No Two Plans Are Alike: How Business Plans Should Differ for Direct Investment vs. Regional Center Investment to Ensure Matter of Ho Compliance

by Marisa Marconi


Whether an investor participates in the EB-5 program through a regional center or direct investment, a comprehensive business plan is a key component of the I-526 petition and provides context for job creation. The Matter of Ho precedent decision defines what USCIS considers “comprehensive” and is the standard against which USCIS reviews business plans. In theory, plan development should be straightforward, especially when such a clear list of required elements is provided. But in reality, no business fits the Matter of Ho mold perfectly, and the differences between direct and regional center investment complicate development even further. Understanding how these differences impact the elements of the business plan is crucial to developing a plan that is Ho compliant, provides the strongest case for an investor’s petition, and helps to mitigate an RFE at the I-526 stage.

How the Type of Project Dictates the Plan Outline

Though multiple investors can invest directly into the same company, EB-5 direct investment projects typically involve one individual investing in a new or expanding business.

Business plans for most direct projects closely resemble the Matter of Ho outline: the business has clearly defined operations, products and/or services, and direct job creation with a clear hiring timeline.

The Regional Center Program, in contrast, allows indirect job creation and pooled capital. This makes the program an excellent source of funding for large-scale development projects.

In such cases, investment is part of a larger capital stack, and the jobs are often created from both the project’s construction and its post-construction operations. A regional center business plan will address both construction and operations by including a development section that details the construction (including a detailed budget and timeline) as well as Project Summary and operations sections that describe how the project will operate post-construction (including service description, marketing  strategies, and market analysis). The project summary and operations sections should follow Matter of Ho to the extent possible. In reality, some of the required elements (such as a list of suppliers) will not be available or determined at the time of the filing and, as such, are not typically included. Moreover, if a project results in job creation from construction only (i.e., a real estate development where construction spans 24+ months, but the building is sold once complete), the plan often excludes the operations section altogether.

Organizational Structure

With direct EB-5 investment, the new commercial enterprise (NCE) is the operating business; it is the only entity of consequence as it relates to the business plan.

The plan should clearly address that entity’s structure, ownership and organization, and provide a clear description of the NCE’s business activities.

In contrast, it is common for regional center projects to include multiple entities. One common investment model is when EB-5 investors invest directly into a lending entity (the NCE), which in turn finances a project (the job creating enterprise or JCE). In this model, the “business activity” of the new commercial enterprise is to provide financing for the project, and it is the job creating enterprise’s activity that most directly impacts the economy.

A regional center plan should clearly describe the structure of the project as a whole and include an organizational chart defining the NCE, its relationship to the JCE, the role of the regional center, and any other entities involved. The ownership structure and management of each entity should also be listed, and the flow of funds between the various entities should be illustrated.

Source and Use of Funds

A business plan for a new company must clearly outline the sources and uses of invested funds. For direct investment, the table should list the EB-5 investment (and any other secured funds) and itemize the uses of those funds. This includes onetime up-front costs, equipment, build-out costs and immediate inventory expenses. The balance of the investment is considered working capital, which covers the operating expenses until the business turns a profit.

In a regional center plan, the capital stack should be detailed, followed by a summary of the project costs, including hard construction costs, soft construction costs, FF&E and financing fees. It is also good to include a detailed construction budget with line-item hard construction costs.


Regional center plans should include the general timeline of the project’s development as well as a detailed construction timeline, typically in the form of a Gantt chart provided by the developer or contractor. An additional operations timeline should be included if applicable. Direct plans should include a detailed operational timeline that states when the investment was made and when the primary activities funded by the investment will be deployed.

These will vary from project to project, but typically include major asset purchases, execution of key contracts, launch of operational activities and hiring.

Management Team and EB-5 Investor Participation

A direct plan should include biographical summaries of the company’s management team, including a biography of the investor and an explanation of his or her role in the company (if managerial or operational).

Regional center investors participate directly through their partnership or membership in the NCE and typically do not hold management positions within the company or JCE. Regional center plans should profile all entities involved in the project, including the regional center itself, the developer, the operator, and any individuals specifically involved in project development.

Job Creation

Job creation is the pillar of the EB-5 program. Similarly, demonstrating how and why the requisite jobs will be created is the central purpose of the business plan. The various elements of the business plan accomplish this indirectly by describing the activities of the business, the potential for success in the market, how it will advertise to generate revenue, and a detailed financial pro forma to show that the business can support projected staff.

In addition, Matter of Ho dictates that plans must include detailed information about staffing requirements, a timetable for hiring and job descriptions for all new positions.

In a direct plan, a job creation section will detail any current staff in addition to new positions to be added, include a hiring timeline, provide a detailed job description for each position, and display an organizational chart that illustrates the company’s hierarchy. The financial forecast should reflect the timing and wages detailed in the job creation section.

Addressing job creation in a regional center plan is completely different due to the inclusion of indirect jobs. To provide justification for job creation, regional center projects must develop an economic impact report as a separate, independent study outside of the business plan. The business plan’s function is to support this report, rather than serve as the primary source of evidence for job creation. At minimum, a regional center business plan should summarize the findings of the economic report; at maximum, it should summarize the report’s findings and identify direct operations jobs anticipated. For example, if the project is a new hotel and jobs are created through construction and operations, the operations section of the business plan should address positions that will be required when the hotel is operational (i.e. front desk, housekeeping) and include a brief job description of each.


The guidelines provided by USCIS - and indeed by any online search for “business plan table of contents” - are simultaneously extensive and general. While a business plan used for EB-5 investment must follow the prescribed definition of what USCIS considers “comprehensive,” modifying the Matter of Ho outline to better address the type of investment and project is key to submitting a tailored plan that best captures the potential success and economic impact of the job creating enterprise.



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