6, High Unemployment Area Designation [6 USCIS-PM G.5(B)(6)].
[^ 13] For more information on the required investment amounts, see Chapter 2, Immigrant Petition Eligibility Requirements, Section A, Investment of Capital, Subsection 3, Required Amount of Investment [6 USCIS-PM G.2(A)(3)].
[^ 14] See INA 203(b)(5)(C).
[^ 15] See INA 203(b)(5)(D)(iv).
[^ 16] See INA 203(b)(5)(E)(iv)(I).
[^ 17] See INA 203(b)(5)(E)(iv)(I).
[^ 18] See INA 203(b)(5)(E)(v)(I).
[^ 19] See INA 203(b)(5)(E)(iv)(II).
[^ 20] See INA 203(b)(5)(E)(v)(II)(cc).
[^ 21] See INA 203(b)(5)(E)(v)(II)(aa).
[^ 22] See the instructions for Form I-956F.
[^ 23] For more information on comprehensive business plans, see Chapter 2, Immigrant Petition Eligibility Requirements, Section B, Comprehensive Business Plan [6 USCIS-PM G.2(B)].
[^ 24] See INA 203(b)(5)(F)(i)(II).
[^ 25] See INA 203(b)(5)(F)(i)(IV).
[^ 26] See INA 203(b)(5)(F)(V).
[^ 27] See INA 203(b)(5)(F)(i)(VI).
[^ 28] See INA 203(b)(5)(F)(i)(VI).
[^ 29] See INA 203(b)(5)(B)(ii)(I).
[^ 30] See INA 203(b)(5)(B)(ii). For more information on suggested evidence that may meet the statutory definition, see the instructions for Form I-956F.
[^ 31] For more information on suggested evidence that may meet the statutory definition, see the instructions for Form I-956F.
[^ 32] See INA 203(b)(5)(A)(ii)(IV)(aa).
[^ 33] See INA 203(b)(5)(A)(ii)(IV)(bb).
[^ 34] For the definition of rural, see Section A, Eligibility, Subsection 2, Targeted Employment Area [6 USCIS-PM G.5(A)(2)].
[^ 35] See INA 203(b)(5)(D)(iv).
[^ 36] See INA 203(b)(5)(F)(ii). See the September 1, 2022, settlement approved by the U.S. District Court for the Northern District of California in Behring Regional Center LLC and IIUSA v. Mayorkas, et al., 3:22-cv-02487-VC (N.D. Cal. Aug. 24, 2022), and EB5 Capital, et al., v. Dept. of Homeland Security, et al., 3:22-cv-3948-VC (N.D. Cal. Aug. 24, 2022).
[^ 37] The term exemplar referred to a sample Immigrant Petition by Alien Investor (Form I-526) filed with Form I-924 for an actual project. Before March 15, 2022, this type of regional center proposal contained copies of the commercial enterprise’s organizational and transactional documents, which USCIS reviewed to determine if they were in compliance with applicable eligibility requirements.
[^ 38] See the EB-5 Reform and Integrity Act of 2022, Division BB of the Consolidated Appropriations Act of 2022, Pub. L. 117-103 (PDF), 136 Stat. 49, 1070 (March 15, 2022).
[^ 39] See the September 1, 2022, settlement approved by the U.S. District Court for the Northern District of California in Behring Regional Center LLC and IIUSA v. Mayorkas, et al., 3:22-cv-02487-VC (N.D. Cal. Aug. 24, 2022), and EB5 Capital, et al., v. Dept. of Homeland Security, et al., 3:22-cv-3948-VC (N.D. Cal. Aug. 24, 2022).
[^ 40] See 8 CFR 103.3(a)(1)(i).
[^ 41] See INA 203(b)(5)(O)(i).
[^ 42] See INA 203(b)(5)(N)(i).
[^ 43] See INA 203(b)(5)(F)(iii)(I).
[^ 44] See INA 203(b)(5)(F)(iii)(II).
[^ 45] See INA 203(b)(5)(O)(i).