Introduction
Min Wu (00:06)
Hey, everyone. My name is Min Wu and I’m the Head of Sales at CanAm. Today with me is CanAm’s General Counsel, Mr. Walter Gindin.
Walter and his team are behind the glorious 15 I-956F approvals we have received so far under the new RIA. So, I cannot think of a better person to discuss some of the most asked questions our investors have about the I-956F petition.
Walter Gindin (00:38)
I’m CanAm’s General Counsel. I’ve been with CanAm since November of 2014. So, quite a long time.
Min Wu
That’s more than 11 years.
Walter Gindin
More than 11 years. I’ve seen a lot. Experienced a lot of our projects. A lot of successes as part of the company. So, it’s been very fruitful.
I head up our legal department. We have two folks that work with us. Ryan Brown is our Associate General Counsel, and Ann Marie Dalton—I’m sure many of our viewers know she heads up our investment due diligence department.
On the USCIS side, we help put together the I-956F applications, the 526E’s, the 829s. We work with investors and attorneys to make sure that they have all the information and documentation they need to get our investors through the immigration process.
In addition to that, we also work on loan documents, offering documents as well, and we work with outside counsel as needed. So, we’re a busy department.
What is an I-956F Filing?
Min Wu (01:49)
Walter, can you explain what an I-956F filing is?
Walter Gindin
The I-956F is an application for approval of an investment in a new commercial enterprise. It’s basically what we call a project application.
It is the successor to the old 924 applications that existed before the RIA was implemented. So, the I-956F was introduced by the RIA. It’s in section 203B5F, which is why it’s called I-956F, and it is a robust, fulsome application that you have to submit to USCIS as the regional centers and projects submit to get the project itself—with investors investing in—to get that project approved.
Regional centers have to file the F and receive confirmation of the filing and receipt from USCIS before investors can start submitting their petitions.
Min Wu
Right. So that’s actually the first myth—the regional center has to file the F and receive confirmation from USCIS, then investors can file their I-526E petition. As a regional center, we don’t need to wait until that F’s approval for investors to proceed with their personal filing.
Walter Gindin
Yes, that’s right. The F has to be received by USCIS—not actually approved—before investors can start filing. More often than not we have a receipt notice in hand relatively quickly. But because there could be some delays, as everyone may know, several years ago there was this lawsuit and the settlement was introduced that basically allows you to receive alternate proof of filing if the receipt notice is delayed, for example.
So the I-956F has to be filed, and then investors can file. But before an investor’s I-526 can be approved, the I-956F has to be approved. Approval, approval. Filing, filing.
Min Wu
Right. Yeah, that makes sense.
What Documents Are Included in the I-956F Filing?
Min Wu (03:46)
We know that the I-956F is hundreds and hundreds of pages of very comprehensive filing package for the project. But can you help us break down what are the main list of documents in the I-956F filing?
Walter Gindin
Of course. The broad categories of documents are actually written right into the statute.
The main pieces, of course, are the comprehensive business plan. The business plan describes the entire project and investment. So that’s one piece. And the business plan, more often than not, has exhibits to it. So, you have the business plan and you have exhibits of the business plan, which we can go into.
Then you have the job study, the economic impact analysis that you need to submit with the I-956F.
Then there’s the offering documentation, which in and of themselves are hundreds of pages that you have to submit.
There’s usually a separate or along with the economic impact analysis, the TEA letter that you need to submit, whether for a rural project or a high unemployment project and so on.
You have to also submit any SEC filings that are made in connection. For all of our offerings, for example, we file a Form D for raises within the United States. So, we have to submit the Form D. It has to be accepted by the SEC. And then we file proof of that.
We also submit escrow and administrative agent documentation as well. So, we have an admin that helps us and monitors all of the flow of funds that is required under the program.
So, it’s quite a robust application. The business plan, the job study, and the offering documents are really the big pieces of it that are critical.
What Aspects of the Filing is USCIS Scrutinizing?
Min Wu (05:55)
There’s a list of documents as you describe that we have to prepare. But can you also share with us a little bit more—when USCIS is looking into these documents, such as a business plan and job study, what are the key aspects they scrutinize to decide if this project meets the new RIA requirement or not?
Walter Gindin
Sure. On the business plan side, what’s interesting is that the fundamental requirements of what USCIS looks for post-RIA and pre-RIA haven’t really changed that much. They still—and we’ve received notices—and they still ask for the business plan to be what’s called Matter of Ho compliant.
It has to be comprehensive. It has to be credible. The credibility of the business plan is critical. And that is project-specific in a lot of regards. Every project that puts out is different. And everyone who puts together a business plan needs to know what are the key features and components of that particular project that we must document and prove to show that it’s more than likely going to go forward.
That it’s not just some—you’re not going out on a whim or hoping that the project will go forward, but the project will actually start. Whether or not it’s successful, we don’t know. But at the very beginning, you have to prove that there’s enough pieces in place to make this project successful.
So, what is USCIS—in our experience, what are critical components for us when we put together one?
Capital Stack
Fundamentally, capital stack. If you’re putting together a business plan for a deal and there’s a capital stack—maybe EB-5 is a piece of it, maybe there’s a senior loan, there’s equity, or maybe there’s some sort of government financing—you have to show that the pieces are there, ideally at the time that you’re submitting it. So, when USCIS opens that application they’re like, “Okay, so at least you have the financing in place or commitments in place to do the project.”
If those commitments aren’t in place at the time of filing, which tends to happen, it’s very important to have a reasonable plan and a relatively short time period to get those in place. Because what often happens is if the financing is not in place at the time you file, USCIS will issue maybe an RFE, maybe they’ll issue a NOID if they have less patience. They want to give time, and they will ask for it. Is it in place?
So, if it’s not in place at the time of filing, it is critically important there’s a plan—that you’re not going to be waiting a year or two years, because that inquiry from USCIS can come really quick. And if you can’t respond to it, there’s going to be an issue. So financing is critical.
Budget and Schedule
Also, they want to understand that the budget and the schedule are reasonable. What the budget and the schedule will tie into the jobs, and the economic impact analysis, which I’ll get to.
They want to show—they want to understand that that is reasonable, that the cost to build and the time to build is something that’s reasonable. So, a lot of the time we work with our development sponsor who also works with a general contractor to provide not only the budget but the schedule that’s the basis for it, but also to provide some sort of letter or some other—in our estimate at this time, the budget and the schedule are reasonable. That’s really important.
Permits
Permitting—permits are very important because you want to show that you have the approvals, governmental approvals, local—whatever is required to actually come in to start work. If you can’t do that, USCIS will typically ask for it. So, that’s very important.
Sponsorship and Expertise
We describe the sponsorship, the expertise behind a project that goes into our offering and into all of our business plans, because USCIS also wants to see that the people—we are a regional center, we’re a lender, we’re not a developer—but they want to see that there’s expertise behind the project that is going to see it through.
So, on the business plan side, those are some of the big features that are important that we try to address in every one of our applications.
Job Study
And then, of course, in the job study, those rules have changed quite a bit since the RIA was enacted. There’s a certain way that you can calculate jobs. So, we want to make sure that depending on the budget and depending on the schedule, the analysis itself is consistent with what’s required. USCIS will still focus on the credibility of the business plan and also the credibility of the economic impact analysis.
Why Does CanAm’s Project Package Take Longer to Produce?
Min Wu (10:59)
And I can feel your team’s work is getting more conservative. That’s why when a lot of our investors ask us, “Why does it take so long for CanAm’s project package to be ready?” That’s what we try to explain to them—we try to show USCIS how ready the project is, and we don’t want to put any project on the market or file the petition to USCIS unless we feel comfortable that every element of the project is almost ready, at least.
Walter Gindin
Exactly. That’s 100%. The benefit—or what I think gives us a little bit of an advantage, or maybe not advantage, but what the benefit to us is—I’m not a business plan writer by trade, and there are other business plan writers in the EB-5 industry that do a fantastic job.
But I think one of the things that we benefit from is that when we write these plans, because we are working with our project development department from the very beginning, we truly understand what this project is all about from the very beginning, all the way until we file the F.
So, we’re able to put together an application that speaks to that particular project, because we start it from scratch, and then we take it all the way forward.
And yes, we try to make sure that we cover—in our experience, in my experience having done this for almost 12 years and seen adjudications—we have a decent sense of what USCIS will want to see.
And of course, our primary goal is to get that approval without an RFE, without a NOID. And we want to give them the most comprehensive, credible application, because that is how we interact with the agency.
We don’t want to hide anything. We want to be transparent. And if something’s not available, we explain why. But we also explain—we try to be very forthright. And the way that they see that we’re forthright—and hopefully that they see it and they’ve been successful in that regard in getting these approvals—is by giving them the information that they need to actually approve and being fully transparent and understanding.
So, if it takes a little bit longer, there’s a reason for it.
Min Wu
It’s worth the wait.
Walter Gindin
It’s worth it.
Min Wu
It’s worth the wait for sure. I also just want to pass on a compliment that we often receive from the immigration counsel that we work with who represent these investors. They always tell us that whenever they receive the project filing package from CanAm, they know the package is so well put together, so organized.
And I think that’s all because of you and your team’s hard work at CanAm.
Walter Gindin
Yeah. Thank you. It’s been—we try to be consistent with our partners, our attorney partners, our investors, with USCIS. Show that we’re giving you a consistent product. You know exactly what you’re going to find. It’s organized in more or less the same way each time. So, you can sort of—if you’re looking for an answer, hopefully you’ll be able to find it in the exact place that it was last time for a new deal. So yeah. Thank you.
What Are the Key Reasons for I-956F Denials Under the RIA?
Min Wu (14:20)
There has been data showing an increased percentage of projects that’s been denied under the new RIA. I think if I remember correctly, the IIUSA data actually showed up to 25% of projects have been denied. That’s quite concerning.
Can you share with us what are the key reasons you think these denials are happening and why? How does CanAm navigate or avoid these pitfalls?
Walter Gindin
Yeah. I haven’t personally seen some of the denials, but just anecdotally, I think certainly if there are pieces of the application that are, for example, missing—the capital stack, or maybe there’s questions regarding the budget or the schedule that regional centers might not be able to answer in the time that USCIS affords them.
It’s also possible that there are some financing structures that are perhaps more unique than what USCIS is used to in terms of how the money goes in, when it goes in, how it’s raised, and what the interaction is between the NCE and the JCE.
I think we try to—we don’t really try to reinvent the wheel. Even though we have a variety of different types of projects—not everything is real estate. We have broadband, we have gas exploration, and all these different types of projects. The asset class has changed. But fundamentally, the way that we deploy that capital—as a loan with a term, covering expenses going forward—we don’t really harp on bridge financing issues all the time.
So we try to make it—we know what works within EB-5 after all of these years. As you know, early on, we had to go through—when Tom and Christine first started, there was all this pushback. But over the 30 years of CanAm’s history, we sort of know and understand what works for EB-5. And so, we try to stick within that box even as projects change.
And that’s been consistent both in our applications and our project development meetings and underwriting and how we source deals. We don’t want to be the regional center that starts something new. We want to continue what has been working.
Min Wu
Right. The early days of trial and error—let’s start over. Let’s put it that way.
Walter Gindin
Right. And also just to add, we don’t do it all ourselves.
If there is something—if there is expertise that we need or second or third opinions—we have good relationships with very experienced EB-5 attorneys and very experienced corporate attorneys that help us understand structure and put things together. Collectively, we can be confident we’ll be successful.
Will the Trend of Increased I-956F Approval Times Continue?
Min Wu (17:41)
We just received our 15th 956F approval. That’s for a very high-profile project—the Four Seasons in Telluride.
We have over the years seen the approval time for the project actually be very decent, very encouraging. I would say most of our projects are approved within four to nine months.
Do you—I know this is a completely speculating question—do you see the trend continue?
Walter Gindin
I think so. I think that especially for rural projects—the Four Seasons was a rural project in the area—those types of projects, they’re supposed to be prioritized by USCIS because there’s an incentive, a need to build within the rural areas that’s built into the RIA.
And so those projects we’ve seen actually have been certainly adjudicated faster than historical average, which is good. And even the high unemployment deals—everyone doesn’t remember back in the day, it took two to three years to approve any project, rural or high unemployment.
And now they’re probably within that year range, which is not bad, all things considered.
So, I’m hoping it continues. I think that USCIS has shown that it has the ability and the capacity to continue these faster adjudications.
And our job is to make it straightforward for them, to make them feel good about approving something, because we’ve given them an application that is comprehensive, that is credible, that hopefully addresses all of the questions that they have, at least at the initial stage.
