On September 10, 2014, the United States Citizenship and Immigration Services (USCIS) hosted its Quarterly EB-5 Stakeholder Engagement Teleconference. At the top of the call, Chief of the Immigrant Investor Program, Mr. Nicholas Colucci, offered some substantive information which should serve as helpful guidance for many industry stakeholders. The USCIS also commented on a specific I-924 petition that had been filed with an exemplar I-526 petition and had been issued an RFE due to the use of a holdback structure designed to refund any investor whose I-526 petition had been denied. After careful consideration, which took far longer than originally anticipated, the USCIS subsequently issued the exemplar approval. While the Service made it clear that they review each petition on a case specific basis, they did describe for all participants on the call the exact structure of the holdback that they now find acceptable. It was encouraging to hear that they took the time to review the case and the holdback issue broadly and relay their findings to the stakeholders. Holdback structures in EB-5 are highly specialized and significant care must be taken to ensure that they meet the collective needs of not only the key stakeholders, but also the USCIS. Specifically, a successful structure will satisfy the security needs of the investor, the timing needs of the project and developer, and the compliance needs of the USCIS. From an NES Financial perspective, the fact that the Service took the time to understand the mechanics of the structure and how sweeping its implementation had already been leading to their approval is great news. Our company has invested significant time and energy in partnership with our banks and some of the leading immigration and securities attorneys in the EB-5 space to craft a compliant holdback structure that meets the collective needs of our clients. This serves as a reminder that as our industry continues to evolve, the level of specialization required to be successful in navigating the complexity of the EB-5 space will rise, and working with industry experts will be more important than ever before.
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