What are the reporting standards for EB-5 investor funds in escrow?

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We are a recently approved regional center and we have been receiving investor funds for our first real estate project. The funds are held in an escrow account, to be released for payment of development costs upon approvals of the I-526 petitions. Even though the eventual availability of the escrowed funds is contingent, can we report the escrow account as restricted cash in our assets on GAAP financial statements? What are the reporting standards for EB-5 investor funds in escrow?

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Answers

Fredrick W Voigtmann

Immigration Attorneys

Answered on April 17, 2018

There are no ongoing immigration requirements to report funds in an escrow account. The individual investors will need to show proof that the funds were released to the NCE upon I-526 approval. This usually comes up at a consular interview for the immigrant visa application or in the United States during the processing of an adjustment of status application. As for accounting/banking/financial reporting requirements, check with a CPA or tax attorney.

Charles Foster

Immigration Attorneys

Answered on March 29, 2018

The question of whether or not you can report the escrow account as restricted cash in your assets on GAAP financial statements should be referred your accountant who prepares your financial statements. This would not necessarily be an issue for the CIS. Whether the investor funds are held or not held in an escrow account and when they are to be released depend upon your contractual agreements and representations with and to your EB-5 investors.

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