Two years after the U.S. Citizenship and Immigration Services (USCIS) adopted Policy Manual changes addressing requirements for the redeployment of capital contributions of EB-5 investors until the end of their two-year period of conditional permanent residency, it has not provided any further guidance on these issues. EB-5 sponsors have been left to navigate this uncertain terrain using their own best judgement.
EB-5 sponsors and their advisors now seek to establish a method for redeployment of EB-5 capital that will satisfy USCIS guidelines, U.S. securities laws, EB-5 investors, and all of the other parties who collectively have an impact on the investment of EB-5 capital. In some cases, EB-5 investors have threatened — or actually filed — actions against new commercial enterprises (NCEs) as a result of the approval process and/or selection of the reinvestment.
An article I wrote for the NES Financial blog addresses some of the questions that arise when EB-5 sponsors make redeployment decisions, including:
- Should EB-5 investors be asked to approve a redeployment?
- Why not have EB-5 investors approve every redeployment decision?
- What process should be made to make a reinvestment decision that demonstrates protection of the interests of the EB-5 investors?
- Should EB-5 investors be permitted to receive repayment, rather than their funds reinvested?
I also offer some thoughts on how to address the inherent risks of the redeployment process. Read the article here.