A complaint business plan is key element used in an investor’s I-526 or I-526E petition. USCIS will review the investment project business plan to determine whether the investor is likely to meet EB-5 eligibility requirements.
A business plan is critical to Offering Documents
While USCIS will simply review an EB-5 business plan from an immigration compliance perspective, investors should review the business plan with regard to the likelihood of immigration success and financial success.
The business plan can help in this regard by detailing the business concept and management group, revising the current market, and by offering projections for development and operations and financial potential.
The business plan will predict that a specific amount of EB-5 investment will be used at specified time for a specified purpose, and create a specific number of jobs by a certain time. The business plan predictions must be supported by industry standard metrics and market research.
A business plan must also meet the standard defined as “Matter of Ho compliant.” This refers to the EB-5 precedent decision Matter of Ho, which offers the following direction:
“A comprehensive business plan as contemplated by the regulations should contain, at a minimum, a description of the business, its products and/or services, and its objectives. The plan should contain a market analysis, including the names of competing businesses and their relative strengths and weaknesses, a comparison of the competition’s products and pricing structures, and a description of the target market/prospective customers of the new commercial enterprise. The plan should list the required permits and licenses obtained. If applicable, it should describe the manufacturing or production process, the materials required, and the supply sources. The plan should detail any contracts executed for the supply of materials and/or the distribution of products. It should discuss the marketing strategy of the business, including pricing, advertising, and servicing. The plan should set forth the business’s organizational structure and its personnel’s experience. It should explain the business’s staffing requirements and contain a timetable for hiring, as well as job descriptions for all positions. It should contain sales, cost, and income projections and detail the bases therefor.”
Best practices also advise that a business plan should avoid excessive length, and excessive precision that precludes the flexibility to change in the future.
Objective claims in a business plan (land ownership, permits received, contracts signed, etc.) must be verifiable with documented evidence. Projections in a business plan must also be supported by independent evidence that make those projections reasonable.
Who creates the business plan?
The NCE will hire a consultant to create the EB-5 compliant business plan. In a direct investment, the investor generally finds a consultant and must pay for the plan.
What Should an EB-5 Business Plan Include
The essential components of a EB-5 business plan are:
Executive Summary: This section provides an overview of the entire business plan and should include the project's primary objectives, a description of the business, and a summary of the investment opportunity.
Company Description: This section outlines the history and structure of the company, including the legal structure, ownership, and management structure.
Market Analysis: This section describes the industry and market in which the business will operate, including market size, growth trends, and target market segments.
Marketing and Sales Plan: This section outlines the marketing and sales strategy for the business, including the promotional tactics and the pricing strategy.
Financial Plan: This section provides a detailed analysis of the project's financials, including revenue projections, cost estimates, and a break-even analysis.
Organizational Plan: This section outlines the organizational structure of the business and the roles and responsibilities of the key personnel.
Risk Assessment: This section identifies and assesses potential risks to the business, including market risks, operational risks, and financial risks.
Exit Strategy: This section outlines the exit strategy for the EB-5 investors, including the proposed timeline and method of repayment.
Matter of Ho concludes with this point
“Most importantly, the business plan must be credible.”
USCIS will judge credibility based on independent evidence.