What are my rights as an EB-5 investor if I do not want my funds redeployed?
I am an EB-5 investor who was recently contacted by the regional center where I made my investment. They want to redeploy my investment and were looking for my permission. I need more time to investigate what is going on so I have not given my approval yet. What happens if I tell them that I do not want my investment redeployed? What if other investors agree to the redeployment?
This is a complicated question because the redeployment of your capital may be required to show that you have sustained your at-risk investment in the new commercial enterprise. More details are needed, and you should be consulting with an experienced immigration attorney who can advise you on your options.
You should review your agreement with the regional center regarding the details of your investment and exit strategy. In most cases they cannot not redeploy your investment without your consent or agreement.
A regional center will redeploy EB-5 investment capital when the job-creating entity repays the five or six-year loan back to the new commercial enterprise before all EB-5 investors have approved I-829 petitions. U.S. Citizenship and Immigration Services policy requires EB-5 investment capital to be at risk in the new commercial enterprise until the I-829 petition of each EB-5 investor has been adjudicated. It seems that you must agree to the redeployment of your capital.
Your rights as an EB-5 investor would, to a great extent, depend upon the individual project and those rights set forth in the Private Placement Memorandum and the other documentation. The mere fact that the Regional Center contacted you to ask for your permission to redeploy your investment is evidence that they need your permission to do so. Remember, these requests are often made in order to protect the rights of the investor. Apparently, you and other investors may not have progressed far enough in the process to be eligible to file your petition on Form I-829 to remove conditions. There is a separate requirement that your funds be fully invested up until the time you have filed your I-829 petition. Thus, if the project has proceeded to the point that the funds from the project are being returned, legally it may be necessary for your funds to be redeployed until such time as you are able to file your Petition to Remove Conditions on Form I-829. If you tell them that you do not want your investment redeployed, it may be that the project developer will return your funds, but that may also jeopardize your rights to remove conditions on your Lawful Permanent Residency, thus putting your goal to become a Lawful Permanent Resident in jeopardy.
Under current policies of USCIS, as recently updated by its Policy Manual dated June 14, 2017 (the "Policy Manual"), every EB-5 Investor is required to retain his or her investment capital "at risk" in the NCE until such time as that EB-5 Investor has been in the U.S. for 2 years in conditional resident status, commencing on the date the EB-5 investor entered the U.S. or obtained a change of status if the investor was already in the U.S. under a different visa (the "Sustainment Period"). Due to the EB-5 quota backlog for Mainland China, those EB-5 Investors are now required to retain their capital "at risk" in the NCE for a period that is much longer than a five-year loan term to maturity. Even for those investors not from Mainland China, it is possible that their investment capital will need to be redeployed before they satisfy the Sustainment Period, especially since loans can be repaid after the required jobs have been created, even before the loan maturity date. Thus, if you have not had your I-829 approved, redeployment may be necessary. Just make sure that you ask the questions and have the regional center give you detailed information, including the following: (1) A detailed description of the new investment that is being undertaken; (2) What are the risks factor associated with the redeployment; (3) Review an independent report analyzing the appropriateness of the investment;(4) An analysis of the procedures considered in making the investment decision; and (5) Analysis of the appropriateness of the investment to satisfy the "at risk" requirement.
Your EB-5 Immigration attorney and securities attorney will be able to advise you. The security offering documents you signed will state whether the new commercial enterprise can redeploy your funds with or without your permission. The EB-5 legal requirement is that your investment had to be sustained. Therefore, if your funds are just placed in the new commercial enterprise, they may not be considered to be sustained or at risk. As a result, your funds need to be redeployed.
You have the sole right to decide whether your investment is redeployed or not. Also, it does not matter if other investors agree to redeployment or not you do not accept their decision. If you need to, consult an EB5 attorney for further consultation.