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  1. Evidentiary Standard in Matter of Ho Cases. By Lauren A. Cohen, Esq.

    In order to determine the outcome of an EB-5 case, adjudicators review all of the evidence presented applying the necessary standard of proof. Pursuant to section 291 of 8 U.S.C. 1361, the burden of proof is upon the applicant to present sufficient evidence to demonstrate his/her claim. The question that remains is what is the standard of proof used in EB-5 petitions and applications? According to Matter of Chawathe, 25 I&N Dec. 369, 375-376 (AAO 2010)[1], the petitioner or applicant must establish each element in question through a preponderance of the evidence.

    The preponderance of the evidence standard dictates that the evidence submitted must show what is claimed is at least 51 percent more likely than not true. As such, not all doubt needs to be removed. Thus, even if some doubt is left with the adjudicator regarding the verity of the evidence, provided that a substantial volume of credible evidence was submitted to show to demonstrate that the claim is probably true then the standard has been met. The standard of “Preponderance of the evidence” is a much lower standard of proof than what is required in a criminal case, wherein the prosecution needs to prove the case beyond a reasonable doubt.

    EB-5 Visas are granted to applicants who invest the minimum required ($500,000 or $1,000,000, depending on the location in which the business is located – please inquire for further details) capital into a New Commercial Enterprise that creates (or preserves, if the business qualifies as a “troubled business”) at least 10 full-time jobs for qualifying U.S. workers within two years of the investment.[1] In order to demonstrate that the New Commercial Enterprise will create at least 10 full-time jobs, sufficient evidence by way of a comprehensive, detailed, and credible business plan demonstrating the need for the jobs and a timetable for hiring employees should be submitted.[2]

    According to Matter of Ho, 22 I&N Dec. 206 (Assoc. Comm’r 1998)[1], a comprehensive business plan as contemplated by the regulations should contain (1) a business description; (2) the business structure; (3) a marketing plan with target market analysis; (4) personnel experience; (5) competitive analysis; (6) required licenses and permits; (7) a timetable for hiring; (8) job descriptions; and (9) budget and financial projections. Clearly, a Matter of Ho-compliant business plan is essential in order to satisfy the threshold burden required to be established by a preponderance of the evidence. However, it is not mandatory that the Business Plan include all of these required elements, but rather that the burden of proof is satisfied by way of the elements that are included. USCIS must be confident that the business plan will be executed and the jobs will be created in order to accept it.

    However, in order to understand how a comprehensive business plan can make or break an EB-5 case, it is best to review an actual Administrative decision. The petitioner’s initial application was filed on December 4, 2012 including: (1) documents relating to the source of the petitioner's claimed investment in the NCE; (2) the NCE's corporate documents, including documents showing the petitioner's claimed investment in the NCE; (3) documents from the U.S Census Bureau relating to Texas; and (4) the NCE's business plan. An RFE was issued in March of 2013 requesting evidence: (1) that the NCE was located in a TEA; (2) that the petitioner's requisite capital had been placed at risk in the NCE in light of LLC's obligation to secure $2 million to invest in the NCE and the NCE's obligation to redeem the petitioner's interest in the NCE; (3) that the capital the petitioner invested in the NCE was obtained through lawful sources; and (4) that the NCE would meet the job creation requirements. Ultimately, the appeal was denied on May 27, 2013 because the petitioner could not meet the burden of establishing the proof by a preponderance of the evidence.

    In conclusion, it is clear that the business plan originally submitted did not contain many of the required elements especially an adequate market analysis or budget and financial projections. A quality team consisting of knowledgeable business plan writers (attorneys), a CPA, a PhD., an MBA, and others experienced in the EB-5 process will assist you to determine what is necessary to comply with the Matter of Ho requirements, whether or not all of the required elements are present.

    To find out about professional, well-researched, articulate, expository narrative Visa Business Plans, whether for EB-5 or any other business-related Visa, as well as a variety of ancillary services, all of which are designed to specifically address USCIS’s concerns, contact e-Council Inc.com at info@ecouncilinc.com.

    e-Council Inc.com’s website, newsletter and other forms of communication contain general information about legal matters. The information is not legal advice, and should not be treated as such. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.


    [1] Id




    [1] http://www.uscis.gov/working-united-...grant-investor

    [2] http://www.justice.gov/eoir/vll/intdec/vol22/3362.pdf




    [1] http://www.justice.gov/eoir/vll/intdec/vol25/3700.pdf
  2. AAO Decision Regarding a Manufacturer Of Jello Shots By Lauren A. Cohen, Esq

    In a decision dated July 29, 2014, the Administrative Appeals Office (AAO) denied an appeal by a petitioner claiming that a comprehensive Business Plan was submitted. The AAO agreed with the original decision and the petitioner’s appeal was dismissed.

    The petitioner’s investment was through an established Regional Center to support a New Commercial Enterprise (NCE) in a targeted employment area. The NCE was in the business of developing, producing, selling and manufacturing alcoholic gelatin shots. There were several issues that AAO addressed; however, this article will focus on the issue relevant to a comprehensive Business Plan.

    The petitioner’s submission included a Business Plan and Economic Impact Analysis with the initial filing. One major issue highlighted in the RFE was that the petitioner did not source and itemize all pro forma financial data. The AAO stressed that according to Matter of Ho, 22 I&N Dec. at 213[1], detail is essential in order for a Business Plan to be credible (emphasis added). Furthermore, they noted that “(m)ere conclusory assertions do not enable USCIS to determine whether the job-creation projections are any more reliable than hopeful speculation.” On appeal, the petitioner still did not submit the missing data.

    Additionally, the Request for Evidence (RFE) which was issued in the case stated that the sales projections and marketing costs were not shown as reasonable compared to industry standards (emphasis added). On appeal, the petitioner argued that the sales projections and marketing costs were prepared by the president of the company who has actual industry experience. Furthermore, the petitioner argued that Matter of Ho did not require an independent entity’s projections and analysis. However, the AAO indicated that was not the issue but that the petitioner did not submit any evidence that showed who provided the projections. Furthermore, the petitioner did not submit copies of contracts to show any agreement(s) to distribute the gelatin shots.

    There were many other issues most of which involved insufficient evidence that was not resolved upon appeal. In conclusion, it is clear that documentary evidence is necessary to support a credible Business Plan. In order to prevent RFEs and denials and to ensure that a credible Business Plan is submitted at the outset, the proper team of professionals needs to be consulted.

    To find out about professional, well-researched, articulate, expository narrative Visa Business Plans, whether for EB-5 or any other business-related Visa, as well as a variety of ancillary services, all of which are designed to specifically address USCIS’s concerns, contact e-Council Inc.com at info@ecouncilinc.com.

    e-Council Inc.com’s website, newsletter and other forms of communication contain general information about legal matters. The information is not legal advice, and should not be treated as such. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.


    [1] http://www.justice.gov/eoir/vll/intdec/vol22/3362.pdf
  3. What is a Targeted Employment Area? By Lauren A. Cohen, Esq.

    One of the requirements of an EB-5 investor is to invest a certain amount of capital in a new commercial enterprise (NCE). The question is, what amount of capital does the investor need to invest? The answer depends on whether or not the NCE is in a targeted employment area (TEA).

    According to 8 U.S.C. § 1153(b)(5)(C)(i), the required capital investment amount is $1,000,000. However, 8 U.S.C. § 1153(b)(5)(C)(ii) and 8 C.F.R. § 204.6(f)(2), allows an exception where the NCE is in a targeted employment area. A “targeted employment area” is a rural area or an area experiencing unemployment of at least 150 percent of the national average rate.[1] “Rural area” is defined as outside of a Metropolitan Statistical Area, or the outer boundary of any city or town having a population of 20,000 or more (based on the most recent decennial census of the United States).[2]

    The reason why Congress added this exception was to encourage investors to create jobs in areas that have the greatest need. Logically, this would be in rural and areas of higher rates of unemployment. To qualify, the NCE must be considered to be principally doing business in this location. Several factors are examined to determine whether the NCE is principally doing business in that area, which include:

    (1) the location of any jobs directly created by the new commercial enterprise;

    (2) the location of any expenditure of capital related to the creation of jobs;

    (3) where the new commercial enterprise conducts its day-to-day operation; and

    (4) where the new commercial enterprise maintains its assets that are utilized in the creation of jobs. Matter of Izummi, 22 I&N Dec. at 174[3].

    Another important item to note is that even if a Regional Center was previously designated as a TEA, this does not mean that it will automatically be approved as a TEA for all future investments. An investor must hire a professional Team which includes a qualified economist who can confirm that the NCE is still considered to be located in a TEA.

    Additionally, the investor may seek to have an area designated as a TEA. To do so, the following evidence will be required:

    (1) evidence that the area is outside of a metropolitan statistical area and outside of a city or town having a population of 20,000 or more;

    (2) unemployment data for the relevant metropolitan statistical area or county; or

    [1] http://www.law.cornell.edu/uscode/text/8/1153
    [2] Id
    [3] http://www.justice.gov/eoir/vll/intdec/vol22/3360.pdf
  4. US-Israel E-2 Visa Agreement Finally Taking Effect By Lauren A. Cohen, Esq.

    Despite an ongoing “visa crisis,” (see below) the US and Israel have taken the final step before finalizing Israel as a participant in the E-2 Non-Immigrant Investor Visa program, designed to allow foreign nationals to invest in the US economy, and vice versa, through reciprocal treaties of commerce. The E-2 Visa will allow Israeli citizens, along with any essential employees and family, to live and work in the US so they can oversee their investments.

    In 2012, President Obama signed legislation that would add Israel to the list of countries eligible for E-2 nonimmigrant investor visas to the United States. However, the law’s implementation was on hold for over two years because Israel had not yet ratified the Treaty. The visa program can only take effect once both countries agree to all terms and conditions.[1]

    Over 2 years after the U.S. government approved the legislation, in what has been described as a “sudden turnaround,” the Israeli Knesset finally approved the visa legislation on August 13, 2014. According to Interior Minister Gideon Sa'ar, “The investor visa approval is expected to contribute to Israel's economy and create jobs for the citizens of Israel in the future.” He added that the agreement will open “new avenues for investment in the joint Israeli-American economy." In addition to granting investor visas, the E-2 program also allows citizens of Israel and the United States to make joint investments.[2]

    The Knesset’s decision to grant reciprocal visas to American investors in Israel took place amidst an ongoing “visa crisis,” which played out over the course of 2014. In February, 2014, State Department visa figures revealed that many Israelis were being barred from entering the US, including investors, as well as tourists[3] and Israeli defense officials.[4] Following accusations that the US was rejecting Israeli visa applications for political reasons, the US Secretary of State John Kerry launched an internal review on April 13th, 2014 to look into these claims. An initial investigation found that the rejection rate of visa applications for young Israeli tourists had indeed doubled, from 16% in 2009 to 32% in 2014.[5] These findings are part of a rising trend of Israeli visa rejections that has taken place over several years.[6]

    The high rate of Israeli visa rejections has profound implications, as it caused Israel to lose its place on the "white list," the list of countries whose citizens can visit the US without a visa. Only nations with a visa rejection rate of less than 3% are allowed on the list.[7]

    Following these initial revelations, US Ambassador to Israel Dan Shapiro announced that the State Department would “take immediate steps to increase the number of young Israelis that can travel to the US according to our immigration laws.” He also assured Israel that it “is one of the US's closest allies” and that the US welcomes “all networking between Israelis and Americans, including visits to the United States."[8]

    Though the State Department’s investigation is not yet complete, the United States’ recent re-commitment to improving relations with Israel by increasing the number of visas granted to Israeli nationals may explain the Knesset’s sudden turnaround this past August. In addition, Israel needed time to iron out some details of the legislation and how it would be implemented, particularly because Israeli immigration law did not have a visa category that parallels the US’s E-2 visa. Moreover, historically, Israeli immigration law has not granted visas to an investor’s accompanying spouse as does the E-2’s Employment Authorization Document (EAD).[9] There are additional politically-driven concerns on the Israeli side which temper the resistance. However, notwithstanding the reason for Israel’s turnaround, ratifying the US-Israel bilateral E-2 visa will no doubt encourage economic growth in both countries and strengthen their political relations.

    To find out about professional, credible and comprehensive Visa Business Plans, as well as a variety of ancillary services, all of which are designed to specifically address USCIS’s concerns, contact e-Council Inc.com at info@ecouncilinc.com.


    e-Council Inc.com’s website, newsletter and other forms of communication contain general information about legal matters. The information is not legal advice, and should not be treated as such. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.


    [1] http://israel.usembassy.gov/consular/niv/evisas.html


    [2] http://www.israelnationalnews.com/Ne...2#.VFBKkfnF-So


    [3] http://www.israelnationalnews.com/Ne...3#.VFEYv_nF-So


    [4] http://www.israelnationalnews.com/Ne...0#.VFEZ7_nF-So


    [5] http://www.israelnationalnews.com/Ne...4#.VFERffnF-So


    [6] http://www.israelnationalnews.com/Ne...8#.VFEaoPnF-So


    [7] http://www.israelnationalnews.com/Ne...8#.VFEaoPnF-So


    [8] http://www.israelnationalnews.com/Ne...4#.VFEckfnF-So


    [9] http://geygan.net/update-on-the-e-2-...eli-nationals/

    Updated 12-09-2014 at 04:19 PM by EB-5Blog

  5. Answering Direct Questions By Matt Gordon

    In the USCIS engagement EB-5 stakeholder’s meeting on December 5, 2014, the general partner of a non-Regional Center sponsored direct EB-5 investment assisted living facility project asked for clarification and relief regarding the potential effects of retrogression on investors in direct projects. The questioner noted that investors in direct projects have heighted participation requirements compared to those investing in regional centers. This understanding of the ‘Active Management Requirement’ is actually a common myth circulating around the EB-5 community, which has no basis in the law.

    Unfortunately, USCIS did not affirmatively answer the question, but rather said they would consider addressing it when they issue their retrogression policy guidance later this year. To not keep the EB-5 community waiting, I’ll use this opportunity to review the rules in detail and hopefully dispel these common misunderstanding.

    In short, if the entity into which the investments are made are structured as a limited partnership, the code of federal regulations provides a clear pathway for how investors can satisfy the ‘Active Management Requirement’. Under 8 CFR §204.6 (j)(5) requires, as initial evidence to accompany the I-526 Petition in the context of a limited partnership, that the petitioner:

    “(5) To show that the petitioner is or will be engaged in the management of the new commercial enterprise, either through the exercise of day-to-day managerial control or through policy formulation, as opposed to maintaining a purely passive role in regard to the investment, the petition must be accompanied by:

    (iii) If the new enterprise is a partnership, either limited or general, evidence that the petitioner is engaged in either direct management or policy making activities. For purposes of this section, if the petitioner is a limited partner and the limited partnership agreement provides the petitioner with certain rights, powers, and duties normally granted to limited partners under the Uniform Limited Partnership Act, the petitioner will be considered sufficiently engaged in the management of the new commercial enterprise.”

    According to the Adjudicator’s Field Manual (Quoted language below found at http://www.uscis.gov/iframe/ilink/do...-0-0-8263.html):

    “While an alien may seek EB-5 qualification on the basis of an investment in a limited partnership, under current regulations, even he or she, as a limited partner, must have a certain level of involvement in the running of the business.

    Under 8 CFR 204.6(j)(5)(iii) , if the alien is a limited partner, he or she must have been granted all (i.e., not simply some) of the rights, powers, and duties granted to the other limited partners in the partnership in order to be considered sufficiently engaged in the business.” [emphasis added]

    Accordingly, if in the partnership every limited partner is afforded the identical rights of every other limited partner, the requirements, as interpreted by the Adjudicator’s Field Manual, are satisfied. In addition, if the partnership is structured in compliance with subsection (iii) cited, whereby it provides the Employment-Based Immigrant with the “rights, powers and duties normally afforded to limited partners under the Uniform Limited Partnership Act” (“ULPA”), then the petitioner has satisfied the management participation requirements. (Full text of the Uniform Limited Partnership Act (2001) available at http://www.uniformlaws.org/shared/do...al_2001rev.pdf.

    The language in the CFR is somewhat odd in that the uniform act does not specifically deal with limited partner management rights. (See http://www.uniformlaws.org/Legislati...tnership%20Act.) Accordingly, what is ‘normal’ is a matter of context. Normally, as a matter of state’s law, a limited partner is granted active management duties, the limited partner would lose their limited liability status as a limited partner. Limited partners are generally afforded the ability to control the partnership in the case of extreme situations, such as liquidation or material adverse event in the business affairs of the partnership in question. So if the limited partnership agreement would provide the limited partner investors the right to replace the general partner (and take control of the partnership) in the case of a proposed liquidation of the partnership or some other materially adverse event (potentially including the failure to create sufficient jobs to support the investors’ I-829 petitions), then the investors would be afforded the rights, powers and duties normally afforded and they should be deemed in satisfaction of the ‘Active Management Requirement of 8 CFR §204.6 (j)(5).

    © 2014 Matthew Gordon
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