Creating and Representing EB-5 Regional Centers - ALI CLE

54Creating and Representing EB-5 Regional Centers• It must be completely consistent with the business plan. The economic report will be premisedupon certain input projections, which must come from the business plan, such as expenditures,revenues, direct employees, square footage, occupancy rate, etc.• The immigration attorney must make certain that the economic report is “transparent.” In otherwords, it should be clear from reading the report how the economist extrapolated job projectionfrom the specific foundation facts.• The immigration attorney must be concerned with a projected timeline for job creation. USCISpolicy is that the requisite employment must be created within two and half years of EB-5 petitionapproval.• The immigration attorney should be concerned with overly aggressive “inputs.” If the aggressiveestimates are not met, some or all of the investors may not be able to get their conditions removed(see below).• The immigration attorney must make certain that the economist understands the differencebetween a “direct” job as defined by USCIS and what an economist normally considers to be adirect job. An economist may consider an employee of the construction company or of theconstruction project or target business to be a direct employee. However, the USCIS definition ofemployee is a W-2 employee of the “new commercial enterprise” in which the investor actuallyinvests 8 . Often, this enterprise is different than the job-creating enterprise.In reviewing the EB-5 business plan, the immigration attorney should be concerned with whether the planis credible and whether it is consistent with the economic report. The timelines specified in the businessplan are critical. Often, the immigration attorney will advocate for a business plan that is not too specificin order to avoid the possibility that the specifics of the business plan are not adhered to, which can raiseissues of “material change” at the condition removal stage (see below).The geographic scope of the regional center often involves several considerations. If the scope is toolarge, it may be difficult to get the regional center designation approved, as USCIS may consider the areanot to be a definable “region.” If it is too small, there may be a need to amend the regional centerdesignation if a future project falls outside of the initially designated area. The economist can assist indetermining the largest possible area that can be justified as an economically interdependent region. Inthis regard, it is important to understand that there is no exclusive jurisdiction for regional centers.In most cases, there are three different entities involved in the regional center creation process:• The regional center itself is an administrative entity that applies to USCIS for certification. It hasongoing administrative and compliance responsibilities, markets for investors, performs duediligence regarding the investor’s source of funds and oversees the preparation of the investors’EB-5 petitions. The regional center entity also obtains signed Subscription Agreements andEscrow Agreements; monitors employment creation; tracks infusion of capital into the jobcreatingenterprises; monitors compliance with the business plan and the foundation facts onwhich the economic report is based; allocates jobs between investors; prepares an annual8 8 CFR § 204.6(e).Klasko, Rulon, Stock & Seltzer, LLP Page 5 of 8