What is the I-956F Form?

Why is it important for EB-5 investors?

Project Approval Application

Form I-956F is an “Application for Approval of an Investment in a Commercial Enterprise”. In layman’s terms, it is the application that a Regional Center submits to the “US Citizenship and Immigration Service” (USCIS) for an EB-5Project’s approval. This form, mandated by the EB-5 “Reform and Integrity Act of 2022” (RIA), requires detailed information about the Regional Center, the Investment Partnership (aka “New Commercial Enterprise”, NCE), and the Project (aka, “Job Creating Entity”, JCE). It ensures projects align with USCIS regulations, detailing the business structure, purpose, management, and job creation plans.

It Validates Job Creation Potential

In essence, when the I-956F Application is approved, every EB-5 investor may rest assured that their I-526-E Petition will be approved as long as their source and path of EB-5 funds is approvable.

The I-956F approval is critical as it attests that the job creation estimates are methodologically sound and credible. This validates that enough jobs will be created if the project proceeds according to plan. Since the creation of at least 10 full-time jobs is a main requirement for permanent residency, having enough jobs is essential for every EB5 investor’s success in removing their two-year conditional residency status and getting their Permanent Green Card at the I-829 Petition stage.

Reserved Visa Category and Reduced Investment Amount

The approval also certifies that the project qualifies for the Reserved Visa category it has applied for, whether it be a Rural or High Unemployment Targeted Employment Area, or Infrastructure project, and therefore qualifies for the reduced investment of $800,000, instead of the standard investment of $1,050,000. An added bonus is that if the project qualifies as a rural project is thatthe I-526E applications related to it will receive Priority Processing and should expect a target turnaround time of only four months.

SEC Compliance

The I-956F project approval also verifies the legitimacy and compliance of a project with USCIS regulations and “US Securities and Exchange Commission” (SEC) rules, enhancing investor confidence by demonstrating that the project has undergone rigorous scrutiny.

A Game Changer

Prior to the introduction of the Reform and Integrity Act (RIA), the EB-5 visa program operated under less stringent regulatory frameworks, which occasionally led to inconsistencies and challenges in the management and oversight of investments. The RIA was introduced to address these issues by implementing more rigorous standards and procedures to enhance transparency, accountability, and the integrity of the EB-5 program. This legislation has significantly reformed the way regional centers and new commercial enterprises are vetted, monitored, and required to report, ensuring that EB-5 investments better serve economic development objectives and protect investor interests.

For instance, although there was a form available (the old I-924 form) that a Regional Center could utilize to present a project to USCIS, it was not compulsory to file it before opening a project for subscription. Historically, only 80% of I-526 petitions were approved, often due to project deficiencies that USCIS might have identified had the projects been submitted for review beforehand. This type of rejection is entirely different from a deficiency related to the source or path of funds. In other words, many investors were receiving I-526 denials for reasons well beyond their control.

Now, the RIA mandates that a regional center must submit an I-956F form before an investors can submit the green card petition.. Beware, however, that not all projects in the market have been approved, as the law only requires that Form I-956F be submitted prior to an investor submitting the green card petition, and project approval may take longer than a year. Investors in said projects may still receive the unpleasant surprise that their I-526E Petitions were rejected because the project’s I-956F had been denied.

Insist on an Approved Project

An EB-5 investor should insist on investing in a project with an approved I-956F because this approval signifies that the U.S. Citizenship and Immigration Services (USCIS) has thoroughly reviewed and validated the project’s business plan, economic impact analysis, and overall compliance with EB-5 program requirements. The I-956F approval ensures that the project has met stringent standards for viability and job creation potential, critical factors that influence the success of the investor’s visa application. Without this approval, there is a higher risk of project failure or non-compliance with USCIS regulations, which could lead to delays or denials in the immigration process.

Furthermore, an approved I-956F project provides a layer of security for investors, protecting their interests and investment. It shows that the project is more likely to fulfill the job creation requirements necessary for investors to ultimately obtain their permanent residency in the U.S. This assurance is vital as it aligns the project’s success directly with the investor’s goal of securing an EB-5 visa, minimizing the risk of unforeseen legal or financial complications that could jeopardize the investor’s immigration status and capital investment.

Another advantage is faster processing as the USCIS requires that the I-956F form be approved before they can start approving I-526E petitions. We are seeing a three-to-six month timeline for rural I-526E petitions through priority processing and as a result of increased USCIS processing efficiency.

I-956F Contents

The I-956F is an extensive form that demands numerous supporting documents and is crucial for EB-5 regional centers and project developers seeking approval under the EB-5 Immigrant Investor Program. Below is an outline of the essential elements typically required in the I-956F Form:

1. Regional Center Information: Details about the regional center filing the form, including its designation number and compliance with USCIS regulations.
2. New Commercial Enterprise (NCE) Details: Information about the new commercial enterprise for which the EB-5 capital will be raised, including business structure, purpose, and management.
3. Job Creating Entity (JCE) Information: Details about the job creating entity, which may be the same as or different from the NCE, including how it will create the required number of jobs.
4. Business Plan and Economic Analysis: A comprehensive business plan that meets the “Matter of Ho” requirements. Matter of Ho is a pivotal precedent decision by the USCIS that establishes specific standards for the business plans of EB-5 visa petitions. It requires that business plans be comprehensive, credible, and detailed, demonstrating how the proposed enterprise will realistically meet the job creation requirements of the EB-5 program.
5. Investment and Offering Documents: This includes the private placement memorandum, subscription documents, and the partnership or operating agreement detailing the investment offering and terms.
6. Compliance and Monitoring Procedures: Description of the internal policies and procedures put in place to ensure compliance with securities laws and EB-5 program requirements.
7. Certification of Compliance: A certification that must be signed by the regional center and the NCE confirming their compliance with all applicable laws and regulations.
8. Evidence of Fund Administration or Annual Audits: Documentation proving that a fund administrator is engaged to manage the EB-5 funds, ensuring transparency and adherence to the legal use of the funds. Projects can opt for an annual audit instead of engaging a fund administrator.
9. Targeted Employment Area (TEA) Designation: If applicable, documentation supporting the designation of the project location as a TEA, which can be either a rural area or an area with high unemployment.
10. Legal and Regulatory Compliance: Information demonstrating adherence to all relevant legal and regulatory frameworks, including securities laws and any regional center-specific regulations.

These components ensure that the project is viable, legally compliant, and capable of fulfilling the job creation requirements necessary for the success of its EB-5 investors. Each section of the form must be completed with precise and accurate information to avoid delays and ensure the approval of the USCIS.

Houston EB5 Approved Project: “The Frederick”

Houston EB5 proudly announced the I-956F Project Approval for The Frederick on March 15, 2024. This significant achievement not only verifies The Frederick’s adherence to the EB-5 Immigrant Investor Program regulations but has also led to a rapidly increasing number of I-526E approvals, beginning with 12 approvals in its 8 first weeks.

The I-956F approval for The Frederick represents more than a regulatory milestone; it acts as a green light for investors pursuing the American dream via rural investment. This certification establishes a sure path for the approval of all I-526E Petitions for Conditional Residency connected to The Frederick, subject to the investor’s validation of the Source and Path of Funds.

The Frederick project in Fredericksburg aims to develop the last remaining parcel of land on Main Street, this mixed-used development will meet the unmet and burgeoning demand for luxury resort, residential, and retail space. Spanning 22 acres, the site has been meticulously planned to maximize efficiency, space, and amenities, creating a landmark destination in the city. Reflecting the architectural diversity of Fredericksburg, each component of the development is designed with a unique style that harmonizes with the local aesthetic, ensuring a visually cohesive yet varied environment.

Frederick estimates that the creation of over 3,500 jobs, many more than the 820 required, is eligible for the 20% set-aside for Rural Project visas, priority processing, and concurrent filing for all countries at the end of May 2024, when this article was written.

Reasons to Invest in The Frederick

Streamlined USCIS Processing: The I-956F approval guarantees a more efficient and expedited immigration process, significantly cutting down I-526E petition processing times to just 3-6 months.

Strategic Location: Capitalize on the city’s significant visitor traffic and its proximity to Austin and San Antonio, two of the nation’s rapidly expanding metropolitan statistical areas (MSAs). Being near these MSAs means lower construction costs and access to a larger target market compared to rural projects located hundreds of miles from a major city.

Vertically Integrated Developer and Regional Center: As both a regional center and developer, our partnership with DC Partners aligns our financial interests directly with those of our EB-5 investors: we can only succeed after you do.

Maximizing EB-5 Investment Success with In-depth Rural Area Data

The significance of choosing an EB-5 investment project in a rural area with strong growth prospects is crucial. Unlike urban projects, where data is more accessible, rural investments demand thorough research to identify opportunities that not only promise a high potential for return of capital but also benefit from priority in EB-5 processing.

HeartlandForward.org, a prominent think tank dedicated to the economic revitalization of the American Heartland, has carried out extensive research to pinpoint the Most Dynamic Micropolitan Areas. These areas are celebrated for their resilience, economic diversity, growth prospects, connectivity, and appeal as regional tourism destinations, positioning them as ideal targets for rural EB-5 investments.

The Frederick, located in Fredericksburg, Texas, captures these desirable traits, situated less than an hour and a half’s drive from the quickly growing metropolitan areas of Austin and San Antonio. Its proximity to these large urban centers reduces construction costs and provides access to a broad market, vital for the success of any rural EB-5 project. Please visit our blog to explore the top rural areas for EB-5 investments and to grasp the critical factors that contribute to project success.

Houston EB5 encourages investors to take advantage of this exceptional opportunity. With only a few investment spots left, now is the perfect time to secure your position in a premier rural EB-5 project. Come be a part of building a legacy of prosperity and success in a town rooted in immigrant heritage with The Frederick.