Where must a direct EB-5 investment be deposited before I-526 submission?

Merely putting investment funds in an LLC operating account will not qualify for at-risk investment. An escrow account would be the appropriate option.

The escrow account has always been the preferred method.

The EB-5 law requires the investor to have invested or be in the process of investing the required amount of capital. In practical terms, all of the capital needs to be invested and at risk prior to I-526 submission. If the funds are in escrow and the release of funds is conditioned upon I-526 approval (i.e., the funds automatically will be released to the NCE, or from the NCE to the seller of an existing business in the case of a business purchase, upon I-526 approval), then the funds will be considered at risk. Keep in mind that uncommitted funds sitting in the NCE bank account will not be considered at risk. There must be a credible and feasible business plan explaining how the funds are committed to being spent, a timeline for such expenditures, and how/when job creation will result. There also must be evidence of meaningful business activity. All of this evidence should be included in the supporting documents to the I-526 immigrant investor petition.

There is no requirement where the direct EB-5 investment be deposited since it is your funds. Presumably you have your funds in an U.S. account before you transfer the funds into the job creating entity. While it can be deposited in escrow, it is essential that the full $1 million, or should the project be located in a Targeted Economic Area (TEA), $500,000, be expended on the project itself, which obviously can include the necessary salaries to complete the job creating project.

The investment capital must be invested "or in the process of investing" when filing the I-526 petition. Generally, this means being placed in an escrow account or into the new commercial enterprise's operating account. There are many things to plan for and work on before making the investment, however, so please retain an immigration attorney to assist you.

If you set up a LLC for your direct investment where you intend to do business and create jobs, then you could deposit your investment into a bank account set up for that business. The business accounts could be several: operating, payroll and reserve accounts. The reserve account could be an escrow account for which you could set up some mile markers for the development of the business before the funds could be released to the operating account.

One of the requirements for EB-5 immigrant investor processing is that the requisite minimum capital must be "at risk" and invested or actively in the process of investing at the time of filing the I-526 petition. Funds deposited in escrow would fall under the category of at risk and invested. Part of the capital deposited in the business operation account, out of the hands of the investor, provided the funds are only available for the use of the business and allotted for in the business plan would also suffice. All needs to be documented.

The money must be at risk. A bank deposit would not be at risk.

While the regulations do provide for having "invested or be in the process of investing" we strongly recommend that the full amount of the investment be irrevocably committed to job creating purposes as explained in the business plan. Merely having the money sitting in the company's bank account is not clear evidence of investment.