US Freedom Capital's primary sales office for EB-5 investments is located in Mumbai, India, where we have established an India based company and carry a full staff of professionals. I visit this office every quarter to work with our team and meet with our existing and prospective investors. Our Indian clients conduct extensive research before deciding to pursue US immigration through an EB5 investment. Recently I have noticed that more and more of our investors are asking for and expecting an exemplar on the project. I have also observed that this requirement is often not well understood or in some instances, is plainly misunderstood. Allow me to provide some clarity on this topic.
When a Regional Center has a project for which they intend to raise EB-5 funds, several actions go into motion. Attorneys draft offering documents, a business plan is written, an economist is hired to draft the economic study for job creation. The regional center may also choose to submit a Form I-924 Amendment for USCIS authorization, commonly called an "exemplar." When the I-924A has been approved, it means that USCIS has approved the methodology used by the specific project. Approval of the project does not occur for several more years after the investor has received their green card. Further, exemplar approval does not mean that USCIS has passed judgment on its investment feasibility, as an exemplar is reviewed only for immigration, and not investment purposes.
There is no way to know how long it will take for USCIS to approve a specific exemplar. Most common is an approval time that is similar to a Form I-526 petition, which is currently averaging approximately 28 months. At US Freedom Capital, we choose to submit an exemplar on our projects, but we know that our project will be fully invested before USCIS approves the exemplar application. We do this so that all project-related questions on an EB5 project can be addressed once by our regional center, rather than on a per investor basis. There is not much value in the exemplar to the investor, rather the value goes to the regional center to ease the processing load.
We have always used a Top 5 immigration law firm to assemble and submit each exemplar, and we maintain a 100% approval track record on these exemplars. Regardless, most of the time while we are offering the EB5 investment our exemplar is 'pending,' that is we have submitted the application and are waiting on USCIS to approve.
It is unfortunate that some other regional centers go out of their way to overemphasize the value of exemplar to potential investors. Of course, what they mean when they say exemplar is an "approved exemplar". This emphasis confuses people and places inappropriate weight on the exemplar feature, taking attention away from more critical decision criteria. Given that it can take two or three years for an exemplar to be approved, one should ask how long the regional center has been attempting to sell this offering why it is taking so long to sell this project.
When an investor files their I-526, they enter a queue and wait for USCIS to review their petition. When a project has an approved exemplar, the USCIS case officer may focus their review on the personal and source of funds sections, relying on the exemplar approval for the project portion. From our experience over many years, there is no guaranty that an I-526 will be reviewed more quickly due to an approved exemplar. We see the same random performance from USCIS with or without an approved exemplar.
Every investor is interested in anything that might speed the adjudication of their I-526, and of course, I understand that sentiment. This is especially true when there are children involved close to age 21 who risk "aging out" if the I-526 takes too long. Thus, some regional centers suggest that their exemplar status makes their project more appealing; hence, the misleading approach to which I am referring. Having an approved exemplar will do its particular part in aiding adjudication of each investors' I-526, but there is no assurance that it will impact the timing of approval. There are many more important factors to consider in your EB 5 decision. More on these factors in future editions of this blog.
Stan Bradshaw, CEO
US Freedom Capital LLC