We all know that the investment of an EB-5 applicant must be “at risk.” Now my question is, when must the investment first become “at risk”? Does it need to be at risk even when the I-526 petition is filed and before I-526 approval? Or do the funds only have to be considered at risk after the I-526 is approved?
The regulations require an EB-5 visa petitioner to present evidence showing that his or her capital is placed at risk. Therefore, the funds must be at risk at the time of filing.
The funds must be placed at risk in order for the I-526 to be approved. The at risk funds could be deposited into an escrow account subject to an escrow agreement that requires release of the funds to the new commercial enterprise upon approval of the I-526 or some earlier event.
The funds must be at risk at the time of filing. The question is, what does "at risk" mean? Normally with regional center petitions, the money is held in escrow until the petition (or a certain number of petitions) is/are approved. As long as the escrow agreement states that upon approval of the petition, the money will be released to the regional center, the CIS takes the position that the funds are at risk.
You seem to have mixed up the at risk concept. At the I-526 stage, the fund needs to be committed and non-revocable. The at risk feature only applies to how the funds are used. For example, if the business plan states the funds are going to buy a residential house, that is not at risk. It is not uncommon that at the I-526 stage, the funds remains in an escrow account maintained by a third party - which by some measure, it is not "at risk" at all; that does not prevent the I-526 from being approvable, as long as other requirements are met.
The filing of the I-526 petition will clearly state the personal investment funds are 100 percent at risk. However, the EB-5 regulations and policies allow the return of the personal investment funds if under certain circumstances there is a denial of an I-526 petition.
The funds need to be placed at risk before the time you submit the I-526. Generally if you place the investment funds in the company bank account it is considered at risk. Be sure to place some of the investment funds in the operation account. Once the money goes in the operations account it is considered at risk. Use payments made after the funds were deposited to show at risk activity.
Through the content of the offering documentation submitted with the I-526 petition, it must be shown that the funds are at risk and will remain at risk through the entire immigration process, ending when the investor receives approval of the I-829 petition and their full, lawful permanent residency. Funds being at risk is one of the requirements for I-526 approval.
The funds must be at risk upon filing of the I-526 petition, as the petition must be "approvable when filed" under relevant law.
Once the project commences, the capital must be at risk. If the project will not start until you receive I-526 approval, then it will begin at that point.
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