On Nov 14 2013 by H. Ronald Klasko

Regional Centers for Sale

The EB-5 Reform and Integrity Act of 2022 brought many changes to the EB-5 program. For the latest information, please click here.

I recently represented clients in two proceedings before the new USCIS Decision Board.  One involved an ultimately successful exemplar I-526 petition and regional center designation based upon tenant occupancy jobs.  I will report on that in my next blog.

The other involved the sale of a regional center.  Based upon that case, I can state somewhat more confidently than before what I believe the USCIS position to be in this murky subject matter area.

The USCIS position appears to be that the acquisition of a regional center can be accomplished by the purchase of stock, but not by the purchase of assets.  USCIS has not stated a legal basis for this conclusion, nor has it suggested the ramifications of a completed asset purchase.

Assuming the stock of a regional center is purchased, is there a necessity to file a regional center amendment application?  The USCIS position appears to be that such an amendment application is optional.  That position is consistent both with the instructions to Form I-924 and with the May 30, 2013 comprehensive policy memorandum.  Both reference the possibility – but not the requirement – of filing an amendment application to notify USCIS of a change in the “organization or administration” of the regional center.  A change in stock ownership is not a change in organization or administration.  However, if there are new owners of the regional center, there probably is a change in the organization or administration.

Should the optional amendment application be filed?  The answer may not be the same in every context.  Counsel should be consulted on this decision.

If there is a change in the organization or administration and the regional center opts to file an amendment application, does the pendency of the amendment application prevent the regional center from doing business as usual, including marketing for investors and having investors file I-526 petitions?  The USCIS position appears to be that the regional center can do business as usual while such an amendment application is pending.

I want to emphasize two points.  First, what I purport to be the USCIS position is extrapolated from statements made by USCIS during the course of RFEs, NOIDs and ultimately a decision from the Decision Board.  None of these is precedential, nor were these positions ever clearly stated.  Rather, the USCIS position appears to be evolving.

Second, different regional center designation approval notices have different language regarding changes in ownership.  A regional center seeking to be sold, and individuals or companies seeking to acquire a regional center, should review the language in the regional center approval notice and consult with counsel prior to making a decision on the appropriate course of action.