When do regional centers release funds to the job creating entity?
If I am the first EB-5 investor in a project which will have other EB-5 investors, when is the regional center supposed to release my funds? Will it be at the same time as all the other investors who subscribe to the project? Or is the regional center supposed to release each investor''s money one at a time?
As with any agreement, you will need to check the terms of the offering. You may find this information in the loan agreement between the investor and the New Commercial Enterprise. In general, there will be language to prevent the NCE from returning the investor funds prior to satisfying the USCIS rules for obtaining a permanent green card, such as creating the requisite jobs.
For this question, please refer to the escrow agreement provided by the regional center. Different regional centers have different practices. Some have an early release term while others say that they will release the investor''s funds when his/her I-526 petition is approved.
If it is a regional center project, the investors will invest in a new commercial enterprise. The investors'' funds may first be transferred to an escrow account.The securities offering documents including the subscription agreement will state when the funds are transferred from the escrow account to the new commercial enterprise and then loaned to the job creating entity (if the EB-5 project has a loan model ). The timing of the transfer will be based upon a number of conditions and all being different, and depending on the project.
John J Downey
This all depends on your agreements with the regional center made prior to your investing.
The timing of EB-5 fund release from escrow is normally covered in the Offering Memorandum and Subscription Agreement. To meet the USCIS standard to have the fund committed irrevocably, the escrow agreement also contains very specific conditions upon which fund should be released by the third-party escrow agent. As for the specific languages found in such conditions, it varies. There does not seem to be any legal requirements in this regard. So long as the EB-5 fund is irrevocable and out of the investor''s hand, whether it is released upon one single I-526 approval or a batch of I-526 approvals is entirely depending upon the negotiation between the regional center and the investor, or more likely than not, by the regional center, which adjusts the condition based upon its assessment on investors'' acceptance of such condition.
There are different options depending upon the regional center and the EB-5 project it is offering. Some release funds upon I-526 filing, some upon I-526 approval, and some have releases that are conditioned upon a certain number of I-526 petitions filed or approved. The terms and conditions of release of the funds from escrow should be listed in the escrow agreement you signed or will sign. You should carefully review any and all agreements and written materials provided by the regional center and you should have an experienced EB-5 lawyer represent you so that the terms of the agreements are clear to you.
It depends on the structure of that particular regional center and New Commercial Enterprise. Some wait for the filing of the I-526. Others wait for approval. Others release funds upon completion of the subscription. These funds may be released investor-by-investor, or pooled and released in groups.