The EB-5 program seeks to attract individuals from other countries who are willing to put their capital at risk in the United States – with the hope of ultimately gaining lawful permanent U.S. residency – to help create U.S. jobs. USCIS evaluates and adjudicates I‑526 Petitions by reviewing these criteria: (1) A New Commercial Enterprise Has Been Established; (2) Investment of the Requisite Amount of Capital; (3) Lawful Source of Capital; (4) Active Involvement in the New Commercial Enterprise; and (5) Employment Creation.
According to 8 C.F.R. § 204.6(j)(2), in order to qualify as an investment in the EB-5 program, the investor must actually place his or her capital “at risk” for the purpose of generating a return. The law does not specify what the degree of risk must be; the entire amount of capital need only be at risk to some degree. The May 30, 2013, EB-5 Adjudications Policy Memorandum (Policy Memo) provides additional guidance regarding I-526 Petition and I-829 Petition requirements. According to the Policy Memo, an investor must demonstrate in his or her I-829 Petition “… (1) that the required funds were placed ‘at risk’ throughout the period of the petitioner’s residence in the United States… (3) that this ‘at risk’ investment was ‘sustained throughout’ the period of the applicant’s residence in the United States.”
Therefore, these regulations require an investor to demonstrate in his or her I-829 Petition that the investment was sustained through the period of conditional permanent residency. This period is the two-year time frame which starts when an investor enters the United States on an EB-5 immigrant visa or receives approval of his or her adjustment of status application. Accordingly, the regulations and the Policy Memo appear to indicate that the “at risk” requirement is not applicable until an investor becomes a conditional permanent resident after entering the United States on an EB-5 immigrant visa or upon receiving approval of his or her adjustment of status application.
Apart from the duration requirement of the “at risk” element discussed above, an “at risk” investment also requires that the investor’s capital actually be placed “at risk,” which requires that there be a risk of loss and a chance for gain.
It should be noted that retrogression of the EB-5 visa category for mainland born Chinese nationals may affect the length of the “at risk” duration. If there are no EB-5 visas available to an investor due to retrogression, the beginning of his or her period of conditional permanent residency will be delayed. Because the EB-5 funds must remain “at risk” for the period of conditional permanent residency, any delay in the start of the period of conditional permanent residency will lengthen the time frame in which the EB-5 funds have to remain “at risk.” In a situation where the EB-5 funds have been loaned from a new commercial enterprise to a borrower, this loan may have to remain outstanding with respect to an investor affected by retrogression longer than an investor not affected by retrogression. For instance, the term of the loan may need to be increased or extended to account for an investor affected by retrogression.