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4 Reasons to use an escrow in EB-5

Many hopeful immigrants who wish to invest in projects in the United States through the USCIS EB-5 Immigrant Visa program seek assurances that their investment funds will be properly administered. Escrow Accounts, while new to many of them, offer just this type of assurance.  There are a variety of benefits to this structure, and many Regional Centers find that it provides them with a competitive edge over other Regional Centers. Here are a few bullet points on what the investors gain when the Regional Center offers an escrow:

1. Funds Availability. Investors can be leery about wiring their funds directly  into the investment projects before knowing if they will be granted a conditional green card. When the funds are wired to an escrow account, they are afforded the comfort of having controls in place governing the holding of their funds during the I-526 application process. This ensures that the funds will not be disbursed at any time or to anyone unless the conditions in the Escrow Agreement have been met.  Most importantly, in the event an investor’s I-526 application is denied, the funds remain available to be returned to the investor.

2. Proven Custodians. Investors want to know where their money is at all times. Funds held in an Escrow Account remain on deposit in a bank whose reputation and experience may be vetted by the investors.  Without the escrow account, the funds would be sent to a new enterprise which has yet to prove its track record.

3. Funds Security. The investors want the maximum safety of their funds while held in escrow. Funds deposited in escrow accounts are typically insured by the FDIC, while funds invested directly into a project carry no such coverage.

4. Added Efficiency. Many Regional Centers will require a minimum amount of capital to be raised before the project will move forward or else the funds must be returned to the investors.  By aggregating the funds in an escrow account, the Regional Center can quickly and easily monitor the balances and know when the minimum has been reached.    If the funds have already been invested into a project, tracking those balances becomes much more difficult.

The investors’ main goal is to make an investment which leads to securing their visas. An escrow account allows the investors peace of mind during the application phase.  For Regional Centers on their own, establishing and maintaining these escrow accounts is challenging. The NES Financial solution navigates this process for the Regional Centers and allows them to offer exactly what their investors are looking for.

To learn more about NES Financial’s EB-5 administration solutions, click here.

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