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What type of project should I use when applying for a regional center?

When filing an application for a regional center, is it better to use a hypothetical project or an actual project? Does USCIS process a regional center application faster or slower if they use a hypothetical project verses an actual project?

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    Reza Rahbaran

    Immigration Attorney
    Answered on

    An actual project may attract investors quickly, if marketed correctly. The processing time does not differ whether it is an actual project or hypothetical project.

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    Shahzad Q Qadri

    RC Creator
    Answered on

    This is a very broad question. Ideally what you want to do is apply for a viable project as you want to ensure that investors will be interested. While the market has been predominantly been flooded with real estate projects, you are not limited to such projects but infact can engage in any project that may create jobs. As to actual versus hypothetical, if you intend to get investors immediately and are able to proceed with an actual project, that is what would be ideally recommended.

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    Michael A Harris

    Immigration Attorney
    Answered on

    Having an actual project that is "shovel ready" and has enough EB-5 compliant evidence to support an exemplar I-526 petition is the best goal to achieve. This is because it can lead to pre-approval of the initial project for your regional center designation. Having pre-approval allows your future investors in the project to receive deference by USCIS if there is not ANY material change to the filing since its pre-approval. This is supposed to mean that your investors'' EB-5 petitions based on your project should not be re-adjudicated (except for the investor''s lawful source of funds) by USCIS. There are pro''s and con''s in seeking a hypothetical or actual project. A hypothetical does not require a set of offering documents and does not require a business plan which is fully comprehensive under the rules of the court case, Matter of Ho. But there still will be a level of scrutiny given to the project proposals including to the economic impact study and the general proposals. Today, USCIS is seeking a very high level of documentation in support of an actual project. Given the timing or temporal issues that may be involved, seeking a hypothetical may or may not be in your best interest. For more information, please feel free to contact me.

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    Rebecca White

    Immigration Attorney
    Answered on

    Whether you use a regional center or an individual investment is going to be a matter of personal preference and individual goals and needs. The application processing will not be impacted by the decision.

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    Daniel B Lundy

    Immigration Attorney
    Answered on

    Our experience is that an exemplar application, which basically seeks project pre-approval from USCIS as part of the regional center application, requires a very high level of specificity and project detail. USCIS wants to see a project that is pretty much "shovel ready," meaning that it is ready to go as soon as you get the EB-5 funding. This means your plans are done (or very close), you have permits and entitlements, you have your other funding sources lined up, and you have all your supporting documentation- including feasibility studies, appraisals, and other supporting documents completed and ready to go. If your project is still in the early development phase (as a project that is a year or more away from getting funding might be), it is very hard to meet the level of detail required by USCIS. The benefit, though, is that if you do meet the standard, the project is named in the regional center designation, and given "deference" in future I-526 filings. The level of "deference" varies in actuality, and USCIS does not really like to be bound by its prior decisions (which may have something to do with the heavy burden involved in getting an exemplar approved). An exemplar approval will give you some degree of marketing advantage, although exemplar approval is not the norm due to the long processing times and heavy evidentiary burden, so most projects in the market will not have an exemplar approval. An "actual" project seems to be no different than an exemplar, only it is not named in the regional center approval letter, and not given "deference" in future filings. This begs the question of why it is worth going through the process when there is little benefit. I only advise clients to go this route in extraordinary circumstances, like they want to test a concept with USCIS but do not want it publicly affiliated with the regional center because they are not sure if they will ultimately sponsor the project. Currently, USCIS may be easing the burden for hypothetical projects, but we have yet to how the standard will evolve. A regional center application should be based on a project (or projects), and the project needs to be at a stage where it has sufficient detail to create a detailed business plan, including budget, timeline, and five year financial pro formas, and can support an economic model capable of showing the positive effects the Regional Center will have on the designated territory, which includes the number of jobs created. We still advise clients that they should have a market/feasibility study or appraisal, and a significant level of detail relating to the project (square footage, number of hotel rooms, number of residential units, number of tables (for a restaurant, sales projections, comparables, etc). Of note at the moment, is that a hypothetical project does not need to be submitted with a full package of securities offering documents. There is a benefit in submitting sample offering documents though, because it allows USCIS to judge whether they are compliant- something you definitely want to find out at the regional center application stage, and not with investor I-526 filings (which must be approvable when filed, meaning that it is not always possible to save a petition by amending documents after they have been challenged by USCIS). However, this can be a cost and time savings in the application process. That said, the evidentiary burden for a hypothetical project is somewhat lower, and the processing time is somewhat faster (though the difference is not that significant in terms of overall timing right now- you might save a month to three months- maybe a few weeks more if you forego the offering documents and can get the application filed faster as a result). Deciding which to use depends on the development stage of your project, the level of detail available, marketing goals, timing issues, cost issues, and a multitude of other factors. It is a strategic decision you will want to discuss with your immigration attorney and securities attorney.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    I don''t think there is a big difference. Of course, an actual project would be the best, but the timing often does not work out that well (i.e., an actual project might not be available or might not stay available long enough). The hypothetical project approval allows subsequent investors to rely upon USCIS deference to the business plan and job creation methodology contained in the hypothetical project. In theory, assuming there is no material change or fraud, the subsequent I-526 petitions should be approved faster because the business plan and job plan have been reviewed and approved.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Using a hypothetical project may be faster, but there is no definitive proof of this. It will be slightly faster to prepare the application with a hypothetical project as well. Please note that at the time of filing the first I-526 petitions, the full, final, and Matter of Ho compliant business plan and other documentation must be filed. Either way, we recommend patience and retaining qualified EB-5 counsel, like our law firm, to assist you.

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    Anthony Korda

    Immigration Attorney
    Answered on

    USCIS has stated that they will adjudicate actual projects that are "shovel ready" faster than hypothetical projects.

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    Rohit Kapuria

    Immigration Attorney
    Answered on

    Strategically, hypothetical projects are, in theory, the path of least resistance. Often times, project developers will file an actual project as a hypothetical and once the regional center is approved (and usually by that time the project is further along, e.g. permits have come through, land has been acquired, other financing has been secured, etc.), then the developer markets the actual project to investors. As to processing times, there is not a significant difference. Either way (hypothetical, actual, or even exemplar), the regional center application will receive a request for evidence ("RFE"). Nonetheless, the hypothetical RFEs are usually easier to deal with.

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    Ed Beshara

    Immigration Attorney
    Answered on

    The application for a regional center designation can incorporate and make reference to either a hypothetical project or an actual project. There are benefits and advantages associated with both approaches. One advantage in filing an RC application with a hypothetical project is that there is less documentation for the adjudicator to review and therefore the adjudication process should be faster than if there was a review of an actual project. Furthermore, in a hypothetical case, there may be acceptable subsequent changes to a business plan, economic report and security offering documents that can take place on the basis of an approval of a hypothetical project. In contrast, in respect to a pre-approval of an actual project, subsequent changes to the business plan or economic report may nullify the pre-approval of an existing project.

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    Lei Jiang

    Immigration Attorney
    Answered on

    Normally the project submitted for a regional center designation will not be an actual project, but your actual project later on should be very close to the submitted project.

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