+1-800-997-1228
Questions & Answers

How do regional centers decide when they will return the EB-5 funds?

I see some regional centers offering to return the EB-5 investment money after two years, others after five years, etc. Does immigration law set any specific time for the duration of the EB-5 loan to the project? How do regional centers decide when they will return the investment funds?

Answers

  • Avatar

    Ed Beshara

    Immigration Attorney
    Answered on

    First, immigration regulations and policies clearly state that the investment funds have to be 100 percent at risk. There cannot be a redemption agreement for the return of any portion of the investment amount. The offering documents should clearly state the exit strategy. For instance, in a loan model, the loan will be repaid under certain conditions. Second, any authorized amounts paid back to the investor should only be paid back after the investor's I-829 is approved.

  • Avatar

    Echo Meisheng King

    Immigration Attorney
    Answered on

    The loan repayment to the EB-5 investors should not take place until every I-829 petition has been adjudicated by USCIS. The loan maturity is generally for a term of five years from the date loan proceeds are released to the project developer. Since Chinese investors make up a large population in the EB-5 investment sector, there are instances where the loan term may be extended two or more years due to the Chinese retrogression issue. It is also highly unlikely for any project to repay the loan in less than five years without putting investors' permanent green cards at risk.

  • Avatar

    Salvatore Picataggio

    Immigration Attorney
    Answered on

    The law requires the investment to be "sustained" throughout the conditional residency period. Generally, from date of investment to approval of the I-829, this can take five years, so that is the standard timeline. Others may simply condition any repayment on approval of the I-829 even if five years have not passed.

  • Avatar

    Julia Roussinova

    Immigration Attorney
    Answered on

    Return of funds is governed by a project's offering documentation. This must be spelled out in private placement memorandum and a limited partnership agreement, and disclosed to investors. Terms are specific to each project and you will need to conduct due diligence and hire the services of an experienced EB-5 immigration attorney before you invest into a particular project of your choice.

  • Avatar

    Jinhee Wilde

    Immigration Attorney
    Answered on

    It would be imprudent for the regional centers to contemplate returning the principal EB-5 investment until I-829 approval or at least until the I-829 is filed, as part of the evidence that needs to be proven to get the I-829 approved is to show that the investment was made and was sustained throughout the conditional green card period.

  • Avatar

    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    This has to be disclosed upfront in the PPM best to only return after the I-829 is approved.

  • Avatar

    John J Downey

    Immigration Attorney
    Answered on

    The law does not specify as to when or if funds must be returned. It will all depend on the project and the regional center. That is why you should engage a business expert to perform "due diligence" on the project.

  • Avatar

    Robert Cornish

    Securities Attorney
    Answered on

    Your investment is required to be "at risk," and technically a regional center has no obligation whatsoever to return anything to you. That being said, many deals are structured in the form of loan vehicles, rather than as venture capital or private equity investments. The deal terms are specific to each investment. You should read the specifics of deals through review of the offering documents with the assistance of your own counsel.

  • Avatar

    Ian E Scott

    Immigration Attorney
    Answered on

    Your EB-5 funds must be at risk throughout the time of your conditional green card status and usually regional centers return the funds after around five years. The actual term will be specified in the offering documentation, but there is no guarantee that your money will ever be returned given the investment nature.

Add your comment

Use a Facebook account to add a comment, subject to Facebook's Terms of Service and Privacy Policy. Your Facebook name, photo & other personal information you make public on Facebook will appear with your comment.