On 20 December 2012, U.S. Citizenship and Immigration Services (USCIS) issued a Guidance Memorandum (GM) (GM-602-0001) to all USCIS employees addressing the “tenant-occupancy” methodology of establishing job creation in EB-5 cases. Through Requests for Evidence (RFEs) issued since February 2012 to a number of outstanding Regional Center applications who relied on the tenant-occupancy methodology, USCIS has sought evidence that the projected jobs attributable to prospective tenants who would occupy commercial space created by the EB-5 capital would represent newly created jobs, as opposed to jobs that the tenant had merely re-located from another location. In regional center cases relying upon the tenant-occupancy model, USCIS requires evidence that the claimed jobs result, directly or indirectly, from the economic activity of the EB-5 commercial enterprise, and it is emphasized in the GM that jobs that are re-located rather than created do not count. To show indirect job creation, applications and petitions must project, using economically and statistically valid forecasting tools, the number of newly created jobs that would not have been created but for the economic activity of the EB-5 commercial enterprise. This is determined on a case-by-case basis and requires an evaluation of the “verifiable detail provided and the overall reasonableness of the methodology as presented.”

Alternatively, for applicants or petitioners utilizing a facilitation-based approach to showing tenant job creation, USCIS “will not require an equity or direct financial connection between the EB-5 capital investment and the employees of prospective tenants.” Instead, such applicants/petitioners must demonstrate that the economic benefits provided by a specific space project “will remove a significant market-based constraint.” The GM identifies ways that such applicants/petitioners could make such a showing.

Finally, for regional centers that are ultimately approved based on tenant-occupancy projections, the approval notices will include certain language regarding the assumptions underlying the approval. Such language will provide guidance to adjudicators at the I-526 and I-829 stages. Detailed information about the GM is available at http://aila.org/content/default.aspx?docid=42637

Elizabeth Edgar