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How quickly can EB-5 investment funds be accessed?

It is my understanding that China has a waiting list of EB-5 investors. If a Chinese investor is interested in making an EB-5 investment, can he deposit the required funds directly into the company for immediate usage instead of into a third party escrow account? Is there a required wait time before the funds can be used?

Answers

  • Avatar

    Salvatore Picataggio

    Immigration Attorney
    Answered on

    It depends on the structure of the investment. Many projects today will begin using funds as soon as the I-526 is filed. Some will wait until the I-526 is approved, but with such long processing times, this is becoming less common.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    It is very rare to have a direct deposit with the company. A third-party escrow is always preferred because generally the funds cannot be used unless the petition is approved. Even the agreement between the investor and the regional center should precisely ensure funds are not used until the petition is approved. Advisably, consult an EB-5 attorney to further examine your options.

  • Avatar

    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    The funds can be used immediately and most escrow arrangements today merely have a hold-back provision for refunds.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    The EB-5 submittal (I-526) requires the funds to be paid into the enterprise. Whether they can be used prior to EB-5 approval depends on the documents drafted between the project and the investor, and what happens to the funds if the I-526 were to be denied (most permit the return of the investment minus any admin fee).

  • Avatar

    Ying Lu

    Immigration Attorney
    Answered on

    Setting up an escrow account is not mandatory. In my opinion, escrow accounts are more of a marketing point so that the investors feel that their money is safe. Due to the long adjudication time, it is almost impossible for the project not to use the money until the I-526 petition is approved. The project can set certain conditions as to when to release the money from the escrow account. As soon as the conditions are met, the money can be deployed in the project immediately.

  • Avatar

    Peter Zhang

    Immigration Attorney
    Answered on

    There is not a required wait time. The escrow bank is completely discretionary and is now primarily used as a marketing mechanism. (Most escrow funds allow for 100 percent release after receipt from USCIS of the I-526 filing.) If you wish to transfer directly to the New Commercial Enterprise, you may.

  • Avatar

    Charles Foster

    Immigration Attorney
    Answered on

    Yes, the funds can be placed directly into the job creating entity rather than going into an escrow account. It depends upon the structure of the particular EB-5 project. The length of time the developer is required to wait for the funds depends upon how the project has been structured.

  • Avatar

    BoBi Ahn

    Immigration Attorney
    Answered on

    It is possible for immediate use of the funds, but that would depend on the agreement terms with the project/regional center/developer and the investor.

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    Robert V Cornish Jr

    Securities Attorney
    Answered on

    You are playing with fire in terms of violating securities laws, insofar as you would be accepting funds for investment prior to any PPM or offering circular being prepared, aside from the EB-5 issues someone may have. If this person wants their money in the United States while you get your act together, they can open a brokerage account or bank account with a U.S. firm in their own and have the money sit there.

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