Vietnamese EB -5 investors with
approved I-526 petitions but whose
EB-5 projects might not survive the
pandemic.
L ATE S TAG E O F E B-5 (I-829
PENDING OR UPCOMING)
"If the underlying NCE
business cannot survive,
but the conditional
resident EB-5 investor
can keep the NCE entity
active and change to
another business model,
the condition still might be
removed"
If conditional residency has been
granted and the NCE subsequently
c l ose s d u r i n g th e s us tai n m e n t
period, the conditional resident EB-5
investor may still be able to remove
the condition if the NCE created the
required jobs, either direct, or indirect
in the case of a regional center,
within the conditional residency
period. 2 There is no requirement that the created jobs must
be maintained. At the time of their creation, the jobs needed
only to have been fulltime and considered permanent
(contemplated to last at least two years).
What happens if the investment cannot be sustained, or the
jobs have not/cannot be created due to pandemic-related,
economic issues with the project? The answer has to do with
timing and the reason for not meeting the requirement. If
job creation is just delayed, the EB-5 requirements allow for
job creation “within a reasonable time” after the conditional
period. The USCIS Policy Manual describes this “reasonable
time” as being within three years of the grant of conditional
residency.
“Jobs projected to be created more than 3 years after the
immigrant investor’s admission in, or adjustment to, conditional
permanent resident status usually will not be considered to be
created within a reasonable time unless extreme circumstances
[10] are presented.”
Footnote 10 to this section gives “force majeure” as an
example of “extreme circumstances.” Far more than any
hurricane, earthquake, or other natural disaster, one of the
greatest force majeure events in the past century has been the
COVID-19 pandemic. Therefore, if an EB-5 investor can show
how the pandemic prevented or delayed job creation by the
NCE and provide probative evidence of when the required jobs
likely will be created, it seems that the investor will be given at
least one additional year, if not more, to meet the removal of
condition requirements. 3
THE MATERIAL CHANGE RULE COULD
“SAVE THE DAY” FOR SOME
INVESTORS
If the underlying NCE business cannot survive, but the
conditional resident EB-5 investor can keep the NCE entity
active and change to another business model, the condition
still might be removed because of USCIS’ definition of material
change in the USCIS Policy Manual. Volume 6, Part G, Chapter
5.C discusses “Material Change,” saying that “an investment
may be further deployed in a manner not contemplated in
the initial Form I-526, as long as the
further deployment otherwise satisfies
the requirement to sustain the capital
at risk.” The initial business plan/
model had to have been filed in good
faith, but changes occurring during
the conditional residence period,
whether caused by the pandemic or
not, will not be considered material
and therefore, the removal of
condition requirements can still be
met notwithstanding the change.
In conclusion, the full effects of the
COVID-19 pandemic are difficult to
measure on a worldwide scale, or
even with respect to the state of EB-5
as a whole. Each business, whether a regional center project or
a direct project, has its own unique set of challenges in dealing
with the economic devastation resulting from the pandemic,
and each project manager, investor, and immigration lawyer
will have to work together to tailor mitigating strategies,
allowing for economic recovery and immigration success.
Fredrick W. Voigtmann practices
law in Ohio and California, where he is
a certified specialist in Immigration and
Nationality Law. He practiced law in Taipei,
Taiwan from 1993 to 1997 and he was
mentored by a former INS general counsel
from 1997 to 2010 in Los Angeles. He
established his own law firm in 2010,
focusing on employment-based and
investor-based immigration. He is a 1993
class graduate of Capital University Law
School in Columbus, Ohio. He is a frequent writer and speaker on
EB-5 matters, as well as a mentor to other attorneys.
Sources:
1
Granted, direct EB-5 investors are traditionally more entrepreneurial by nature than EB-5 investors
in regional center projects, where there is limited capacity to manage and direct the EB-5 project,
but many regional center investors contribute to the U.S. economy in additional ways, most often by
purchasing real estate, paying school tuition, etc., but in addition, these individuals often create their
own businesses in the United States, since being a regional center investor is hardly a full time job in
itself.
2
According to 8 C.F.R. §216.6(c)(1)(iii), the investor must have sustained the investment during
the entire two-year investment period, but legal counsel could argue that although the business
closed, the investor did not receive a return of the investment principal and thus complied with the
sustainment requirement. USCIS likely would take the position that if the business closes during the
sustainment period, the invested capital was no longer at risk. The USCIS Policy Manual is not clear
on this point, but both the manual and the regulation cite good faith and substantial compliance as
meeting the requirement.
3
According to the latest USCIS processing time report, see https://egov.uscis.gov/processing-
times/, I-829s are taking 37 to 248 months to adjudicate. It is likely that if the required jobs are to
be created at all, they certainly would be created by the time USCIS issues an RFE on any given
investor’s I-829 petition.
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