The EB-5 investment community is facing a new challenge. As many of the more seasoned EB-5 investment projects begin to mature, the original investment capital is returned by the project owner to the new commercial enterprise.
USCIS has clearly stated its policy that EB-5 investment capital is required to remain “at risk” in the new commercial enterprise until each EB-5 investor’s I-829 petition is adjudicated. However, USCIS has provided no guidance on what requirements that new investment is required to meet, other than that it must meet the definition of “at risk.”
NES Financial’s EB-5 Medallion Solution Partners Klasko Immigration Law Partners, LLP and Arnstein & Lehr, LLP have undertaken the task of proposing a set of standards and guidelines for redeployment of EB-5 investment capital in a White Paper with the intent that the principles of redeployment stated will be accepted by USCIS and by the EB-5 investment community.
The standards expressed in this White Paper should meet the “at risk” requirements established by USCIS, and should also meet the requirements of federal securities laws and the fiduciary duties of the general partner or manager of each new commercial enterprise when making a decision to redeploy investment capital in a new investment.
While acknowledging that this is an evolving issue and that new developments may occur that require changes in these proposed standards and guidelines, it is important to the EB-5 community that these standards and guidelines be offered as a model now, so that new commercial enterprises have a basis for analyzing options when the need to redeploy investment capital becomes a reality.
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