There are many possible redeployment solutions for EB-5 funds as well as how both the new commercial enterprises and EB-5 investors might go about implementing them. New policy updates have been issued by USCIS that impact the process for redeployment planning.
THE SUSTAINMENT PERIOD
When a new commercial enterprise( NCE) loans money to a job creating entity( JCE) or related affiliate, the JCE typically completes the project successfully and is able to repay the loan to the NCE within 4 to 5 years of an investor’ s I-526 petition filing. Given the current retrogression climate, when dealing with investors from Mainland China and Vietnam, the question arises as to how the NCE should go about keeping the funds“ at risk” when the lengthy adjudication / retrogression process prevents a Mainland China or Vietnam investor from becoming eligible for an I-829 petition for at least another 3 to 12 years.
"... Guidance from USCIS now states that funds must be redeployed in a manner related to engagement in commerce..."
In addition, USCIS updated the definition of the period in which an EB-5 investment must remain“ at risk”( the sustainment period) in its June 14, 2017, Policy Manual update to include the conditional residency period, effectively adding another two years to the investment period.
EB-5 investors born in Mainland China and Vietnam represent an estimated 85 percent of the active EB-5 capital today. In addition, they are the only investors who currently face a visa cap, a condition that stems from their strong demand for participation in the program. Given the pace at which Chinese and Vietnamese EB-5 investors have been filing I-526 petitions over the last few years, and barring any congressionally-granted infusion of additional visas, the retrogression wait is projected to remain extended for the foreseeable future.
Given such facts, it is imperative that NCEs begin, if they have not already done so, to analyze the possibility of new qualifying investments that may undertake the redeployed funds following project completion and / or EB-5 capital repayment by the JCE or its affiliate. While some NCEs are still in the I-526 subscription phase and have some time before the urgency for redeployment kicks in, many NCEs are facing the redeployment conundrum in 2018.
ALLOWABLE INVESTMENTS
USCIS has issued additional clarifications regarding allowable
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