What are the requirements for transferring funds for EB-5 investment?

An escrow account is not required by USCIS. The majority of regional centers use escrow accounts to hold funds until the subscription is completed by the EB-5 investor or until the I-526 is filed. Given current long processing times for I-526 petitions, most projects cannot hold funds in escrow until the I-526 is approved and they are released to investment to develop a project. You need to analyze the offering documentation of a project to determine what happens with investment funds. An attorney's account is not an irrevocable commitment of funds to the investment.

Projects and regional centers use escrow to receive EB-5 investor funding before transferring it to their new commercial enterprise account. When processing times were shorter, projects would hold funds in escrow until I-526s were approved. Now, funds are usually held in escrow until the I-526s are filed or until subscription procedures are met. This way, if the subscription does not get completed or the I-526 is not filed, it is easier to return funds to the investor. An escrow account is NOT required by USCIS.

Actually, there are a variety of ways to transfer the minimum $500,000 EB-5 investment from abroad to the United States to make an investment through an EB-5 regional center or a direct investment. It does not have to be done through escrow, although a number of the EB-5 regional center programs do allow you to put your funds in escrow under certain conditions. There would not be a problem for not using your escrow account unless it is a requirement for the particular EB-5 regional center project. The key is being able to trace your $500,000 investment back to a lawful source of funds in your home country.

An escrow account may be used for your convenience and safety; however, there is no requirement that you do so. What you need to show is the paper trail of the funds. Documentation should show a clear track from the legal sources of income to the EB-5 project. Make sure your attorney can earmark your funds in any client fund account.

An escrow is usually used to protect the investor, but a lawyer's IOLTA account can also serve as a protection mechanism to hold a client's investment funds. The lawyer's IOLTA account will serve the same purpose as an escrow. You should confirm that the funds went into the IOLTA trust account and not the general business account for the law firm by asking for the account credential, and save the transfer records. To answer your question, although escrow is often used by EB-5 investors, it is not required by law and I believe the lawyer's IOLTA account will offer similar protection for the investment funds. As long as the funds do not go into the regional center before the approval of Form I-526, the investors will be protected from having the investment amount stuck in a regional center before obtaining the EB-5 benefits.

As you are currently represented by counsel, I cannot provide legal advice. You should consult your attorney with regards to this question. Based on his/her answer you may want to seek secondary counsel with regards to that question. But only after discussing with your current attorney.

An investment held in your lawyer's business/client account does not not appear to be an irrevocable commitment of capital.

Generally, the preferred method is to have investment funds in an escrow. As a matter of fact, most regional centers do require that the fund be in an escrow for a host of reasons. While what you did is not common, it should not be a problem for your EB-5 petition.

There is no requirement that EB-5 investment be made into an escrow account first. You could have directly invested into the EB-5 business to which you are investing. Normally, many EB-5 investments, including the regional centers, use the escrow account while something like the I-526 is prepared and filed before releasing to the actual job creating business/project entity. Please note that attorney's client account is a trust account that is not to be comingled with your attorney's operating account. Thus, having the investment in that client trust account could serve as the escrow account before it is transferred to the job creating entity/business.

The money that is invested in the venture should be held in escrow, and then released when the developer needs it and provides the documentation required to show that the release request is legitimate. It sounds like you have told your lawyer to hold onto your money while you look for an investment, or perhaps the lawyer is actually acting as the escrow agent himself. But he is also your attorney. BIG RED FLAG! Conflict of interest that needs to be disclosed in your offering documents AND in your attorney's retention letter. You have a lot of questions to ask of your attorney. This does not sound cool to me.