As discussed at length at the NES Financial EB-5 Innovation Summit, the EB-5 industry’s explosive growth brings both opportunities and challenges.
With program participation skyrocketing the last 5 years, the time it takes the United States Citizenship and Immigration Services (USCIS) to process I-526 and I-829 petitions has also suffered a dramatic increase. In
2010, USCIS processing times for I-526 petitions averaged less than six months; by 2014, they had slowed to longer than a year. Given the program’s popularity, the backlog is only expected to increase.
The ever-lengthening processing times add several complications to the EB-5 process. In order for many projects to succeed, the participants must implement escrow structures in which some or all funds are released prior to I-526 approval.
Because not all I-526 petitions will be approved, projects implementing early-release structures must build in a refund mechanism for any investors that may be denied.
The lengthening of the EB-5 process timeline has implications on immigration requirements as well; investor funds must remain at risk until investors receive I-829 approval. This can place greater demands on the accounting burden for the New Commercial Enterprise (NCE) and the administrative workload for the Regional Center.
Regardless of project completion, an EB-5 investor’s capital contribution cannot be returned until the conditions have been removed from his/her green card. The NCE and the Regional Center are then forced to find ways to keep the funds at risk long after their intended use.
NES Financial’s EB-5 Solutions can help efficiently navigate these administrative complexities. Combining a Reservation Account, Intelligent Escrow, and Loan Administration solution, NES Financial can help manage investor funds throughout the entirety of the EB-5 life cycle.
As processing delays continue to complicate the already complex territory of investor repayment, our solutions can help manage both the accounting and reporting aspects, offering investor security as well as USCIS compliance.
What is EB-5? Find out more by downloading our EB-5 Solution kit.
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