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Although the EB-5 Immigrant Investor Program is one of the fastest and easiest ways to immigrate to the United States, there are still many challenges that EB-5 investors face. Many who have made an EB-5 investment are subject to extremely long processing times for their EB-5 petitions. The year 2020 has created many new challenges for EB-5 investors, such as financial struggles for United States Citizenship and Immigration Services (USCIS), the temporary closures of U.S. embassies, and the termination of many EB-5 regional centers. And to top it all off, those making an EB5 investment also have to deal with unclear instructions for I-526 petition requirements.
In May 2019, I-526 petition adjudicators received new training materials from USCIS. Invest in the USA (IIUSA), an EB-5 trade association, filed a lawsuit to get USCIS to release the documents so that the information would be public for EB-5 investors. However, USCIS only released the documents to IIUSA, who now offers them as a member benefit.
These new training materials can help guide those making an EB-5 investment when completing their I-536 petition. The information can help investors understand what adjudicators are looking for and how to better their chances of getting approved. Unfortunately, some of the adjudication instructions are still vague, which leads to inconsistent decision-making by the Immigrant Investor Program Office (IPO).
Unclear Source-of-Funds Requirement
The new adjudicator training materials released in May 2019 include the following paragraph in section 8 CFR 204.6 (g)(1):
“The establishment of a new commercial enterprise may be used as the basis of a petition for classification as an alien entrepreneur even though there are several owners of the enterprise, including persons who are not seeking classification under section 203 (b) (5) of the Act and non-natural persons, both foreign and domestic, provided that the source(s) of all capital invested is identified and all invested capital has been derived by lawful means.”
The confusion emerges from the phrase “all capital,” which has led to differing interpretations due to its vague wording. While most adjudicators understand this requirement to mean “all capital” invested by the applicant whose petition is being evaluated, some adjudicators have interpreted the phrase to mean all capital invested in the EB-5 project, including that of other investors. This has led to adjudicators requesting that EB-5 investors document the lawful sources of investment capital that is not their own.
EB-5 investors should not be responsible for the investment capital of any other investor, although each EB-5 applicant must document the lawful sources of their own investment capital. Therefore, USCIS will still find any illegitimate investment capital even if each investor does not document all capital invested in the EB-5 project. EB-5 investors should not have their future jeopardized because of the failings of a separate EB-5 investor. This would also put those who chose to invest through a regional center at a much higher risk, as such EB-5 projects typically have many EB-5 investors involved in the same EB-5 project.
Because of these broad interpretations, many EB-5 investors have received requests for evidence (RFEs) asking for information that does not pertain to their own investment capital. In December 2019, multiple EB-5 investors received RFEs requesting government ID, tax return information, and bank statements of each other investor involved in the EB-5 project. Although EB-5 investors are not officially required to submit information pertaining to other investors, this broad interpretation of the source-of-funds requirement can lead to more delays in the adjudication process. Without more clear instructions in place, each investor is subject to the interpretation of their specific adjudicator, which could negatively impact their future. Those planning an EB5 investment should keep this potential obstacle in mind if USCIS does not clarify its instructions.
