What are the EB-5 at risk requirements during retrogression?

EB-5 must remain at risk and committed to the new commercial enterprise. EB-5 capital reposing in escrow under the terms of an acceptable escrow agreement (automatic release upon I-526 approval or other trigger) will meet the at-risk requirement. The larger issue is the requirement that the investment be "sustained" during the entire period of conditional permanent residency, which for some China-born investors could start two to three years (or more) from now. This means that the funds might have to be at-risk and the investment sustained for five, six, or even seven years. Most regional center projects, especially loan-model projects, were designed so that the loan would be paid back in five years. This could now present a problem because there will be large numbers of Chinese investors still in the project without their conditions removed.

Yes - the funds certainly have to remain at risk. Everything remains the same, except that investors cannot file to adjust status based on the approved petitions.

The EB-5 offering documents signed by investors will determine when the investment funds are committed to the project. Retrogression for the Chinese will mean that the Chinese investor will have to wait several months longer than other nationalities to apply for the conditional permanent residency visa. The investment funds will be 100% at risk until the investor first obtains unconditional permanent residency.

Your investment must be totally at risk when you make it.

Biggest fallout from the retrogression would be the tying up of invested funds for a longer period and the protracted exit strategy, as well as the "aging out" of children who are nearing 21 years of age. Yes, the EB-5 funds must remain "at risk" during the retrogression waiting period. On the current cut-off dates set for May 2015 (i.e.,* with the cut-off date set at May 1, 2013, based on the May 2015 visa bulletin, it means that during the month of May 2015, only those EB-5 investors (and their derivative beneficiaries) with a Priority Date of May 1, 2013, or earlier may apply for an EB-5 immigrant visa.) **Retrogression does not necessarily mean that projects will be delayed in getting money into their projects, since in most cases, the release of funds are conditioned on I-526 petition approval. Many projects hold a petitioner&#39s funds in escrow until the form I-526 is approved. Retrogression does not mean that investors cannot have their I-526 petitions processed and approved. It only means that they won&#39t get their green cards right away upon I-526 approval.

When the project can access the funds is wholly dependent on how the subscription agreement stipulates. For example, if it requires the fund to remain in the escrow until I-526 approval, since I-526 processing is affected by the visa retrogression, the fund can go directly into the project once the approval is obtained. On the other hand, if the release of the fund is tied to the approval of an immigrant visa at the Embassy, then the retrogression could seriously impact the project&#39s ability to tap the EB-5 fund.

USCIS has told its stakeholders that they will provide guidance as to how the timelines are affected, but currently, the investment must be "sustained" until the investor removes the conditions to permanent residency. Now it will take an extra two years for some Chinese investors to get to the point of removing conditions, but USCIS has not yet issued any guidance. Many projects condition their exit strategies for investors on the approval of the I-829 regardless of how long that takes, and may or may not be able to use the capital, depending on that project&#39s documents.