How can EB-5 investors prepare for unplanned events? -

How can EB-5 investors prepare for unplanned events? Staff
Understanding and preparing for potential changes in their EB-5 journey can enable investors to navigate these challenges more effectively.

Unplanned events can significantly impact EB-5 investors applications, with delays being the most common unforeseen obstacle applicants face.

Delays in the EB-5 process can range from the time the U.S. Citizenship and Immigration Services (USCIS) allocates to processing application forms to EB-5 projects repaying their investors past due time.

“Several unplanned events could potentially affect applications by EB-5 investors. The most common are delays in processing times,” says a corporate and securities attorney specializing in EB-5, Anthony W. Cummings. “Wait time and investors are either becoming frustrated when they want to move on with their lives or are indifferent if they are content with their position.”

Immigration attorneys recommend investors grasp the significance of these potentially unexpected events in their EB-5 journey and take proactive steps to prepare for them. This understanding and preparation can enable them to navigate these challenges more effectively from the beginning of the process.

“Most clients know enough about immigration to remain flexible,” says Carolyn Lee, U.S. immigration attorney and founder of Carolyn Lee PLLC. It’s a real challenge for attorneys to stay on top of the changes and uncertainties, and to advise clients about all the unknowns in advance and as changes unfold. I find that our clients and we rely on our trust relationship with each other. We can’t know all the unknowns, but our clients trust us to hold them firmly through.”

What unplanned events could EB-5 investors face in their application?

Delays in the EB-5 process can take different shapes. For example, the USCIS is taking longer than expected to process the I-829 form. Meanwhile, some EB-5 projects still need to meet their pledged timelines for returning the investment to investors.

According to Cummings, longer waiting time is a systemic issue that investors must prepare for. He cites the case of a Chinese client in the Hudson Yards EB-5 project who is uncertain of continuing to pursue her application as she no longer needs the EB-5 visa after marrying a U.S. citizen but has yet to receive her investment back. Similarly, a Turkish investor faced delays as their investment could not be returned until all investors’ applications were processed, significantly affecting their timeline.

“Developing patience and resilience appears to be crucial when managing these additional delays due to USCIS backlogs or problems with repayment,” Cummings notes. “The only thing I see investors able to do is manage the additional delay and let it unfold.”

Longer processing times can also cause other unplanned events, cautions Farah Abbas, the principal attorney of Abbas Law PLLC. “With such lengthy government processing times in the EB-5 program, it is common to see life circumstances change from one part of the process to another.  I’ve had several clients get divorced or face severe health issues while their EB-5 immigration case was ongoing.”

Cummins adds: “Sometimes there is a marriage or some other event that makes the application process academic or moot, but those events are less frequent.”

The death of the EB-5 applicant is another delicate and sensitive situation that affects the immigration status of their dependents. Other unforeseen events, such as political unrest, changes in leadership, economic crises, and even natural disasters, can affect the process.

It is important to note that a potential U.S. government shutdown won’t affect USCIS processing times because the agency is financially autonomous, unlike other federal agencies that rely on government funding. However, further delays could occur if the USCIS needs to confer with another federal agency that requires U.S. government funding while processing I-526I-485, and I-829 petitions.

What options do investors have in case of unexpected situations during their EB-5 process?

Despite the unexpected event, EB-5 investors must be prepared to provide the necessary documentation and information to address these changes.

Advising clients about unplanned or unusual situations emerging during an EB-5 application is a constant for EB-5 attorneys.

In personal situations, “the filing process may need to adjust,” Abbas says. “As the person or family who may be experiencing a difficult time, you may not realize how it could impact your immigration case.  That is why I advise to always keep in touch with your immigration attorney.  Not just for immigration-specific issues like getting work authorization or getting your visa, but for any big life change.  Your immigration attorney can guide you on the considerations that may impact the rest of your case processing and any adjustments you may need to make.”

Cummings notes that litigation is an option if the USCIS delays processing petitions. However, he explains that many investors hesitate to take legal action against the agency or EB-5 projects due to the associated costs and legal complexities, leaving them with limited options.

“I speak to so many investors who are looking for options to expedite the process, and we often conclude all we can do is continue to wait. Investors are reluctant to file claims, and the funds continue to resist the return of investment using their absolute discretion as the basis.”

Other EB-5 investors may also be reluctant to sue due to cost and intimidating legal terms.

“Investors are often intimidated by the contract language of the subscription agreements and limited liability company member agreements. The agreements often call for arbitration or lawsuits in not-so-easily accessible jurisdictions (many jurisdictions may be implicated due to the state of incorporation of the company), and investors are reluctant to bring a lawsuit against the funds due to costs associated with pursuing the claims. This is true for investors who no longer need a green card through the programs and those required to leave the country due to denial of an application. Many of the funds maintain complete discretion in returning the investment.”

Meanwhile, the outcome of unexpected personal matters depends on the specific circumstances. For instance, if a primary applicant and their dependent get divorced, the visa status of the dependent in the U.S. will change. If the divorce takes place after the USCIS approves the I-526 petition, the main applicant can remove their former spouse from a pending I-829 petition. However, if the divorce happens during the conditional permanent residence period, the ex-spouse may still be included in the investor’s petition. The ex-spouse also has the option to file a separate petition.

Also, some investors may get married after submitting the I-526. The principal applicant can add the new spouse before the permanent residency is approved. If the applicant marries by the time they submit the I-485 form, the new spouse can file the same form if they are in the U.S. on a nonimmigrant status (not a visa waiver) and if the Priority Date is current.

Even if a request for evidence (RFE) emerges in the process, the newlywed can use that opportunity to submit a modified I-526 form with the new information and the marriage certificate.

In the meantime, if the main applicant or their dependent develops a health condition while applying, they may need to complete an I-693 form if they are in the U.S. or an equivalent Department of State (DOS) form if they are outside the U.S.

If the health issues require expensive treatment, the USCIS or U.S. consulate may inquire about the applicant’s ability to pay for it without applying for public aid. Regarding health problems, the U.S. immigration agency may consider certain health-related factors, including communicable diseases, to determine admissibility. They are infectious diseases of public health that apply to immigration medical examinations conducted in the U.S. and include gonorrhea; Hansen’s Disease (Leprosy), infectious; Syphilis, infectious stage; and Tuberculosis (TB), Active-Only a Class A TB diagnosis renders an applicant inadmissible to the U.S.

If the main EB-5 applicant passes away, the options for dependents are limited. If they die before the I-526 is approved and the conditional green cards are issued, the living spouse cannot replace them in the petition. EB-5 attorneys suggest transferring the investment so they can file a new I-526. If the principal applicant dies after getting the I-526 approved during the two-year sustainment period, the dependents of the deceased may be eligible for removal of conditions if they can demonstrate that the EB-5 program requirements are being met.

It’s important to note that the USCIS will assess unexpected events affecting applications individually, which may not automatically result in visa denial or inadmissibility.

“I’ve seen some clients mistakenly think that they would lose their green card status because of getting divorced from the EB-5 Investor/Principal Applicant for their family.  Or other clients who have had a family member get seriously ill in their home country, and they’ve assumed they will not be able to go and take care of them.  These are all things that can be addressed with the appropriate advice and guidance from your immigration attorney,” Abbas concludes.

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