After a very lengthy process, the USCIS finally issued its final EB-5 Adjudications Policy Memorandum on May 30, 2013. The full text of the new policy memo can be found here. Policy memos in the context of immigration are like instruction manuals for the officers that review the filings. While the statutes and regulations provide the big framework of an immigration policy, it is the policy memos and the AFM (Adjudicators Field Manual) that shed light on the technical details of what the officers are looking for.

The EB-5 program has grown and evolved at a breakneck speed in the past five years, and the existing policies often didn’t reflect the reality of how the program was being administered; and as such, this new policy memo has been on the horizon for over a year now. A number of on-line commentators have broken down the many important changes brought about by the new memo; many which affect existing Regional Centers tremendously. So here, I will discuss those elements which directly affect the EB-5 investor.

2009 “Material Change” Rescinded

In the December 2009 Neufeld Memo, the USCIS stated that if there was a “material change” in the business plan after the I-526 was filed, then a new I-526 would have to be filed. But the new memo relaxes this significantly by allowing conditions to be removed at the I-829 stage even if there has been a material change in the business plan as long as the original I-526 business plan was filed in good faith and the new business otherwise meets the criteria for removal of the conditions. Let me use an example to illustrate the change.

Sang-joon invested $500,000 in a Regional Center sponsored hotel project. The I-526 that was filed contained a business plan for the hotel. Sang-joon’s I-526 was approved and subsequently he obtained his greencard through consular processing at the U.S. Consulate in Seoul, Korea. After Sang-joon obtained his conditional greencard but before his I-829 removal of condition filing came due, the Regional Center developer changed the business plans and decided to build a condominium in lieu of a hotel using the EB-5 funds. Under the 2009 memo, the first question was, is building a condo instead of a hotel a material change? (This was what was driving the EB-5 community crazy when the 2009 memo first came out – nobody could say for sure what was material.) If we conclude that this was in fact a “material” change, under the 2009 memo, instead of filing an I-829 removal of conditions, Sang-joon must now file a NEW I-526 with a new business plan for the new condo project. Aside from the inconvenience and costs of having to file a new I-526, the real issue was that if your child had aged-out before the new I-526 was filed, the child could not get a greencard under the new I-526. (Children of greencard applicants must be under 21 years of age at the time of the visa filing in order to qualify as dependents.)

The new policy memo has changed this draconian material change policy and made it much more reasonable: now, Sang-joon can proceed directly to the I-829 filing without having to file a completely new I-526 for the new condo project. And as long as the condo project meets all the criteria for removal of conditions (e.g. the jobs were created, the investment was sustained, etc.) Sang-joon can get his permanent greencard.

“Reasonable” Time within Job Creation Context Defined

The EB-5 regulations state that at the I-829 filing, the investor must be able to show evidence “that the alien created or can be expected to create within a reasonable time ten full-time jobs for qualifying employees.” (Emphasis added.) For the first time, the USCIS has attempted to put a number on what constitutes “reasonable” and has stated in the new policy memo that “jobs created within a year of the two-year anniversary” of obtaining the greencard “may generally be considered to be created within a reasonable period of time. Jobs projected to be created beyond that time horizon usually will not be considered to be created within a reasonable time, unless extreme circumstances, such as force majeure, are presented.”