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What requirements are there for accounts which hold EB-5 investor funds?

Are bank accounts associated with EB-5 investor funds considered trust accounts? What requirements, rules and regulations govern accounts in which EB-5 investor funds are held?

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    Steffanie J Lewis

    Immigration Attorney
    Answered on

    There is no immigration EB-5 requirement concerning banks. However, many EB-5 programs establish an escrow account in a bank, or other entity, to hold the investor''s money while certain steps in the I-526 petition process are conducted. The terms of the agreement are those mutually agreed to by the escrow agent and either the regional center or the individual direct investor. Upon the occurrence of the event specified in the escrow agreement, the escrow agent dispenses the money pursuant to the terms of the escrow agreement. For example, an escrow agent may be directed, by the agreement, to dispense the funds to the regional center/project upon approval by the USCIS of the investor''s I-526 petition. Such agreements may likely direct the escrow agent to return all, or some portion, of the investment to the investor if there is a final USCIS denial of the EB-5 investor''s I-526 petition. Other escrow agreements may direct the escrow agent to dispense funds to the regional center before all I-526 petitions are approved. If a project contemplates twenty I-526 petitions and the escrow agent were directed to dispense funds when 60 percent of those petitions were approved, 40 percent of the investors would incur the risk that his or her I-526 petition could be denied, but the investment may be successful. A final USCIS denial means the investor would not be granted conditional U.S. permanent resident status and a return on the investment would constitute the primary benefit from the investment.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Frequently, accounts are set up as escrow accounts with U.S. financial institutions. Generally, there will be an escrow agreement between a regional center project and its U.S. based financial institution. Regional center projects offering documents will spell out how the escrow funds are maintained and released to a project.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    There are no hard and fast rules for bank accounts associated with EB-5 investor funds. However, in certain circumstances, individual agreements between the parties will spell out what the nature, form and how the bank accounts will be administered. This type of inquiry should be thoroughly discussed with your EB-5 attorney. Also, be on notice that EB-5 regulations and assortment of banking and securities laws may affect EB-5 investor funds. Consult an EB-5 attorney on these myriad of issues you raised and other legal guidelines that may affect you.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    If you mean the accounts that the new commercial enterprise establishes to accept the foreign investor funds, they can be arranged as escrow or trust accounts, with conditions of releasing the funds to the project ranging from I-526 approval to filing to simply an agreement from the investor.

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    Ed Beshara

    Immigration Attorney
    Answered on

    Escrow accounts are usually set up with U.S. banks. There is usually an escrow agreement between the regional center and EB-5 project and the bank.

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