Many EB-5 applicants opt for investing in Regional Centers, which are projects that serve as pools of capital for foreign investments. The United States Citizenship and Immigration Services (USCIS) provides that the amount required must be placed “at risk” in a US enterprise.
What happens if an EB-5 project fails? Read on to find out.
EB-5 Investment Requirements – The Basics
Effective March 15, 2022, the EB-5 Reform and Integrity Act authorized the re-introduction of the Regional Center Program through September 20, 2027. Currently, EB-5 petitioners have the option to form a new business or invest in an USCIS-supervised project to generate jobs.
The minimum amount of investment eligible for an EB-5 application is $1,050,000 for businesses or regional centers not located in Targeted Employment Areas (TEAs). Applicants opting for investing in a TEA may qualify for a reduced investment of $800,000, which also includes infrastructure projects.
What Happens If EB-5 Project Fails? – In Detail
The primary element to determine what happens after an EB-5 project fails is whether the applicant invested in a standard business or opted for investing in a Regional Center. USCIS expressly provides that EB-5 investments must boost job creation in the United States.
If an EB-5 project fails to meet the job creation requirements, it will likely result in exponential losses in capital and a green card denial. The next question is whether investors can have the invested amount reimbursed. The likelihood of reimbursement depends on the investment option.
When an investor uses the amount to form or purchase a standard business, the answer varies according to the business structure, the investor’s arrangements to react to an eventual failure, etc.
However, those opting for investing in Regional Center heavily depend on the proposal of each project. Some Regional Centers have arrangements that protect foreign investors in the case of an eventual failure, allowing investors to file a new petition or amend an existing petition.
While these terms help investors to get a new chance in the program, the reimbursement of the amount invested is not guaranteed. As provided by 8 C.F.R. §204.6(j)(2), an EB-5 applicant must provide “evidence that has placed the required amount of capital at risk for the purpose of generating a return on the capital placed at risk.”
If a Regional Center offered a “guarantee of return,” it would fail to meet the “at-risk” criteria established by USCIS. The agency has published memorandums with language stating that the “promise to return any portion of the immigrant investor’s minimum required capital negates the required element of risk.”
Please note that some EB-5 investors can recoup the amount lost after facing a denial of Form I-526 (Immigrant Petition by Standalone Investor). Some Regional Centers maintain the funds invested in escrow while Form I-526 is pending.
Depending on the terms of the escrow agreement, applicants may be reimbursed in the event of a denial of the petition. Ultimately, EB-5 applicants opting for Regional Centers must assess each proposal and thoroughly review the terms and conditions of each project.
Do You Want to Increase Your Chances When Applying for an EB-5 Visa? – Immediately Seek Expert Legal Guidance
Work with an expert immigration attorney to find the best route for a successful EB-5 investment. Call Attorney Romy B. Jurado today at (305) 921-0976 or email [email protected] for an individual assessment.
