Most EB-5 offerings promise to refund subscription funds in case an EB-5 investor withdraws their I-526 petition or has it denied by the U.S. Citizenship and Immigration Services. An EB-5 escrow is an optimal way of ensuring that those funds will indeed be available for return in the event that a refund must be made.
This additional security provided by an EB-5 escrow can increase investor confidence in the projects they are considering for subscription. Escrow usage is not an EB-5 program requirement, but it has become an industry best practice. Investors have even started to insist that projects have an escrow in place to safeguard their funds. Ultimately, an EB-5 escrow can help issuers present more secure, transparent, and compliant offerings in an increasingly competitive marketplace.
Although an escrow can be utilized at any point in the EB-5 process, generally it is implemented during the subscription phase. A number of escrow models exist and the one best-suited to each project will depend not only on the requirements of that project, but also the requirements of the investors. A third party escrow administrator is able to streamline this process for issuers involved in the EB-5 program.
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