EB-5 Policy Cautions--Part III: Commitment to Invest Rather Than Mere Intent to Invest or Speculation About Investing

by Joseph Whalen

EB-5 Policy Cautions--Part III: Commitment to Invest Rather Than Mere Intent to Invest or Speculation About Investing

By Joseph P. Whalen (June 3, 2013)

The May 30, 2013, EB-5 Policy memo states as follows:

“It is important to note that at this preliminary Form I-526 filing stage, the immigrant investor must demonstrate his or her commitment to invest the capital but need not establish that the required capital already has been invested; it is sufficient if the immigrant investor demonstrates that he or she is actively in the process of investing the required capital. However, evidence of a mere intent to invest or of prospective investment arrangements entailing no present commitment will not suffice . 8 C.F.R. § 204.6(j)(2); see Matter of Ho, 22 I&N Dec. at 210. Similarly, at this preliminary stage the immigrant investor need not establish that the required jobs already have been created; it is sufficient if the immigrant investor demonstrates in a business plan that it is more likely than not that the required jobs will be created. 8 C.F.R. § 204.6(j); 8 C.F.R. § 204.6(m).” At p. 21

The above stated requirement is not new. Prior to the codification of the employment-based fifth preference immigrant visa (EB-5) via IMMACT90 (Immigration Act of 1990) and subsequent amendments, this concept already existed for an earlier incarnation of the “investor visa”. That prior version was really a “labor certification exemption” for “other qualified immigrants”. See 8 CFR § 212.8(b)(4), promulgated at 31 FR 10021, July 23, 1966; 31 FR 10355, Aug. 22, 1966, and as amended at 34 FR 5326, Mar. 18, 1969.

The original version of 8 CFR § 212.8 stated, in pertinent part:

(b) Aliens not required to obtain labor certifications. The following members are not considered to be within the purview of section 212(a)(14) of the Act and do not require a labor certification: ....... (4) an alien who will engage in a commercial or agricultural enterprise in which he had invested or is actively in the process of investing a substantial amount of capital.

In addition, earlier Precedent Decisions already addressed this situation and took the same position on the subject matter.

Matter of Shon Ning Lee , 15 I&N Dec. 439 (BIA 1975), Decided by the Board August 26, 1975, aff’d, Shon Ning Lee v. INS, 576 F.2d 1380 (9th Cir. 1978) or No. 77-2681 (June 13, 1978).

From the Ninth Circuit:

“The major issue is whether the motion to reopen is a new application or a renewal of a previously denied application. If it is a renewal, as Lee argues, a visa could be available to Lee. If the former, the BIA was correct in finding Lee ineligible for resident status. We have concluded that Lee's motion to reopen was a new application.” At ¶ 2

“On April 3, 1973, Lee filed with the District Director an application for permanent resident status. A previous application, not relevant here, had already been denied. In this application, Lee sought admission as a nonpreference immigrant who was exempted from the labor certification requirements of 8 U.S.C. § 1182(a)(14) on the ground that she was an alien investo r within the purview of 8 C.F.R. § 212.8(b)(4). The District Director found that Lee was not entitled to the claimed exemption because she had not invested in and was not actively in the process of investing in a commercial or agricultural enterprise. 8 C.F.R. § 212.8(b)(4). He denied the application.” At ¶ 6 [Emphasis added.]

“At oral argument before the BIA in December 1974, Lee's counsel stated that Lee owned no business at the time of argument and that no business relating to Lee was identifiable. Nine months after argument, in August 1975, the BIA affirmed the denial. During this nine-month period, visas for Chinese nonpreference immigrants apparently became available on three occasions.” At ¶ 8

Lee claimed that she was “looking for a suitable investment” and by that mere assertion she should be viewed as “actively in the process of investing”. She claimed that on the advice of her attorney she should only commit to an investment after obtaining her LPR status. Neither the INS, BIA, nor 9th Circuit agreed with her “attorney’s advice” or that particular interpretation of an investor’s visa eligibility requirements.

Her later allegation that she had actually invested in November, a month prior to the last BIA hearing (which heard oral argument from her so-called attorney in December) and was therefore entitled to recapture an earlier priority date was found unacceptable (and dubious). The Court (and everyone with half a brain) questioned why that information, if it was true, would conceivably have been withheld from the last BIA hearing in December 1974.

“On February 25, 1976, the BIA received the motion to reopen in question here. The motion attempts to demonstrate once more Lee's entitlement to permanent resident status as an alien investor and shows that Lee had actually purchased a business in November, 1974, one month before the oral argument mentioned above. The BIA treated the motion as a new application for permanent resident status with a filing date of February 25, 1976. Under the terms of 8 U.S.C. § 1255, the BIA found that Lee was not eligible for permanent resident status because a visa was not available to her on this filing date.” Id. at ¶ 9 [Emphasis added.]

BIA Decision at: http://www.justice.gov/eoir/vll/intdec/vol 15/2424.pdf

9th Circuit Decision at: http://openjurist.org/576/f2d /1380


Matter of Khan , 16 I&N Dec. 138 (BIA 1977), Decided by the Board March 15, 1977. The respondent moved to reopen his deportation order in order to apply for adjustment as an investor.

At that time, he had demonstrated that he had invested $8,600.00 which was less than the required minimum of $10,000.00. He argued that he was “ actively in the process of investing” additional funds and “should be given a reasonable period of time to complete the investment” at p. 140.

He could not show any evidence of any future commitment in connection with that claim. He presented no “copies of contracts showing a legal commitment to make certain expenditures, or similar items” at p. 141. The burden of proof rests on the alien and the evidence must be unambiguous, any doubts will be resolved against the “investor”, Cf. Shaw and Ahmand.

The IJ’s DENIAL was upheld and the Appeal was DISMISSED.

Above found at: http://www.justice.gov/eoir/vll/intdec/vol 16/2565.pdf


Matter of Lee , 15 I&N Dec. 408 (BIA 1975), Decided by the Board July 28, 1975.

Assuming arguendo that a promissory note could be counted, this one failed miserably due to its conditional basis. Lee only invested $5,000.00 in a restaurant and put up a “promissory note” for an additional $5,000.00 but only payable under the condition that he gains adjustment of status first.

In addition, he was employed there as a cook. His employment placed him in direct competition with American labor and was disqualifying for any “investor” at that time. This was an obvious attempt to circumvent the labor certification process and use the “investment” as a conduit for his own entrance into the job market improperly and without an unattainable labor certification.

The IJ’s DENIAL was upheld and the Appeal was DISMISSED.

Above found at: http://www.justice.gov/eoir/vll/intdec/vol 15/2415.pdf


These are but a few of the older, pre-EB-5, Precedents that simply go to reinforce what was made more substantial via the EB-5 regulations and the later (1998) EB-5 Precedents.

In sum, the clarifications in the May 30, 2013, EB-5 Policy Memo need further clarifications themselves. The latest blurb(s) from a Policy Memo need(s) to be considered along with (not instead of) the existing body of administrative and judicial legal interpretations as well as the controlling statute(s); and implementing regulations.

About The Author

Joseph Whalen is not an attorney. He is a former government employee who is familiar with the INA. His education is in Anthroplogy with a concentration in Archaeology and has both a BA (from SUNY Buffalo) and an MA (from San Francisco State University) in Anthroplogogy. He previously worked as an Archaeologist for the U.S. Forest Service before becoming an Adjudicator with INS which became USCIS.

The opinions expressed in this article are those of the author(s) alone and should not be imputed to ILW.COM.