When can an EB-5 investor sell his share in a direct investment without impacting his green card?
I plan to use $500,000 to buy 60 percent of a retail business located in a TEA and use it to apply for EB-5. I would like to know when it is safe to sell my share of the business without impacting my ability to become a permanent resident. Do I have to wait for the approval of I-829?
Be careful about buying an existing business to qualify for EB-5. You must restructure the business under the expansion rule, invest in a troubled business to save jobs, or create new 10 full-time positions. Selling your share is not permissible until you file I-829. The most conservative is to wait until I-829 approval. Business documentation and an EB-5 business plan must be competently drafted to avoid problems with USCIS at the I-526 and I-829 stages. Hire an experienced EB-5 immigration attorney to competently prepare your case.
The "sustainment period," or the period the investment must be sustained, is the same for a regional center-based investment as it is for a direct investment EB-5 case. That period ends at the end of the two-year conditional residency period, shortly after filing the I-829. No need to wait for I-829 approval.
I would advise you to maintain your share of the business until you are sure to get the I-829 approval. You may receive RFE or any additional documents that would be required later if your I-829 is not adjudicated yet.
First and foremost, before focusing on liquidation planning, make sure that since your investment is in an existing business, you are either restructuring/reorganizing the existing business or expanding the existing business significantly into a new commercial enterprise. Just changing the name of the business you intend to purchase will not suffice. However, if you completely change the line of the business, that could qualify. Alternatively, the capital you plan to infuse into the business needs to create either a substantial change in the net worth of the business or in the number of employees. A "substantial change" can be achieved either by at least a 40 percent increase in the enterprise's net worth or an increase in the number of employees. This could mean that you might have to create more than the required new 10 jobs. If the business you plan to invest in is "troubled," you might also be able to qualify by simply "saving" those jobs. In other words, saving existing jobs that are in serious danger of being eliminated due to the company being in the red prior to the foreign investment is also a qualifying factor. Once you have checked all of these and are sure that your investment in the existing business will lead to I-526 approval and subsequently a conditional green card, then you can worry about when to unwind your position. Technically, you should be able to unwind after you file for the I-829 since USCIS said clearly that your investment is required to be at-risk during the sustainment period but not after. The sustainment period is the investor's two years of conditional permanent resident status. So, technically, once you file for the I-829, you should be able to liquidate, but on a practical level it is advisable that you maintain your investment all the way until the approval of I-829 just in case you get a request for evidence.
If you qualify for a direct EB-5 investment, you must maintain the investment until you are qualified for conditional lawful permanent residency, and such time until at least you have prepared and filed your petition on Form I-829 to remove conditional permanent residency. To be on the safe side, you should wait for the approval of the I-829 petition.
In a recent USCIS EB-5 stakeholder call, they clarified that the filing of I-829 ended the conditional residency period and the sustained investment requirement, but if you want to be extra sure, and can otherwise swing it, waiting until the I-829 is approved is not a bad idea!