In a December 3, 2010 letter to Senator Patrick Leahy, U.S. Citizenship and Immigration Services (USCIS) Director, Alejandro Mayorkas, stated that indirect jobs created by individual investors in an EB-5 regional center may in fact be created outside the geographical boundaries of the certified regional center. The letter sets out USCIS’s interpretation from earlier case law that the job-creating businesses themselves must be located within the regional center’s geographic limits, and that recent amendments to the EB-5 program require that “each regional center …provide a proposal that ‘clearly describes how the regional center focuses on a geographic region of the United States.'” USCIS interprets this to mean that the regional center must focus its “EB-5 capital investment activities on a single, contiguous area within the defined geographic jurisdiction requested by the regional center.” Director Mayorkas concludes that “we agree that the law does not further mandate that all indirect job creation attributable to a regional center take place within that jurisdiction.”
The business plan for the EB-5 regional center seeking initial approval or certification is critical, however. It lays the road map for how the center plans to proceed including the economic analysis to determine how the new jobs will be created. USCIS will adjudicate EB-5 regional center applications, amendments and annual reports as well as individual investor applications on the basis of that business plan. Therefore, it is essential that if the economic model being used anticipates job creation outside the geographic limits of the regional center, that this be reflected in the business plan for the center.
Two recent changes effective November 23, 2010 concerning regional centers include the release of a new form I-924 used for regional center designation applications. A new form I-924A was also introduced for annual reporting of the regional center activities. This form has to be filed annually between October 1 and December 29. There is also a new filing fee of $6230.00 for initial regional center applications. The I-924 should also be used for amendments to 1) the geographic region, 2) the business plan, 3) organizational structure, 4) affiliated entities, 5) changes in the economic analysis to predict job creation, 6) or changes to capital investment instruments or offering memoranda. When providing an exemplar of future individual EB-5 I-526 applications, the I-924 should also be submitted.
EB-5 regional centers typically attract a pool of foreign investors who may invest in one or more businesses within the designated regional centers. Depending upon where the regional center is located, the individual foreign investors must invest $500,000 or $1,000,000 in capital, and each individual investor must create at least 10 new full-time jobs. One benefit of the EB-5 regional center concept is the ability to create the new jobs indirectly within or now outside the regional center based on an economic model predicting how and when the jobs will be created during the foreign investor’s initial two-year period of conditional permanent residence in the U.S. Within 90 days of the two-year conditional residence period expiring, the investor must show the full amount of capital was invested and the required jobs were created.
A list of currently approved EB-5 regional centers around the country can be found on the USCIS website. Also posted on the USCIS website is the powerpoint from the December 16, 2010 EB-5 stakeholder meeting.