I was told by my regional center that it will redeploy my capital into the stock market while I wait to reach the I-829 stage. It said that someone from the regional center will decide what stocks to invest in. Are they allowed to do that? I do not know if they are experienced at investing in the stock market. Shouldn’t they have some type of advisor? What are my options here?
Regional Centers are permitted to redeploy the investment funds to make sure that their investors meet the "at risk" requirement. You will want to work with your attorney to discuss the manner in which the funds are being redeployed.
You should consult with an experienced immigration attorney to represent you and contact the regional center to make sure that: (1) you receive all the notice and details to which you are entitled as an investor/limited partner/LLC member and that you are comfortable with who is managing these funds; and (2) the regional center''s redeployment plan and documentation will comply with USCIS requirements so that your I-829 can have the best chance of approval.
You should speak with a person at the Regional Center who is in a position of authority. If the Regional Center is redeploying millions of dollars of the EB-5 investors' principal, then it would be prudent to have a professional investment adviser invest these funds.
The ability of the Regional Center to redeploy your capital will depend upon a variety of factors including any and all agreements between the Regional Center and the prospective investor as set forth in all pertinent documents, including the Private Placement Memorandum. In general, it is in the investor's interest that the funds be redeployed in order to comply with U.S. immigration laws since the funds must be "at risk" until such time as the investor is eligible to file to remove the conditions on his or her permanent resident status. With respect to who makes that decision, typically as a limited partner you would not play any role in same and the Regional Center would make the primary decision, but given their fiduciary duty to their investors, it would be almost certain that they would rely upon qualified financial advisors in order to make those investment decisions on behalf of their investors.
There is no general standard on the issue of redeployment, it all depends on the terms of agreement between the investors and the regional center. Advisably, consult an attorney to check the details of deployment and associated your agreement.
USCIS amended its Policy Manual on June 14, 2017 to clarify various policy issues regarding the requirement of an investor to sustain the investment. For redeployment of funds to meet the "at risk" requirement, USCIS stated that the funds must be redeployed in a manner "related to engagement in commerce" and that the requirement that the redeployment be "within the scope of the business of the NCE". Specifically, the USCIS gives an example of an NCE that makes an initial investment in a construction loan for a multi-family property, and states that the NCE may make reinvestments in one or more similar loans. In addition, the USCIS states that an NCE may invest in new issue municipal bonds for infrastructure if those investments are within the scope of the business of the NCE. Thus, there seems to be a requirement that the partnership agreement or operating agreement of the NCE authorizes the NCE to make an investment or reinvestment that is similar in some respect to the reinvestment made by the NCE. Also, NCE must also meet federal and state securities law requirements, and the manager or general partner of the NCE must satisfy its fiduciary requirements to the investors when making a reinvestment decision on behalf of the NCE and maintain transparency, including hiring third-party fund administrator to track all NCE payments from the reinvestment and to investors so that appropriate funds and payments are properly managed. Given these parameters, the regional center proposing to put the redeployed funds in a publicly traded stock market of their choosing does not seem to meet the USCIS guidelines, unless their (NCE) original business model was to invest the EB-5 in a publicly traded stock market, which would not have been acceptable for the EB-5 purposes.
The capital must remain at risk and due to the backlog, some funds may have to be redeployed in order to maintain the risk requirement. The offering documents generally provide the investors an idea of how funds will be redeployed. If funds would be redeployed in another at-risk investment i.e. stocks, you may need to retain an investment advisor to review it.
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