USCIS Releases EB5 Investor Policy Memo
The U.S. Citizenship and Immigration Services (USCIS) is continuing efforts to improve the EB5 immigrant investor visa program, as evidenced by the release of a new policy memorandum that is intended to clarify gray areas in the law and eliminate some of problems historical for EB5 applicants, particularly with regard to applications filed through regional centers. The USCIS memo also reemphasizes that adjudicating officers should review EB5 petitions in light of the spirit of the EB5 program - that is, to promote investment in the United States and create jobs for U.S. workers. An overview of the EB5 program, including eligibility requirements, is available in the MurthyDotCom NewsBrief, EB5 Regional Center Program Extended to September 2015 (22.Oct.2012).
Draft Memo on EB5 Issued in December 2011
This recent memo is the finalized version of a draft released by the USCIS in late 2011, as detailed in our December 2011 NewsBrief, USCIS to Improve EB5 Immigrant Investor Program (16.Dec.2011). The USCIS released the draft memo with the intent of having attorneys, applicants, and other stakeholders review the document and provide feedback. The USCIS incorporated much of this feedback into the final version of the memo, which was released on May 30, 2013.
Flexibility for Business Changes After Conditional Residence
One major improvement to the program is an alteration in USCIS's interpretation of the regulations that will provide for greater flexibility when changes occur in an EB5 business. Per the new memo, once a foreign national has been admitted as a conditional resident, based on an approved Immigrant Petition by Alien Entrepreneur (I-526 form), subsequent material changes to the business do not automatically prevent the conditions from being removed at the final I-829 stage. However, if a material change to the business occurs prior to the foreign national's admittance as a conditional resident, then a new I-526 generally is still required. The investor must, in good faith, intend to follow the plan submitted in support of the EB5 visa application. However, this change allows for flexibility to adapt to business realities after admission as a conditional permanent resident.
Clarification on Certain Financing Issues
The memo also provides clarification on a variety of concerns, such as bridge financing and funds held in escrow accounts. In addition, it explains that the EB5 requirements can be met through capital invested in a single enterprise that is then spread across a portfolio of wholly owned businesses.
Improvements for Regional Center Applications
Perhaps the most significant improvements to the program are aimed directly at cases affiliated with designated regional centers, which comprise the vast majority of EB5 filings. The requirements for job creation when investing in a regional center are different from investments in businesses that are not part of the regional center program. The memorandum clarifies the standards to be used when the regional center establishes eligibility for participation in the EB5 program based on projects that are hypothetical.
While it is possible to obtain a designation as a regional center, based on a relatively general description of a hypothetical project, there is some risk to the investor who applies for an EB5 visa based on this type of designation. Investors must set forth specific projects when seeking the EB5 classification when filing the Immigrant Petition by Alien Entrepreneur (I-526). These are scrutinized more closely than situations in which the regional center designation was based on an actual project supported by an appropriately detailed business plan. However, this option can be more realistic from a business perspective and it ultimately provides investors with additional options to consider.
Deference to Earlier Approved EB5s with Exceptions
The memo directs USCIS officers to provide deference to previously approved filings in most situations, and lists the scenarios in which such deference should not be afforded. This direction and clarification should provide increased predictability for EB5 applicants.
The USCIS is continuing efforts toward making the EB5 program more attractive to foreign investors. This is particularly important during periods of economic difficulties and job losses in the United States. While these changes and clarifications are welcome, the implication is not that the EB5 application process is simple or straightforward. To the contrary, it is strongly recommended that foreign nationals consult with qualified attorneys before filing such petitions. The Murthy Law Firm is available to assist foreign investors interested in pursuing permanent residency in the United States via the EB5 program.
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Disclaimer: The information provided here is of a general nature and may not apply to any specific or particular circumstance. It is not to be construed as legal advice nor presumed indefinitely up to date.