Current Realities Versus Laws, Regulations,
and the Policy Memorandum
As stated above, there are a number of reasons why the regional center would file an I-924 application. For the purposes
of this discussion, the I-924 application can be filed for pre-approval of an actual EB-5 project that is shovel-ready (ready to
proceed with operations and development). The pre-approval
will cover industry designation, geography, and the project
documentation which includes a comprehensive business plan,
economic report showing required job creation, marketing
report, and securities/offering documents (private placement
memorandum, subscription agreement, operating agreement,
escrow agreement, etc.). Attaining pre-approval for an actual
project is a lengthy process and the current reality is that the
adjudication process of the I-924 application may take an
estimated 12 months, more or less.
However, there is no legal requirement that an I-924 application has to be filed and approved before the filing of an I-526
petition. Furthermore, based upon the current EB-5 policy
memorandum issued by USCIS, for a regional center designation that does not have the industrial NAICS codes or geography for a new, actual EB-5 project, there is no legal requirement
for the regional center or developers of the EB-5 project to file
an I-924 application to obtain pre-approval of this information
(industry and geography) before an I-526 petition is filed.
The reality is that a successful EB-5 project is contingent upon
the I-526 petitions being approved. Upon the I-526 approval,
the EB-5 project can, or continues to, use the investment
funds, whereas if denied, the investment funds may have to be
returned to the investor. It may be impossible for a project to be
successful if the lack of funds keeps it from coming to fruition.
To File or Not to File the I-924 Application,
That is the Question
Without the I-924 pre-approval, USCIS will review the actual project documentation for the first time in the I-526 petition
and determine whether to approve, issue a request for further
evidence, or deny. Hopefully, an approval, and quickly!
One would assume that the I-526 petition should be reviewed
quickly if the I-924 application has pre-approved the actual EB-5
project, as the adjudicator would not have to re-adjudicate a previously approved I-924 application for actual project documentation.
However, the EB-5 project principals may not want to file this
I-924 application for pre- approval of the actual EB-5 project
because of the lengthy processing time to adjudicate the I-924 application for pre-approval of the actual project. If they did file the
I-924 application first, they would then have to wait an additional
12 months for adjudication of the I-526 petition, and the potential
of a 24-month adjudication process is not a practical reality for
EB-5 project principals or the EB-5 foreign national investor.
In any project, the principals’ goals are to use the investment
funds as soon as possible, and, in fact, a majority of EB-5 projects are now using the investment funds before I-526 approval.
The certainty and predictability of pre-approval of actual EB-5
projects, by an I-924 approval, is something many EB-5 project
principals are foregoing.
The Timing of Material Changes is Significant
Another concern of EB-5 project principals and foreign
national investors is the possibility that the business plan may
change after the filing of I-526 petitions. The main question is
whether these changes to the actual EB-5 project business plan,
economic report, legal and financial infrastructure, securities/
offering documents, geography, or industry categories are material or not.
The most recent USCIS Policy Memorandum concerning
EB-5 Adjudications Policy (PM-602-0083), dated May 30,
2013, speaks to the issue of changes to a business plan before
the I-526 petition is approved.
Under the “Regional Center Amendments” section, a regional center may pursue an I-924 amendment if it seeks certainty
in advance that changes to the actual project will be permissible
to the USCIS before adjudication at the I-526 stage, but the
regional center is not required to do so by the filing of an I-924
application for pre-approval of a project. Though filing an I-924
for pre-approval may initially seem advantageous, as the policy
memorandum states that an EB-5 project that has received a
favorable determination at the I-924 stage should generally
be given deference at the I-526 process, it later states that a
previously favorable I-924 decision may not be relied upon in
the I-526 process if there is a material change to the underlying
facts. Furthermore, after the filing of an I-526 petition, the
effect of a changed business plan or material change to other
supporting offering documents in the investor’s petition will
depend on whether the change is made before or after the investor has obtained conditional lawful permanent resident status.
Hence, the I-526 petitioner investor must establish eligibility at
the time of filing and the petition cannot be approved if there
is a new set of facts or circumstances amounting to a material
change, which would require, as in the Matter of Izummi, a
re-filing of a new I-526 petition.
In other words, a deficient I-526 petition may not be cured
by subsequent changes to the business plan or factual changes
made to address an