June 29, 2010 by H. Ronald Klasko
The USCIS Quarterly EB-5 Stakeholders Meeting took place on June 16, 2010. Most of the meeting was a review of USCIS policies and procedures on EB-5s.
Two new interpretations were revealed – one relating to targeted employment area investments and one relating to troubled businesses. Both are controversial.
USCIS opined that both the new commercial enterprise and the capital investment project (or job-creating enterprise) must be principally doing business in a targeted employment area in order to qualify for the reduced capital investment. This came as a surprise to many stakeholders who had believed that only the job creating enterprise must be in a TEA.
USCIS also opined that all of a troubled business’ jobs must be saved in order for any investor to qualify for condition removal. In other words, if a company has 100 jobs, and the investments of 9 investors saved 90 jobs, none of the 9 investors would get their conditions removed since all 100 jobs were not saved. Again, this interpretation came as a surprise to most EB-5 representatives.
USCIS did little to clarify what constitutes a “material change” that requires the filing of a new I-526 petition. USCIS stated: “When the evidence demonstrating compliance with the capital investment and/or job creation requirements is significantly different than what was proposed in the Form I-526 petition”, the change is material. This apparently means that even if the capital investment was sustained and the requisite jobs have been created, a new I-526 petition is required despite all of the job creation having occurred if the business plan changed from what had been envisioned when the EB-5 petition was filed. Again, this position of USCIS is subject to challenge.