As an investor, what does EB-5 capital redeployment mean for me?

Redeployment is an issue only when the project (usually a five-year loan) is over and repaid to the NCE before the condition on one or more EB-5 investors is removed. The USCIS requires the EB-5 capital to remain at-risk (sustainment requirement) during the conditional period. Does the conditional period cover the two years only or does it cover all the time of conditional residence, which might be much longer, given the China visa number retrogression issue coupled with USCIS taking more than two and a half years to adjudicate I-829 petitions? The USCIS now confirms that the conditional period is the two years only and not the entire time the I-829 is pending.

The law prevents the redeployment of invested funds into any investment vehicle that provides guaranteed returns and no chance for gain or loss. The investment amount can be redeployed before or after the necessary job creation in the original job-creating enterprise and must be redeployed within a reasonable period of time following repayment of the original investment. Even if redeployment occurs before job creation, there is no material change if it occurs after the investor has commenced the Sustainment Period (2-year conditional residency period).

Capital redeployment for you or any other EB-5 investor who is applying for Lawful Permanent Residency through the EB-5 program means that the capital must be at risk not only at the time you file your EB-5 investor petition on Form I-526 but the time after you obtain Lawful Permanent Residency and file your Petition to Remove Conditions on Form I-829. Thus, even if the initial project is sold and the project developer is in a position to return capital, the capital must stay at risk and must be redeployed. All of those provisions should be worked out at the time the project is structured and all of those issues should be fully disclosed in the Private Placement Memorandum.

Capital redeployment is the manner in which your management team for your EB5 investment enterprise chooses to spend or invest the capital they receive from you. As your attorney is charged only with legal compliance, it is wise to have a separate and independent investment counselor for this purpose.

Capital redeployment is a big deal because the regulations state the investment has to be sustained and the money must be at risk. If the money is deployed, after the project is done and the loan is repaid, the question is whether it must be redeployed and at risk again, or a second time. Investors are nervous about redeploying into a second at-risk project, so many investors are looking for the least possible risk upon redeployment.