- September 8, 2016
- Posted by: eb5-economist
- Category: About the EB-5 Program, Business plans, EB-5 Economics, EB-5 Job Creation
History and Overview of the EB-5 Visa Program
The EB-5 visa for Immigrant Investors is a United States visa through which foreign nationals may begin the path towards U.S. citizenship. Created by the Immigration Act of 1990, the program is intended to stimulate the U.S. economy by promoting job creation and capital investment. Visa candidates require a minimum investment of $500,000 in a Targeted Employment, or $1 million elsewhere.
Since the inception of the program, the number of EB-5 applicants has grown exponentially. In the 2008 fiscal year, there were 1,360 applicants; this number rose to more than 10,000 in FY 2014. More than half of the program’s 44,400 visas have been issued in the last three years alone. EB-5 visas are responsible for an estimated $4.2 billion in investments and have helped create more than 77,150. These numbers have been calculated despite the lack of data released by government and private agencies.
Projected Economic Impact Requirements and Matter of Ho Business Plans
Because economic stimulation is the most crucial element in being granted an EB-5 visa, applications must be clear on the projected impact of their business, particularly in Regional Center applications. The application should reflect concrete figures, such as an estimate of the number of jobs created. More importantly, the application needs to convey an understanding of how businesses intend to realize these figures. This is done through the business plan element of the application.
The Matter of Ho business plan is essentially the application overview. It is a document in which the steps to achieving application figures are laid out. Applications need to be able to make concrete and detailed statements about how they intend to achieve goals; simply stating that they intend to “create jobs” is not specific enough. As jobs are required to be sustained for 5 years, United States Citizens and Immigration Services (USCIS) needs to feel confident that an application’s goals are attainable.
Even after approval, the USCIS reserves the right to terminate visas if businesses fail to meet program requirements. Under regulation 8 CFR §204.6(m)(6), visas may be terminated if: (1) they fail to submit Form I-924A, which demonstrates eligibility on an annual or cumulative basis and/or as otherwise requested by the USCIS; (2) they fail to promote economic growth per their application or as otherwise required; (3) applicants and/or businesses engage in fraudulent activity.
Application Assessment by USCIS
The USCIS examines several factors when making decisions about applications. In order to assess economic growth, they may look at how active a Regional Center has been in hiring or investor recruitment. They want to know that a center is creating jobs instead of preserving ones that already exist.
It is therefore important that the Matter of Ho business plan lays out reasonable goals. Though applicants may be tempted to impress the USCIS with ambitious goals, it is more important to set achievable ones. Projecting unrealistic figures, such as embellishing job creation, could put applicants at risk of termination when these goals are not met. Consulting with professionals may help ensure that applicants are setting reasonable goals for themselves, which could improve both chances of approval and future adherence to requirements.