Thursday, June 15, 2017

USCIS Issues Critical New Guidelines on EB-5 Sustainment, Job Creation, and Effect of Regional Center Terminations

(Source: Wolfsdorf Rosenthal) USCIS updated the USCIS Policy Manual today to provide guidance on the requirement of an EB-5 investor to sustain an “at risk” investment to receive a permanent green card.  This update provides finalized guidance on some of the issues discussed in the August 2015 draft memorandum.  Despite public comment to USCIS being due on June 28, 2017, this guidance is effective immediately, indicating that USCIS is unlikely to change its policy.

The most important updates include: 
  • Once the job creation requirement has been met, the full amount of the investment no longer must be made available to the business(es) most closely responsible for creating the employment upon which the Form I-526 is based. Instead, the capital “is properly at risk if it is used in a manner related to engagement in commerce (in other words, the exchange of goods or services) consistent with the scope of the new commercial enterprise’s ongoing business.”  This means that upon repayment of a loan from a JCE that resulted in the required job creation, the NCE may deploy the repaid capital into one or more similar loans to other entities, or municipal bonds for infrastructure spending, “as long as investments into such bonds are within the scope of the new commercial enterprise in existence at the time the petitioner filed” the I-526.
  • In all cases where further deployment is envisioned, officers review the evidence submitted with the petition to determine whether the petitioner has presented sufficient evidence to demonstrate continuing eligibility with the capital at risk requirement. The investor must show that the capital is, and will remain, at risk of loss and gain and is and will be used in a manner related to engagement in commerce within the scope of the new commercial enterprise’s business. Further deployment of capital that occurs before the immigrant investor becomes a conditional permanent resident must be adequately described in the Form I-526   This flexibility is critical for Chinese investors currently waiting for visa numbers to become available, as their period of conditional residence may not begin for another few years, after completion of the EB-5 project’s specific plan presented in the I-526 petition. 
  • The sustainment period is the investor’s 2 years of conditional permanent resident status. USCIS reviews the investor’s evidence to ensure sustainment of the investment for 2 years from the date the investor obtained conditional permanent residence. An investor does not need to maintain his or her investment beyond the sustainment period.
  • The termination of a regional center associated with an investor’s Form I-526 petition constitutes a material change to the petition.  However, this does not automatically terminate an investor’s conditional permanent resident status.  He or she will have the opportunity to comply with the EB-5 program requirements, including a reliance on indirect job creation.

We are still digesting this important update but are hopeful that these critical clarifications will help guide Regional Centers and EB-5 project developers create more attractive investment options for EB-5 investors.

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