The rise in the Employment Based-5th category visa (“EB-5”)’s popularity has led to a corresponding rise in the number of Regional Centers, which are USCIS designations to businesses that pool EB-5 Investor funds for larger investments. Despite the number of Regional Centers, establishing a Regional Center can be notoriously difficult and requires an expert team, patience, and navigating vague and undeveloped areas of law.
When filing for a Regional Center via the USCIS Form I-924, the most frustrating part may be the adjudication time. The adjudication process alone may take 9 months, but anecdotally some people have been experiencing longer adjudication times. However, in the most recent Policy Memorandum issued in May of this year, USCIS has indicated faster adjudication times of the I-924 Regional Center application if based on a hypothetical project.
A hypothetical project is one of three types of projects an I-924 application can be premised upon. A hypothetical project-based I-924 is adjudicated faster because it is petitioning to USCIS only the type or kind of projects the Regional Center will engage into. The I-924 application only meets bare minimum for approval and does not meet the requirements for deference of the project used. Due to this, a hypothetical project-based Regional Center application will not get the added benefit of deference to the project details.
An actual or exemplar project are the two other kinds of projects a Regional Center application can be based on. An actual project includes an actual EB-5 Investor’s I-526 application. This obviously comes with the risk of the EB-5 Investor’s adjudication hinging on Regional Center approval as well as the investor’s own I-526 adjudication. Thus an exemplar project is more often used, which provides a “real” (as opposed to a hypothetical) project but does not come with a real I-526 petition. This allows for adjudication for the project-side of the I-526 application as well, thus allowing for deference to the project details for all subsequent I-526 applications. Preparing the documents for an exemplar-level I-924 petition could take months or years of work and thousands upon thousands of pages depending on the size and scope of the project. However, this in turn allows for faster adjudication times for the investors.
The types of projects that Regional Centers are based on vary widely, but most are construction projects of various types. Condominiums, distribution centers, hotels, and single family houses have been built with the use of EB-5 funding made through a Regional Center. However, it takes more than money and an idea. The developer of these construction projects has usually been developing the project for years before considering financing through an EB-5 Regional Center. USCIS also requires an economic report detailing the number of jobs that must be created through the EB-5 investment as well as a compliant business plan. Many corporate documents may also have to be drafted, including private placement memoranda, loan agreements, operating agreements, and others.
As we have reported before, ensuring that a Regional Center is established property and continues to operate properly is becoming critical. At least two Regional Centers have been prosecuted by the Securities and Exchange Commission for defrauding investors. This double pronged scrutiny by USCIS and the SEC helps protect foreign investors, but also highlights how Regional Center applicants need a team of immigration lawyers, securities attorneys, project experts, economics, and other professionals in order to ensure a smooth Regional Center adjudication and operation process.
If you are considering applying for a Regional Center, make sure to find an immigration attorney that is experienced in EB-5 and I-924 applications. Contact our office if you have questions today.