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How much should I know about the other EB-5 investors in a project?

I have read about how to research regional centers before investing, but how much do I need to know about the other EB-5 investors in a project before I apply? For example, what if I invest in a project where the other EB-5 applicants have retrogression (I am from Mexico)? Will my EB-5 application then get delayed too? At what point should I ask for information about the other EB-5 investors in a regional center project?

Answers

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    This is a good question, and not one that many people are asking (yet). In most regional center projects, there is no reason for investors to know anything about one another and in fact, client confidentiality is the order of the day. You bring up a good point, however, about the visa retrogression issue and its potential negative effect on some regional center projects, particularly loan-based projects where the business model was based on paying back the loan and cashing out the investors in five years. For projects that are Chinese investor "heavy," which is most of them, this could be a potential problem. It is unclear if China visa retrogression will affect project investors who are from other countries, but I think regional centers should be meeting with their attorneys and strategizing some scenarios to address this issue (and advising their investors on what those plans are).

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Each investor process is treated separately by USCIS, but other investors may affect your process if the project cannot obtain the amount of investors needed as indicated in their offering documents. Lack of investors means a lack of funding, which may affect the project's success or compliance with the business plan. That said, the denial of an investor for their source of funds should not affect the other investors, as the project will have an opportunity to find a replacement investor.

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    Michael A Harris

    Immigration Attorney
    Answered on

    The retrogression issue is important because it raises questions about how an EB-5 project might be capitalized, as well as when investors are admitted to and exit from the respective partnership. Generally, EB-5 regional center projects will have released capital funds from escrow before an EB-5 investor (such as from China) has actually been admitted into the United States as a lawful permanent resident. Some projects will release funds immediately upon subscription by the investor if certain conditions are met. Those conditions might be approval of other I-526 petitions or an I-924 that has preapproved the project. Hence, upon the release of funds and expenditure by the project, job creation will commence. And, as such, those jobs as forecasted may have commenced and been completed before an investor ever arrives in the country. So, the retrogression problem presents a two-fold challenge to the project. Will job creation that occurs before the investor's conditional residence begins be credited to the investor? And what can the project do with the EB-5 investor's funds after the project is complete BUT the investor is still not in the United States as a resident? We are still waiting for more clarification from USCIS about this. Currently the USCIS has a 2-year rule that is measured from the date of I-526 approval, requiring the project to show that job creation will occur within 2 years of the investor's I-526 approval. USCIS takes the position that after approval of the I-526 it should generally take 6 months to enter the United States, and then the residence period will last 2 years initially. If investors from China cannot arrive until an additional 2 years, will this 2-year rule become a 4-year rule? If the project cannot pay back those investors from China, can it repay all of the investors who are not Chinese? Must it redeploy the capital in order to continue job creation, or to at least keep the investor's monies at risk? These are questions that we are still waiting to sort out, and hence why questions such as yours are important to ask when selecting a regional center project. Otherwise, since Mexico is not currently facing retrogression (and would have to exceed around 7 percent of available EB-5 visas per year), retrogression from other countries should not affect the processing of your I-526 petition. There is an excess of many pending I-526 petitions, and understanding from a particular project whether those delays can affect the financial viability of their project (and your success) is critical to consider.

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    Ian E Scott

    Immigration Attorney
    Answered on

    It is not necessary to know details related to the other investors in a project, and the retrogression that may be applicable to a Chinese investor will not impact you.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    Visa retrogression only applies after the I-526 is approved for the visa processing or adjustment of status filing. Since you are from Mexico, you will be able to move forward with the visa application process after your I-526 is approved without any delays and enter the United States, while those with visa retrogression issues will have to wait until their visa numbers become current. The only thing you may wish to check with the regional center is how the EB-5 investments from those investors with retrogression are being released to the Job Creating Entity so that the requisite jobs are timely created. This will impact whether the Removal of Condition applications (I-829) will be approved smoothly with proper evidence that all the required jobs were indeed created.

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    Dawei Gongsun

    Immigration Attorney
    Answered on

    No need. It is not relevant.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    As long as they are actual investors and not just potential investors I cannot think of a scenario where you would need to know anything about the other investors. You just need to know about the project.

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    John J Downey

    Immigration Attorney
    Answered on

    I would pose the question before investing. If they say it is confidential, mention the Chinese retrogression and get their answer in writing.

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