FEBRUARY 2011
- USCIS Holds Quarterly Stakeholders Meeting – As part of a quarterly EB-5 stakeholders call, USCIS released statistics on usage of the EB-5 program for FY 2010 and other information.
- USCIS Confirms Indirect Job Creation Can Occur Outside Regional Center Boundaries – USCIS recently agreed to count jobs indirectly created outside the geographical boundaries of an EB-5 Regional Center (RC) in determining whether the RC’s business plan complies with EB-5 regulations.
- USCIS Seeks Comment on EB-5 Policy Memo – USCIS Seeks Comment on EB-5 Policy Memo.
- USCIS Acknowledges Problems with Online Case Tracking – USCIS’s Customer Service Directorate acknowledged the problems and promised to update CRIS to correct them.
- New Publications and Items of Interest
- Klasko News – New appointments, upcoming and recent EB-5 speaking engagements and publications.
- EB-5 Government Agency Links – Upcoming and recent speaking engagements and recent publications.
1. USCIS Holds Quarterly EB-5 Stakeholders Meeting
On December 16, 2010, the U.S. Citizenship and Immigration Services (USCIS) Service Center Operations (SCOPS) Directorate and the Office of Public Engagement (OPE) hosted the EB-5 Investor Quarterly Engagement. The agenda and relevant information are available by clicking here.
EB-5 statistics for FY 2010. As part of the Quarterly Engagement, USCIS released statistics on usage of the EB-5 program for fiscal year (FY) 2010. Among the highlights:
- The number of approved Regional Centers has reached 120 spread across 35 states, the District of Columbia, and Guam. A complete list is posted at http://www.uscis.gov/eb-5centers.
- Approximately 90 percent of all EB-5 investors have invested in a Regional Center (RC).
- USCIS received 110 initial RC proposal filings in FY 2010. Of that total, 36 were approved and 30 were denied. USCIS also received 42 amended RC proposal filings, of which 27 were approved and 11 were denied.
- The number of Form I-526s (Immigrant Petition by Alien Entrepreneur) and Form I-829s (Petition by Entrepreneur to Remove Conditions) filed with USCIS increased significantly from the previous fiscal year. The number of I-526 petitions increased roughly 90 percent to 1,955 in the 2010 fiscal year, compared to 1,028 in FY 2009. Likewise, the number of I-829 petitions was up roughly 75 percent, from 437 in FY 2009 to 768 in FY 2010.
- The approval rate for initial I-526 petitions continued to increase. Of the I-526 petitions that received final action in FY 2010, USCIS approved 1,369 (89 percent) and denied 165. By contrast, in FY 2009 USCIS approved 86 percent of the I-526 petitions that received final action (1,262) and denied 207. In the prior four fiscal years, both the total rate and number of approvals gradually increased from 53 percent in FY 2005 (179 approvals and 156 denials), to 73 percent in FY 2006 (336 approvals and 124 denials), to 76 percent in FY 2007 (473 approvals and 148 denials), to 84 percent in FY 2008 (640 approvals and 120 denials).
- The approval rate for I-829s, however, declined to 83 percent of petitions that received final action in FY 2010, with 274 approved and 56 denied. By comparison, 86 percent of I-829 petitions were approved in FY 2009 (347 approvals and 56 denials). Until FY 2010 the approval rate for I-829s had steadily risen from 62 percent in FY 2005 (184 approvals and 112 denials) to 64 percent in FY 2006 (106 approvals and 59 denials) to 69 percent in FY 2007 (111 approvals and 49 denials) to 70 percent in FY 2008 (159 approvals and 68 denials).
- The number of EB-5 visas issued in FY 2010 declined roughly 55 percent from the previous fiscal year, going from 4,218 visas issued in FY 2009 to 1,885 visas issued in FY 2010. Of those EB-5 visas issued in FY 2010, a total of 772 (41 percent) were issued to nationals from the People’s Republic of China. Other countries accounting for the most EB-5 visas issued in FY 2010 were South Korea with 16 percent (295), the U.K. with 7 percent (135), Taiwan with 5 percent (94), and India with 3 percent (62). The remaining 527 EB-5 visas (a total of 527) were issued to nationals of all other countries.
Processing times. USCIS also released its current EB-5 processing times. Currently, the processing time for a typical I-526 petition is five months, matching USCIS’s target. Form I-829 processing time is currently six months, compared to the target of five months. The processing time for an RC initial designation proposal also exceeds the target, with a current processing time of five months, compared to the target of four months. On the other hand, RC amended designation proposals are currently being processed in one month, while the target processing time is four months. For EB-5 cases in which USCIS issued a request for evidence (RFE), the agency said its goal is to decide the case within 30 days of receipt of a response to the RFE.
Statistics for individual RCs. In response to inquiries from members of Congress, investors, and the press, in FY 2011 USCIS plans to begin publishing quarterly and annual reports on filing volumes and final case actions on I-526 and I-829 petitions affiliated with specific RCs. However, USCIS does not have a system in place to quickly and accurately gather that information. Currently, RC affiliations are not noted until the petitions are assigned to an Immigration Service Officer (ISO) and some time passes before cases are assigned, so there is a lag of several months before that information is compiled. USCIS plans to start gathering RC affiliations shortly after petitions are filed and expects to publish its first quarterly report by June 2011.
I-526 and I-829 revisions. USCIS plans to revise forms I-526 and I-829 in 2011. Revisions will include information collection on RC affiliations. Drafts of the revised forms will be posted at http://www.regulations.gov for review and comment.
Additional EB-5 staff at California Service Center. USCIS has added staff to process EB-5 cases at the California Service Center (CSC). The CSC is training additional ISOs in processing forms I-526, I-829, I-924 and I-924A, and has also added another EB-5 supervisor. The new EB-5 Immigration Service Officers (ISOs) are being trained by current EB-5 ISOs, which USCIS said has temporarily slowed adjudication of EB-5 cases. Once the new ISOs are trained, USCIS expects to adjudicate EB-5 cases faster. USCIS plans to post its EB-5 training materials on the USCIS website by the end of February 2011.
Form I-924 (Application to Establish Regional Center) and I-924A (Supplemental Form). As of November 23, 2010, applications for RC designation must use Forms I-924 and the I-924A Supplement. In the week before these forms became mandatory, USCIS received approximately 100 initial and amended RC proposals, roughly 65 percent of all RC proposals filed during FY 2010. USCIS expects the surge in filings to delay processing of RC applications. Form I-924A must be filed by all approved RCs for the first time no later than December 29, 2011.
EB-5 FAQs. USCIS is preparing EB-5 Frequently Asked Questions (FAQs), which it plans to post on its website shortly. USCIS plans to update the FAQs regularly.
Information on the latest stakeholder meeting, and a summary of the most recent meeting, are available by clicking here.
2. USCIS Confirms Indirect Job Creation Can Occur Outside Regional Center Boundaries
U.S. Citizenship and Immigration Services (USCIS) recently agreed to count jobs indirectly created outside the geographical boundaries of an EB-5 Regional Center (RC) in determining whether the RC’s business plan complies with EB-5 regulations. The policy change was expressed in a December 3, 2010, letter from USCIS Director Alejandro Mayorkas in response to a letter from Senator Patrick Leahy, Chairman of the Senate Judiciary Committee.
Mayorkas wrote: “USCIS interprets the law to require that a regional center focus its EB-5 capital investment activities on a single, contiguous area within the defined geographic jurisdiction requested by the regional center. Nevertheless, we agree that the law does not further mandate that all indirect job creation attributable to a regional center take place within that jurisdiction. I will, therefore, ensure that USCIS policy reflects this understanding of the law.”
The USCIS letter is at http://www.ilw.com/immigrationdaily/news/2010,1222-eb5.pdf.
3. USCIS Seeks Comment on EB-5 Policy Memo
USCIS accepted public comments on a December 2009 EB-5 policy memorandum. The memo, dated December 11, 2009, from Donald Neufeld, Acting Associate Director, Domestic Operations, is posted on the USCIS website here. Even though the USCIS issued the Neufeld EB-5 memo over a year ago, USCIS sought comments now.
Key aspects of the Neufeld memo include:
- Material Changes: The memo states that USCIS plans to require a new I-526 petition to be filed when there is a material change to the business plan after the initial approval. This can have significant consequences for an EB-5 investor, including the need to begin a new two-year conditional residence period and the possibility that a child who has turned 21 since the original I-526 filing would be excluded from the new filing. The memo would also allow the agency to deny an I-829 petition if there are material changes in the business plan.
- Streamlining Case Processing: The memo revised the Adjudicator’s Field Manual (AFM) by including guidance on adjudicating “exemplar” filings. The AFM would require ISOs to give deference to prior exemplar approvals during the processing of individual EB-5 petitions as long as the underlying facts remain unchanged. ISOs are instructed to revisit the RC approval if there is a material change, if there is fraud or misrepresentation, or if the RC approval was legally deficient.
- Meaning of Full-Time Position: The revised AFM will include guidelines on determining whether the job creation requirement has been met. Intermittent, temporary, seasonal and transient jobs will not be counted toward job creation goals. However, USCIS will allow construction and tourism jobs to be considered permanent if they are created by the EB-5 investment and are expected to last at least two years. ISOs will also be instructed that the full-time jobs cannot be an aggregate of several part-time jobs and cannot be filled by independent contractors.
- Determining Targeted Employment Area (TEA): The revised AFM will include guidance in determining whether the investment is in a TEA, allowing the EB-5 investor to invest $500,000 rather than $1,000,000. If the RC project is located in a TEA at the time of the investment, it qualifies as being in a TEA even if the unemployment rate goes down after the investment, because job creation is the goal of the EB-5 program. A claim that only a portion of a geographic area has high unemployment is seen as an attempt to “gerrymander” a finding of high unemployment and is not accepted without a state government designation.
4. USCIS Acknowledges Problems with Online Case Tracking
At a recent meeting with USCIS, the American Immigration Lawyers Association (AILA) expressed its concern that case status updates are not being posted on USCIS’s online tracking system, Customer Relationship Interface System (CRIS). In particular, AILA said that when a petition is transferred to another service center, CRIS does not show to which center the filing was transferred and no additional updates are made. So, for example, if a request for evidence (RFE) is sent but not received, and there is no indication of an RFE in CRIS, the case may be denied due to abandonment, particularly if USCIS records indicate that the notice was mailed to a correct address. USCIS’s Customer Service Directorate acknowledged the problems and promised to update CRIS to correct them.
In addition, USCIS recently said it is taking longer than usual to issue receipts for all filings due to the high volume of petitions filed before the USCIS fee increases took effect on November 23, 2010. In response to an inquiry, USCIS said it will take up to a month from the issuance of a receipt before the information is available to be tracked on CRIS.
5. New Publications and Items of Interest
USCIS blog entry on the EB-5 program. USCIS published a blog entry on November 30, 2010, “What is the EB-5 program?” The blog includes many comments from the public. The blog entry, on “Beacon: The Official Blog of USCIS,” is available at http://blog.uscis.gov/2010/11/what-is-eb-5-program_30.html.
New Appointments
H. Ronald Klasko (Ron) was recently appointed by the American Immigration Lawyers Association (AILA) as Chair of the EB-5 Committee.
Upcoming Speaking Engagements
On February 17, & 18, 2011, Ron will be speaking at the South Florida AILA CLE. Ron will discuss “EB-5 Lore vs. EB-5 Law.” For more information on this topic, please email Ron at rklasko@klaskolaw.com.
An EB-5 conference sponsored by the American Immigration Lawyers Association (AILA) is scheduled for March 14, 2011, at The Cosmopolitan of Las Vegas. Ron and Kate Kalmykov (Kate) have been invited to speak at this conference. For more information, see http://www.aila.org/content/default.aspx?docid=33810.
Recent Speaking Engagements
Ron spoke at the AILA Mid-Year Conference in Puerto Vallarta, Mexico on January 28, 2011. His presentation discussed the current economic climate and how it has impacted the filing of both individual and regional center EB-5 petitions.
On December 3, 2010, Ron discussed “What Pennsylvania Real Estate Lawyers Need to Know to Help Their Clients Raise Capital (Now!) for U.S. Projects: A Primer on the EB-5 Visa Program” at the PBI 14th Annual Real Estate Institute. To learn more about this topic, please contact Ron at rklasko@klaskolaw.com.
On November 3, 2010, Ron discussed “Visa and Permanent Residence Options for MBA Students” at Harvard Business School. Ron talked about employment options for the F-1 student, various H‑1B visa options, E, L-1, O-1, H-3, and various permanent resident options including EB-5s. To view the PowerPoint Presentations, please click here.
On October 21, 2010, Ron discussed “EB-5 Visas” at the AILA Rome District Paris Fall Conference. Ron discussed where to start, $500,000 vs. $1 million investment, common pitfalls, and looking ahead past conditional residence. For more on EB-5 visas, visit our EB-5 Resource Center.
On October 8, 2010, Ron spoke at the 24th Annual AILA Central Florida Chapter Seminar. Ron presented “EB-5: Gold Mine or Fool’s Gold?” Ron addressed the advantages and potential pitfalls of regional center EB-5s. Visit the articles page on www.klaskolaw.com to read the namesake publication that was the basis of this presentation.
On August 27, 2010, Ron and Kate were guest speakers at the American Immigration Lawyers Association CLE Conference “Investing in America – Making EB-5 Work for Your Clients and Your Practice.” Ron lead the panel, “EB-5 Lore vs. EB-5 Law,” which discussed common misconceptions about what actually works in EB-5 practice with emphasis on I-526 petitions. Ron also served as a panelist on “Ethical Issues and Minimizing Risks” which discussed how to approach difficult ethical issues in the EB-5 practice area, as well as what steps to take to minimize malpractice risk. Kate presented on the panel, “Preparing the EB-5 Case – Practice Tips and Documentation.” During this session, Kate discussed practical information essential to preparing and filing successful EB-5 cases, including documenting targeted employment areas, “at risk” capital, job creation, the bona fides of the investment source, the managerial role of the investor, and an introduction to the petition of removal of conditions (Form I-829). For more information on the EB-5 option, visit www.klaskolaw.com or e-mail Ron or Kate.
Ron spoke at the 2010 AILA Annual Conference in Washington, DC from June 30 – July 3, 2010 about the EB-5 visa in “EB-5: Investing in America, Creating Jobs.” Ron explained how to choose between EB-5 and other options, how to choose between individual and regional center EB-5s, risks for regional center investors, and issues and problems in removal of conditions from the investor’s green card. For more information or for copies of materials prepared in connection with this session, please contact Ron.
Ron spoke at the South African American Business Chamber in San Francisco, California from June 16 through June 18, 2010. He discussed the regional center EB-5 investment option for South American nationals and compared it with other immigration options. For more information on the EB-5 visa, please contact Ron or visit https://klaskolaw.com/.
On May 20, 2010, Ron discussed EB-5s at the New York Chapter of AILA. Ron hosted a 3 hour program on individual and regional center EB-5s. For more information, please contact Ron at rklasko@klaskolaw.com.
Publications
In the November 3, 2010 edition of Rebusiness Online, Ron published an article entitled “Developers Seeking Capital Under the EB-5 Program.” This article discusses the requirements of the EB-5 program and the advantages and disadvantages to developers of forming regional centers to attract EB-5 capital. This article also deals with other options available to developers, such as having a development project “adopted” by an existing regional center, purchasing a dormant regional center and attracting foreign capital through a pooled investment opportunity without a regional center. To view this article, click here. This article was also featured in the October 20, 2010 edition of The Legal Intelligencer and was also published in the PBI Real Estate Handbook.
KILP attorneys Ron Klasko and Kate Kalmykov contributed multiple articles to the website EB-5 Visa News. The website is a source for news, projects and information about EB-5 Regional Centers. Ron contributed several articles, including “Checklist for Prospective Investors and Entrepreneurs under U.S. Immigration Laws,” “Options for Developers Seeking Capital,” “When a Material Change Has Occurred in an EB-5 Project,” “Recent Updates from USCIS on EB-5,” and “Does the EB-5 Program Belong at USCIS?” Kate contributed two articles entitled, “President Obama Extends Four Immigration Related Programs Through 2012” and “A Look at the Kerry-Lugar Immigrant Entrepreneur Bill.” To obtain copies of these articles, please go to: http://eb5visanews.com/attorneys-contribute-eb5-visa-articles-eb5infocom/.
In Immigration Options for Investors, 2nd Edition, Ron published a chapter entitled “EB-5 Job Creation – What to Do When Plans Change.” The chapter discusses what investors must do when the necessary jobs will not be created, will be delayed or will be different than anticipated. For more information on the EB-5, visit www.eb5immigration.com or write to Ron at rklasko@klaskolaw.com.
Ron’s article “Regional Center EB-5s: Goldmine or Fools Gold” was published in the July 2010 edition of the AILA Annual Conference Handbook. This article addresses the advantages and potential pitfalls of regional center EB-5s. Visit the articles page on www.klaskolaw.com to read this publication.
“Does the EB-5 Program Belong at USCIS?” also authored by Ron, was published in the June 22, 2010 issue of Bender’s Immigration Bulletin. For more information regarding the EB-5 option, please contact Ron at rklasko@klaskolaw.com.
Noteworthy News
EB-5 Practitioners in the U.S. Featured on Chinese Television
On November 17, 2010, Kate was interviewed for a program to air on China Stock TV, a division of the FuDong Cultural Dissemination Company, LTD that broadcasts news to an audience of 140 million. During this interview, Kate discussed the EB-5 Immigrant Investor program. For more on these topics, please email Kate at kkalmykov@klaskolaw.com.
7. EB-5 Government Agency Links
USCIS Web Page on EB-5 Immigrant Investors
USCIS Policy and Procedural Memoranda on EB-5 Investors
Immigrant Investor Regional Centers List
Form I-526, Immigrant Petition by Alien Entrepreneur
Form I-829, Petition by Entrepreneur to Remove Conditions
Form I-924, Application for Regional Center Under the Immigrant Investor Pilot Program
Form I-924A, Supplement to Form I-924
Disclaimer/Reminder: This newsletter does not constitute direct legal advice and is for informational purposes only. The information provided should never replace informed counsel when specific immigration-related guidance is needed. Copyright © 2011 Klasko Immigration Law Partners, LLP and Alliance of Business Immigration Lawyers. All rights reserved.
