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EB-5 Visa Blog

To Exemplar or Not

Sylvia Sobczyk

When applying for I-924 regional center designation it is important to know the difference between the types of projects and the deference afforded to them by USCIS. The type of project that can be submitted on an I-924 application depends on the development stages of the project. Out of the three project types, “exemplar” status provides regional centers with a key advantage that the others project types do not.

 

The “exemplar” petition is an option for regional centers whose project is “shovel ready”, has all of the requisite documentation, and is now seeking pre-approval of the project’s compliance with EB-5 requirements. The “exemplar” petition is a sample I-526 petition submitted by a Regional Center along with the I-924. Since this is a sample I-526 petition, the regional center must submit all of the requisite project documentation at the time the I-924 is filed. It is important to note that once the “exemplar” project is approved, project documents cannot be changed in order to be accorded deference in terms of the project pre-approval.  For example, when time comes to file investor I-526 petitions, changes cannot be made to the project’s business plans, economic reports, or offering documents if the project is preapproved.  A change to any of these documents would disqualify a project from “exemplar” status.

 

Similarly, the “actual’” petition is also a “shovel ready” project that requires all project documentation to be submitted with the I-924. USCIS also gives deference to the project documents during latter I-526 adjudications. However, the “actual” project does not receive pre-approval status. This is an important distinction, because an “actual” project is allowed to make small changes to its documents since it is not pre-approved. The “actual” petition is an option for regional centers who would like deference to project documents and who wish to benefit from the ability to change those documents.

 

In comparison, the “hypothetical” petition is not a “shovel ready” project and does not seek pre-approval from USCIS. These projects are not fully developed and may need a change in location, size, or scope. Therefore, the “hypothetical” project only requires documentation pertaining to economic growth and job creation to receive designation, and may add/change documents as they become available. USCIS has been unclear regarding the amount of deference that “hypothetical” project documents are afforded during I-526 adjudications. The 2014 stakeholders meeting suggested that a “hypothetical” project’s business plans and economic studies would not receive the same level of deference as the documents from an “actual” project. The “hypothetical” petition is an option for regional centers whose projects are not as far along in development stages as “exemplar” or “actual” projects, and who wish to benefit from the ability to add and change project documents.

 

So why file an “exemplar” petition if you cannot change project documents? The key benefit of “exemplar” status is that regional centers can market projects once USCIS approves the I-924. After the project is pre-approved, the regional center can present its project to investors abroad. Investors are more willing to invest their funds into a project if they are able to see that the project is “pre-approved”. Even though pre-approval of the underlying project does not guarantee approval of the I-526, it does eliminate an element of uncertainty and risk involved for investors who are thousands of miles away from the project and are unable to visit the project site. Investors feel more comfortable investing in a project if they know it is “shovel ready” and has received the stamp of approval from USCIS.

 

Furthermore, “exemplar” ere-approval also means that investors can file I-526 petitions without having to wait additional time for the project to be approved. Regional Centers are encouraged by USCIS to go through the preapproval process of their projects in order to speed up I-526 adjudication process. In theory, when the I-924 application is approved, USCIS gives deference to the project documents, and the only documentation that requires review is the investor’s source of funds. This is not always the case as project documents are sometimes re-reviewed.  Unfortunately, project pre-approval has not changed adjudication time of I-526 petitions. Nonetheless, “exemplar” status is beneficial for regional centers because it rewards regional centers with marketing capabilities and provides deference to project documents during the I-526 adjudication process. 

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