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EB-5 News Archive for July, 2012
USCIS held an EB-5 Stakeholders’ call on July 26th 2012, where a number of pressing issues were addressed by a USCIS attorney who was present on the call.
Highlights of the call:
I-924 Application for Regional Center under the Immigrant Investor Pilot Program
Applicants of I-924 petitions that were denied will be given an opportunity to appear personally before a Review Board composed of two supervisory USCIS officers and once USCIS economist. This information becomes very relevant as the number of applications for Regional Center designation have risen substantially in the last 24 months.
Preferred Equity v. Loan Based Investment
When asked if standards for investment where different for preferred equity investments versus loan-based ones, USCIS responded that an equity investment must be first made in the Newly Created Entity (NCE), but that the NCE could invest or loan the funds to the job creating entity (JCE).
EB-5 capital with non-EB-5 capital such as bank loan
USCIS reiterated that it understands business realities, and one of those realities is that other sources of financing are needed to capitalize projects also using EB-5 funds. USCIS also said that, although EB-5 is flexible, evidences such as an executed loan agreement or commitment letter, letters from prospective lenders, and all documentation showing likelihood that non-EB-5 financing will be secured should be submitted for review.
Return on Investment during Temporary Residence Period
As long as the return on investment is derived from the operating profit, the return on investment is acceptable. Return of principal invested is not acceptable.
Receiving a condo or Real Estate as Return on their Capital Investment
Although there is no prohibition in EB-5 law, denials were issued on petitions where investors were to receive condos as a return on of their investment. ACQUISITION OF REAL ESTATE DOES NOT RESULT IN JOBS. Investment structures where EB-5 investors are guaranteed to receive condos or real estate do not fall under the “at risk” requirement imposed by law. As such, the condo or real estate is seen as a guarantee.
Exclusive Visas Comment – It is important to note that this is not the same as a loan based investment where the limited partnership has a lien on a property.
Hotel Projects
Market studies needed to support hotel projects do not have to performed by an individual in specific, and should focus on quality and not whether the economist performing the study has done a market study of the kind.
In his closing remarks, USCIS Director Alejandro Mayorkas emphasized USCIS’ commitment to the EB-5 program and job creation, and the need for predictability in the adjudication of petitions. A memo with guidance towards a series of the issues left unresolved in the call is expected, but no release date was announced.
The EB-5 process can be overwhelming, with many important decisions to be made by the applicant in an ever-changing environment. Exclusive Visas thoroughly researches all Regional Center projects in the United States, and endorses only those projects that meet our rigorous standards. When you hire Exclusive Visas, we hold your hand from the moment you begin considering which Regional Center program to invest in, until the day you receive your permanent green card. You will be assigned a personal concierge to liaise between your Immigration Attorney, and the Regional Center throughout the entire process.