25 Aug How do Material Changes to an EB-5 Business Plan affect EB-5 Status?

Establishing a new business or investing in an existing one is exciting, but it is not easy, especially when you are required to create 10 full-time jobs pursuant to the EB-5 program.[1]  There are many things that could change the vision and approach outlined in the original EB-5 Business Plan.  For example, a natural disaster could destroy the area where the business was supposed to be built, or the economy could take a dive as it did not too long ago.  The questions that surface in correlation to such events include what types of changes are permissible, and at what point in the process changes can be made.  Both of these questions depend on the investor’s status in the U.S. at the time of a change.

According to Matter of Katigbak, 14 I&N Dec. 45, 49 (Comm. 1971), eligibility is established at the time of filing the I-526 petition.  If an investor has not obtained conditional permanent residence status, then a material change is not permissible.  “Material change” was defined by the U.S. Supreme Court in Kungys v. United States, 485 U.S. 759, 770-772 (1988)[2] where the court stated that “change in fact is material if the changed circumstances would have a natural tendency to influence or are predictably capable of affecting the decision.”  Therefore, at the time of adjudication if there is a material change in the facts it may cause revocation of the I-526 approval.  In the May 30, 2013 EB-5 Adjudications Policy Memorandum, USCIS offered examples of situations in which a material change would cause a denial.  USCIS explained that if at the time the petition is filed the investor is investing in a certain project, but at the time of adjudication it is found that the investment has been or will be applied to a different project, it may be denied.[3]  USCIS continued to explain that the only way a material change could be approved is if the investor files a new I-526 petition with a new Business Plan.

The next question is whether material changes can be made once an investor has obtained conditional lawful permanent resident status.  In the past, USCIS did not permit changes to an investor’s Business Plan at the I-829 stage.  However, USCIS has altered this view recognizing that circumstances may change because the business world can be unpredictable, as we have seen all too clearly over the last several years.  However, if USCIS finds that the I-526 petition was not filed in good faith (in order to avoid the immigration laws) then USCIS can terminate the investor’s status according to 8 U.S.C. § 1186b(b)(1)(A).[4]

It is important to note that material changes will prevent any previous determinations by USCIS from holding weight at the I-829 stage.   One example USCIS gave for a non-material change at this point would be if the investor was admitted to the U.S. based on a Business Plan regarding an investment in a Regional Center project in the food service industry, but that the investment was subsequently redirected into another food service project within the same job-creating entity.  In this situation any previous decisions by USCIS will be considered.

In conclusion, if possible, it is best to adhere to the original Business Plan submitted with the I-526 petition.  However, if there are any changes to the project, then the appropriate professionals need to be contacted to review these changes and to draft a new Business Plan.  The EB-5 process is not easy, but if the right professionals are engaged at all stages, an investor can be successful in obtaining permanent U.S. resident status.

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, or visit our website at https://www.ecouncilinc.com.

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[1] http://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor

[2] http://supreme.justia.com/cases/federal/us/485/759/

[3] http://www.uscis.gov/sites/default/files/USCIS/Laws/Memoranda/2013/May/EB-5%20Adjudications%20PM%20(Approved%20as%20final%205-30-13).pdf

[4] http://www.law.cornell.edu/uscode/text/8/1186b