the concurrent filing of I-526E ( EB-5 petition ) and I-485 ( Application to Register Permanent Residence or Adjust Status ), I-131 , Application for Travel Document ( Advance Parole / Travel Authorization ) and I-765 , Application for Employment Authorization ( Employment Authorization Document - EAD ). I-765 and I-131 get adjudicated much faster than the I-526E granting the investor most of the benefits of a green card in a fraction of the duration .
b ) Investors born in retrogressed countries such as mainland China , India , and Vietnam should also consider selecting projects from one of the set-aside categories , such as Rural , TEA , or infrastructure , for eligibility of priority processing and retrogression considerations avoidance .
BACKGROUND INFORMATION ON EB-5 INVESTMENTS
The EB-5 program is a federal program . It allows foreign nationals to invest in job-creating projects in exchange for a green card . The benefits of investing in EB-5 projects include a clear path to permanent residency and the opportunity to earn a return on investment . However , like any investment , there are risks associated with EB-5 projects . These risks include losing the invested EB-5 capital if the project developer misuses the funds or not getting the green card if the project fails to create the requisite number of jobs . By utilizing the services of a licensed broker-dealer , investors can select safer projects and stay away from those that would expose them to undue risk .
RIA demands EB-5 stakeholders to be responsible . In addition to an escrow agent that disburses the capital , Regional Centers must now use the services of a Fund Administrator who is responsible for tracking not only the EB-5 funds but all the payments throughout the life of the EB-5 investment , further reducing the possibility of fraud and misuse of the funds .
" By utilizing the services of a licensed broker-dealer , investors can select safer projects and stay away from those that would expose them to undue risk ."
Signature Bank , and First Republic Bank have made past and future EB-5 investors nervous . While bank failures are never desirable , if they do happen , we must understand who can get hurt . Nearly all the recent ones were by banks who acted as Escrow Agents , Fund Administrators , or Trustees for the EB-5 funds held in a separate account not permitted to be co-mingled with the banks ' general assets backing their liabilities . Therefore , in a failure situation , the funds were accessible by the Regional Center monitoring the New Commercial Enterprise ( NCE ) they create that typically lends the EB-5 funds to the developers through the Job Creating Enterprise ( JCE ) they control and manage . If the funds had already been disbursed to the JCE , by and large , the failure would have had no serious consequences . Similarly , even if the funds were still with the bank , absent any fraudulent behavior by the bank , as long as the bank kept them in a separate account , they would still be secure .
In many cases , the banks act as senior lenders , and if they fail , that could have unpleasant consequences . However , if the failed bank had already lent out the funds before the failure , that would have little or no effect on the project unless its lenders could accelerate payment of its loans early . The project owners would then potentially need to find alternative sources of funds to refinance and pay off the failed bank creditors calling the senior loan of the project . If the failed bank had committed to the loan but had not disbursed the funds yet , that could potentially result in a liquidity crunch for the Regional Center which would then need to search for a new lender to replace the failed one . That could be problematic . They might not find an alternative bank or lender willing to take the risk at a reasonable cost of funds , thereby jeopardizing the project ' s viability . By working with established lenders , an experienced securities counsel , and a broker-dealer and ensuring that the fine print in the lending documents does not expose the project to unforeseen risks , the Regional Center and the developer could mitigate these unexpected eventualities .
BANK FAILURES AND THEIR IMPACT ON EB-5 INVESTMENTS
In recent years , several banks serving regional centers and their EB-5 projects have failed . When a bank fails , it can significantly impact EB-5 investors who have invested in EB-5 projects . Additionally , investors may not be able to secure permanent residency if the project fails before creating the requisite number of full-time jobs for two years . The failure and collapse of Silicon Valley Bank ,
MITIGATING RISKS IN EB-5 INVESTMENTS
While there is no way to eliminate all risks associated with investing in EB-5 projects , investors can take steps to mitigate many of these risks . For example , investors should conduct thorough due diligence on the project and the project developer before investing . Additionally , investors should work with reputable regional centers having a track record of completing EB-5 projects . Finally , investors should have a clear understanding of the risks
86 EB5 INVESTORS MAGAZINE