USCIS memo on EB-5 Program: Problems and Challenges

On December 11, 2009, U.S. Citizenship and Immigration Services published a memo whose subject was "Adjudication of EB-5 Regional Center Proposals and Affiliated Form I-526 and Form I-829 Petitions; Adjudicators Field Manual (AFM) Update to Chapters 22.4 and 25.2 (AD09-38". Whew!
The memo requires the filing of a new (or amended) I-526 petition if there is a change in the capital investment and job creation scheme. If the new I-526 petition is approved, the memo requires the immigrant investor to file a new I-485, application to adjust status, if in the United States. Current immigration law does not require the filing of an I-485 requesting re-adjustment of status.
The memo does set out a "pre-approval process" for regional center investment projects that is very welcome. Pre-approval, based upon a USCIS determinaton that the project is EB-5 compliant, will give investors putting their capital at risk some comfort. It will also have the effect of streamlining adjudication of individual I-526 petitions related to the pre-approved EB-5 investment project.
The memo interprets "direct construction jobs" to count as permanent jobs if they are created by the investment project and "are expected to last at least two years, inclusive of when the petitioner's Form I-829 is filed." The "two-year rule" is an arbitrary one lifted from the "marriage fraud amendments" and has no relationship to business, investment, or construction. Further, the construction industry relies upon "man-hours," not "jobs" or "positions."
The memo's description of Targeted Employment Areas (TEA's) -- areas of high unemployment -- is tortuous. That is why reform legislation needs to designate federally recognized Areas of Substantial Unemployment, currently pegged at 6.5 percent unemployment.