Hypothetical, Actual or Exemplar? Choosing Which Regional Center Project Proposal is Right for You

by Lauren Cohen

In order to secure designation as a USCIS- approved EB-5 Regional Center that is authorized to accept EB-5 investments, applicants must first file Form I-924 with USCIS. The regulations governing the EB-5 program stipulate that the proposal submitted to obtain such designation must demonstrate: (1) that the center will promote economic growth in that region; (2) that direct or indirect job creation will be made through capital investments; (3) the amount and source of capital investment and promotional efforts; and (4) a positive impact on the regional or national economy. The proposal must be supported by economically or statistically valid forecasting tools.[1]

To fulfill these requirements, applicants submit a proposal for a hypothetical, actual, or exemplar project. The amount of verifiable detail required depends on the type of project proposed at the time of submission. Actual and exemplar project proposals require the submission of a Matter of Ho-compliant business plan.

A Matter of Ho business plan must include the following components: (1) a description of the business; (2) business structure and objectives; (3) a marketing plan with target market analysis; (4) personnel experience; (5) competitive analysis; (6) required licenses and permits; (7) a staffing timetable for hiring; (8) job descriptions; and (9) budget and financial projections. Additionally, the overriding requirement of Matter of Ho is that the business plan must be credible.

Each of the possible project options is detailed below, and the options are also compared in the accompanying table.

Hypothetical projects

A hypothetical project proposal is best if you are not ready to move forward with a specific project, but want to obtain overall approval for your regional center so that you will be able to accept investments when you are ready to move forward with a project.

Hypothetical projects may only need to include general proposals and predictions to show that the center will “more likely than not promote economic growth, improved regional productivity, job creation, and increased domestic capital investment.”[2]

Notably, a hypothetical project proposal does not demand that the business plan be Matter of Ho-compliant. Nonetheless, although a hypothetical project requires only a business plan with general proposals and predictions, it is strongly recommended that the business plan meet most, if not all, of the Matter of Ho criteria to ensure a smooth and pain-free approval.

Additionally, in a recent non-precedent decision, the Administrative Appeals Office (AAO) clarified that submitting a hypothetical project does not require the applicant to include letters of intent or commitment from prospective sources of matching funds. 

Although the hypothetical path requires less initial planning and documentation, it may cause more work and worry at later stages. Unlike for actual and exemplar projects, USCIS determinations based on a hypothetical project will not be given deference in a subsequent filing. This means that when an applicant files either an I-526 investor petition or an amended I-924, USCIS will treat the petition as a new case rather than relying on the previous decision as authority, creating the possibility that new investors will be rejected even if past investors had been approved. Additionally, if organizational and transactional documents are submitted with a hypothetical project, they will not be reviewed, even if the applicant specifically requests a compliance review. Compliance reviews are only available to exemplar projects.

Actual projects

An actual project proposal is best for you if you have a specific project in the advanced stages, and you are interested in deference for future investor applications while maintaining some degree of flexibility.

Actual projects require more detail than hypothetical projects, but are less complicated than exemplar projects. An actual project has been referred to as a “shovel-ready” project, which means that the project is in its advanced stages. It also implies that construction can start on the project, and that it will have an immediate impact on employment and the economy. In order to show these necessary details, specific evidence, including a sound business plan, is essential.

An actual project proposal must include a Matter of Ho-compliant business plan. The application needs to include enough specific evidence to prove “that the proposal contains verifiable details and is supported by economically or statistically sound forecasting tools.”

Determinations based on an actual project will receive deference in subsequent filings of I-526 petitions. If USCIS makes a favorable determination based on an actual project proposal and uses this decision in subsequent filings with the same material facts and issues, then it is easier to predict the outcome of I-526 petitions. Another notable benefit of submitting an actual project is that small changes can be made to the business plan and supporting documents when submitting the I-526 petition (such changes, however, must not be material).

If it is determined that an actual project proposal does not include sufficient verifiable details, the project can still be approved as a hypothetical project; however, it will not receive deference.

Exemplar projects

An exemplar project proposal is best for you if you are fully committed to your project and would like to ensure the highest level of certainty that project documents will be approved in investor applications, through pre-approval.

An exemplar project proposal applies when an applicant files a template I-526 investor form with an I-924 application including an actual project proposal. In order to receive a compliance review of the specific project, applicants must submit an exemplar project using an I-924 application along with an I-526 form. Such a review includes an evaluation of any organizational and transactional documents to determine whether they are compliant with the EB-5 program. An exemplar project is the most complicated project of the three choices, because approval is based on both project and immigration eligibility. When USCIS considers an exemplar project, it considers the requirements of an actual project, as well as the I-526 requirements for investor petitions. 

A major advantage of filing an exemplar project is that USCIS will pre-approve this type of project provided that all necessary elements are included, and if sufficient detail is provided according to compliance with EB-5 eligibility requirements. However, no changes to the supporting documentation are permitted, including the business plan, when filing future petitions. For exemplar cases, a complete and comprehensive Matter of Ho business plan is required, and is effectively the crux of the application.

The determination of whether an applicant should submit a hypothetical, actual or exemplar project depends largely on the amount of verifiable detail available at the time of filing, as well as the ultimate goal of the submission. This determination should not be made without careful consideration and professional advice from immigration counsel and qualified professional ancillary service providers.

[1] 8 C.F.R. § 204.6(m)(3)

[2] This is the language of USCIS in the May 30th Policy Memorandum. In subsequent decisions the AAO interpreted this to mean that hypothetical projects only need to include general proposals and predictions. 


Lauren Cohen

Lauren Cohen

Lauren Cohen is an EB-5 immigration attorney and the president and founder of e-Council, Inc. and is located in Raton, Florida.


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