+1-800-997-1228
EB5 INVESTORS MAGAZINE

Strategies for I-526 RFE business plan updates

By Suzanne Lazicki

Requests for Evidence (RFE) on I-526 petitions frequently include this statement: “Upon reviewing the business plan, USCIS finds that the evidence in the record does not establish that the business plan is Matter of Ho compliant.”[1] Responding to such an RFE requires strategy. One must understand USCIS questions and concerns about the business plan, and also answer the questions in a way that avoids material change problems. The RFE response cannot simply replace the original I-526 business plan, but should provide supplementary information and evidence that helps the I-526 plan meet the “Matter of Ho compliant” standard.

I. UNDERSTANDING BUSINESS PLAN-RELATED RFE QUESTIONS

A. Distinguish between template RFE content and petition-specific content

Not every part of the I-526 RFE identifies a deficiency or asks a question.

I-526 RFEs typically present questions about the business plan in a section titled “Job Creation.” Questions specific to the subject petition tend to appear in the middle of this section, surrounded by boilerplate content.

The job creation section typically opens with template language that reviews the business plan requirement in the regulations at 8 C.F.R 204.6, and then quotes from precedent decision Matter of Ho to define a comprehensive business plan. This content is background, not a specific question or concern.

Following this generic opening, the job creation section presents questions specific to the subject business plan. This personalized content should guide the response, because it certainly applies to the subject petition.

Many RFEs conclude the job creation section with a stock checklist of detail and evidence that can support a business plan. This template content begins with the sentence “USCIS must be able to determine that it is more likely than not that the business plan is comprehensive and credible,” and introduces a bullet point list with the heading “Such evidence may include, but is not limited to:” followed by listed items in the categories of Market Analysis, Permits and Licenses, Contracts, Marketing Strategy, Business Organization, Staffing, and Projections.

The bullet point list provides examples of what additional evidence “may include” to establish that a typical business plan is comprehensive and credible. This list is copied and pasted nearly verbatim into scores of RFEs, and not necessarily a checklist of case-specific deficiencies. Experience suggests that many adjudicators do not look for the listed items in the I-526 record or consider their applicability before simply copying the bullet points into an RFE. The list provides a helpful reference, showing how USCIS unofficially expands on the Matter of Ho definition of a comprehensive business plan. But the bullet points are only a checklist for individual RFE response to the extent that the typical content/evidence items listed are indeed applicable to the subject petition, and not already in the I-526 record.

B. Identify underlying eligibility issues

I-526 RFEs may request business plan evidence that is not available. The RFE response can still succeed, if it looks beyond the specific evidence requests to identify the concerns behind the requests. With eligibility issues in focus, the RFE response can then present the best available evidence that addresses USCIS concerns.

For example, the RFE may request a copy of the building permit for a construction project. The eligibility issue behind this request is timely job creation. When the RFE asks for a building permit, it is asking for assurance that the project really will move forward and create jobs within the required timeline. If a building permit does not exist yet, then the RFE response should highlight the best available evidence that the business plan can and will be implemented shortly and meet job creation deadlines.

The conclusion to every RFE clarifies the RFE purpose and standard for success: “Petitioner must prove by a preponderance of the evidence – in other words, that it is more likely than not – that Petitioner is fully qualified for the benefit sought.” A good RFE business plan response marshals a critical mass of evidence to address USCIS concerns about petitioner eligibility with respect to job creation. This evidence may go beyond the specific documents suggested in the RFE.

C. Understand the “Matter of Ho compliant” standard

The term “Matter of Ho compliant” is shorthand for everything USCIS would like to see in an EB-5 business plan. The term specifically references the EB-5 business plan goal and standards defined in the precedent decision Matter of Ho.

Standards Defined by Matter of Ho for a Compliant EB-5 Business Plan

  • EB-5 business plan goal:
    • “to meet the petitioner’s burden of showing that he will create 10 permanent, full-time positions within the next two years”
    • “to enable the Service to determine whether the job creation projections are any more reliable than hopeful speculation”
    • “to permit the Service to draw reasonable inferences about the job creation potential”
  • EB-5 business plan characteristics to achieve the goal:
    • The plan is “sufficiently detailed” to support reasonable inferences about job creation
    • The plan goes beyond “mere conclusory assertions” to show that projections are not merely speculative.
    • The plan shows that the business “is feasible and has the potential for long-term survival.”
    • The plan is “comprehensive,” as defined by a paragraph summary of typical business plan content from business description and market analysis down to staffing requirements and income projections.
    • “Most importantly, the business plan must be credible.” [2]

When an RFE says “USCIS finds that the evidence in the record does not establish that the business plan is Matter of Ho compliant,” it means that USCIS has found that the evidence does not sufficiently validate job creation projections. Addressing that deficiency means adding detail and evidence about the nature and timing of job-creating activities. That may be as simple as providing a status update to show how the project has progressed since I-526 filing.[3] Additionally, the RFE response can address any USCIS questions and concerns about the original I-526 business plan.

D. Identify all questions that bear on the business plan

Because the EB-5 business plan exists primarily to justify claims about job creation, business plan-related questions will mainly appear in the RFE section titled “Job Creation.” However, watch for questions in other sections that might need to be addressed in a business plan update. Other RFE headings that could implicate business plan content: New Commercial Enterprise, Capital at Risk, Actual Undertaking of Business Activity, and Capital Made Available to the Business(es) Most Closely Responsible for Job Creation.

II. STRATEGIES FOR ANSWERING BUSINESS PLAN-RELATED RFE QUESTIONS

Once having identified and understood relevant questions about the I-526 business plan, the RFE response can simply answer them, right? Not so fast. RFEs demand additional evidence, but also place restrictions on that evidence. The issue of “material change” must shape the RFE response and EB-5 business plan updates.

The “Conclusion” section of each I-526 RFE reminds petitioners of the peril in submitting new information and documents.

If Petitioner submits updated or revised documents, please note that “[a] petitioner must establish eligibility at the time of filing; a petition cannot be approved at a future date after the petitioner becomes eligibility under a new set of facts. See Matter of Katigbak, 14 I&N Dec. 45, 49 (Comm. 1971). Therefore, a petitioner may not make material changes to a petition that has already been filed in an effort to make an apparently deficient petition conform to [USCIS] requirements.” Matter of Izummi, 22 I&N Dec. 169, 175 (Assoc. Comm’r 1998); see also 8 C.F.R 103.2(b)(1).

Matter of Izummi gives the example of a business that submitted a plan to qualify as a “troubled business” but did not qualify as such. The petitioner tried to rectify the problem by submitting a “completely different business plan.” The Administrative Appeals Unit found that “acceptance of the new business plan at such a late date was improper and erroneous.” The new business plan was too different from what was originally filed with I-526, to the point that it changed the grounds for eligibility. “If counsel had wished to test the validity of the newest plan, which is materially different from the original plan, he should have withdrawn the instant petition and advised the petitioner to file a new Form I-526.”[4]

Assuming that a petitioner does not want to start over with a new I-526 petition, he or she must avoid the Izummi pitfalls in RFE response. Any business plan update should emphasize basic continuity with the original I-526 filing, describe changed circumstances while showing that the changes do not affect the I-526 decision, and generally support a conclusion that the I-526 was approvable at the time of filing and remains approvable to this day, as updated and clarified.

A. Understand what kind of change is “material”

To avoid the material change pitfall, understand what flags a change as “material.” The USCIS Policy Manual chapter on I-526 petitions states that “A change is material if the changed circumstances would have a natural tendency to influence or are predictably capable of affecting the decision.” By contrast, “Changes that occur in accordance with a business plan and other supporting documents as filed will generally not be considered material.[5] As attorney Ron Klasko puts it, “A material change should be a change that makes an approvable project un-approvable, or makes an un-approvable project approvable.”[6]

For example, suppose that the schedule for an investment project has changed. The I-526 business plan prepared in 2018 projected that construction would be completed in 2020, but as of 2021 construction has not even begun. Is this a material change? It depends on whether the schedule change affects EB-5 eligibility. If the project is not only delayed but apparently risks never starting construction, then the EB-5 investment risks never creating jobs. Investor eligibility depends on prospective job creation, so delay is material when it undermines job creation potential.

On the other hand, perhaps the RFE response can provide evidence that the project is currently on track and can still expect to complete job-creating activities within the investor’s timeline, despite initial explainable delays. In that case, job creation potential remains intact despite the schedule change, and delays become immaterial to EB-5 eligibility.

The immigration lawyer leading the RFE response should examine RFE concerns about the business plan, review business plan changes that have in fact occurred since I-526 filing and help to flag avoidable and unavoidable material change issues.  

B. Use effective presentation to interpret changes

When the I-526 RFE states that “the evidence in the record does not establish that the business plan is Matter of Ho compliant,” the RFE does not specify a format for response. The petitioner has three basic options in response to business plan questions from USCIS: (1) simply submit a collection of the evidence documents specifically requested in the RFE; (2) submit a new business plan designed to be Matter of Ho compliant; (3) submit a business plan addendum that presents updates to the original I-526 business plan and discusses new evidence.

The third option can be most effective to effectively present and interpret changes. An unexplained exhibit collection or a fully-developed new business plan can be risky, because they each simply present new information. Those options leave the reader alone to figure out what changed between the I-526 filing and RFE response, and whether such changes are material. An addendum to the business plan, by contrast, can proactively explain new evidence in context of continuity and on-going eligibility.

An addendum obviously does not simply replace the original business plan. It thus avoids looking like the kind of “completely different business plan” that signals material change. As it references the original plan, the addendum can present updates and modifications in the context of what has not changed. As it references new evidence, the addendum can highlight and explain details significant to the on-going case for reliable job creation projections.

In any business plan related RFE response, documents such as permits, contracts, and tax records do the heavy lifting of establishing credibility and Matter of Ho compliance. I-526 RFEs request such documents; they do not specifically request replacement business plans. But new evidence will be most understandable and compelling if presented in context of the business’s development history. A business plan addendum can tell the story that interprets the evidence. The addendum can also provide clarifications and answer questions as needed to help the I-526 business plan record achieve the goal set by Matter of Ho: to show EB-5 eligibility.

[1] All quotes in this business plan from Requests for Evidence represent template language common to a sample of 10 I-526 RFEs from 2020 and 2021.

[2]All quotations in this list are from In re Ho, 22 I&N Dec. 212, 213 (Assoc. Comm'r 1998).

[3] Multi-year processing times mean that even if a business plan was perfect at the time of I-526 filing, USCIS can call it “deficient” at the time of adjudication simply because the plan has become outdated by that point, and lacks the most recent evidence for job-creating activities.

[4] Quoted language from In re Izummi. 22 I&N Dec. 169 (B.I.A. 1998) https://www.justice.gov/sites/default/files/eoir/legacy/2014/07/25/3360.pdf

[5] USCIS Policy Manual (Vol. 6, Part G, Ch. 4, Sec. C)

[6] “A Business Plan is Not a Statue — Impacts of Business Plan Changes” (Nov 17, 2016) by H. Ronald Klasko https://www.klaskolaw.com/eb-5-investor-visas/a-business-plan-is-not-a-statue-impacts-of-business-plan-changes/

Suzanne Lazicki

Suzanne Lazicki

Suzanne Lazicki is an EB-5 business plan writer and the owner of Lucid Professional Writing, LLC, based in Ogden, Utah. She assists clients in writing and preparing business plans to be reviewed by USCIS, with a focus on business plans for EB-5 immigrant investor petitions.

Disclaimer