The stated USCIS processing time for an I-924 Application is officially 13 months as of April 2014.  With the additional time to develop the necessary documents to establish the regional center and file the I-924 application with USCIS, the process may take as long as 15-18 months to become a USCIS designated regional center.  Unfortunately, I-526 petitions cannot be filed through the regional center while the initial I-924 application is pending with USCIS because there is a requirement that I-526 petitions be “approvable when filed.”  In the EB-5 context, the I-526 petition is not “approvable when filed” unless there is an approved regional center sponsoring the project so indirect jobs can be counted.  The “approvable when filed” standard is applied to all immigration applications, not just EB-5 petitions.  The only option is for the regional center to wait to file I-526 petitions until the I-924 application is approved.

Or is it?  Many regional centers are anxious to get into the market and find investors for its project(s).  On the flip side, what investor will want to wait 15-18 months to file his or her I-526 petition while the I-924 remains pending at USCIS?  An option exists to speed up the filing process if the EB-5 project is structured correctly.  It may be possible to break the EB-5 funding into separate tranches, either through one new commercial enterprise that has separate series of LLC interests or separate classes of limited partners, or through separate new commercial enterprises.  An initial tranche then may be sponsored by an existing regional center that agrees to sponsor the first tranche.  Through an appropriate agreement with a regional center, the “rented” regional center can monitor the project, the new commercial enterprise, and the resulting job creation for the initial tranche.  The “rented” regional center will report that progress back to USCIS on Form I-924A on an annual basis.  The “rented” regional center retains those duties until all I-829 petitions are approved for investors in the tranche.  This requires careful corporate structuring, as well as careful and thoughtful drafting of the regional center sponsorship agreement and job allocation among investors.  However, when done correctly, the end result is two regional centers sponsoring an EB-5 project that may have one or multiple new commercial enterprises, with each regional center sponsoring a specific tranche of investors through a series, class or new commercial enterprise.   USCIS has recently approved I-526 petitions for several EB-5 projects in this manner, with some of these projects breaking funding into tranches through LLC membership series/limited partnership classes in one new commercial enterprise and others breaking funding into tranches through the establishment of multiple new commercial enterprises.

The resulting jobs created from the EB-5 project can be allocated so that investors in each series/class/new commercial enterprise (depending on corporate structuring) are then shared based upon the LLC Agreement(s) or LP Agreement(s) that control.  An EB-5 project may have multiple funding sources, including two EB-5 new commercial enterprises or several classes or series of investors in one new commercial enterprise (not to mention developer equity, senior financing, and mezzanine financing from 3rd parties).  The economic report will model total EB-5 qualifying jobs from the EB-5 project.  The regulations at 8 CFR §204.6(g) state that “[t]he establishment of a new commercial enterprise may be used as the basis of a petition by more than one investor, provided each petitioning investor has invested or is actively in the process of investing the required amount for the area in which the new commercial enterprise is principally doing business, and provided each individual investment results in the creation of at least ten full-time positions for qualifying employees.”  Moreover, the regulation states that ‘[t]he Service shall recognize any reasonable agreement made among the alien entrepreneurs in regard to the identification and allocation of such qualifying positions.”  See 8 CFR §204.6(g)(2).  The corporate documents for the project should discuss the resulting allocation of jobs among investors in the class/series or new commercial enterprises associated with the project.  However, nothing in the statute or regulations requires costs or jobs to be allocated among the different pieces of the project capital stack.  It is sufficient that the investors have an agreement regarding the allocation of jobs to each individual seeking conditional permanent residence under Section 203(b)(5) of the Act, and USCIS must recognize that allocation pursuant to the regulation.  Thus, jobs created by the new commercial enterprise (through series or classes) or through multiple new commercial enterprises can be allocated to investors simultaneously, with each regional center reporting its share of jobs created annually on the I-924A.

The end result is that, when structured correctly, a project need not wait until their I-924 Application is approved by USCIS to file investor I-526 petitions.  With careful corporate and immigration structuring and planning, an initial tranche of funding through an already approved regional center is possible, serving to advance the project while an I-924 application is pending with USCIS.