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The EB-5 Immigrant Investor Program provides foreign nationals with the opportunity to obtain U.S. permanent resident status, making it a popular route for investors to migrate to the United States. The program is also beneficial to U.S. businesses, which can receive secure capital through EB-5 investment funds.
However, one of the biggest concerns of foreign nationals pursuing the EB-5 investment visa is the risk that their visa petitions may be denied. United States Citizenship and Immigration Services (USCIS) sets out clear regulations for the EB-5 investment program, and investors need to prove that their investments have complied with these regulations. These include the requirement for the capital to remain at-risk throughout the investment period, for the investment to generate at least 10 qualifying jobs, and for the investor to demonstrate that their investment was made with legal funds.
USCIS adjudicates each EB5 investment through two visa petitions. These are Form I-526, after which an investor is granted conditional permanent residency, and Form I-829, after which the investor and their family are granted permanent resident status. However, if either of these visa petitions fails to prove that the investment complies with USCIS regulations, the investor will not receive their green card.
There are several common reasons for EB-5 visa petitions being denied by USCIS. In this article, we explain how EB-5 investors can avoid these mistakes.
Non-Compliant EB-5 Projects
EB-5 investments are only valid if the EB-5 business in question adheres to USCIS requirements. These regulations govern how the investment is made and how the capital is managed during the investment period. EB-5 investment funds must remain at risk, meaning the investor could potentially experience losses. Any clause that guarantees a return on all or some of the capital means that the funds are not at risk. Such capital is not eligible as an EB-5 investment.
Potential investors need to be discerning in selecting their EB-5 project, as not all available projects are fully compliant with these regulations. They will need to demonstrate that their funds are at risk in both the I-526 and I-829 visa petitions.
Lack of Evidence of Legally-Sourced Funds
USCIS also asks investors to prove that the capital used in the investment is legal. This means that investors must trace the funds back to their source in great detail. The type of evidence required at this step depends on where the investor sourced their funds from. For example, if the funds are from the sale of real estate, USCIS requires evidence related to the sale of the property and to the original acquisition of the property.
Incomplete, Inaccurate, or Inconsistent Data
With the multitude of facts that must be presented and evidenced in the I-526 and I-829 petitions, there is the potential for information to be missed or written inaccurately. However, in order for USCIS to approve the visa petition, all information must be consistent and accurate. It is vital that an investor and their immigration counsel ensure consistency in the data before filing each petition.
One common pitfall regarding the consistency of data occurs in relation to business plans. In the I-526 visa petition, an investor must submit the business plan, financial projections, and employment schedule for their EB5 investment project. However, changes to the project that occur before Form I-526 is filed can lead to inconsistencies, with old figures cited in some areas and new figures in others. In this case, USCIS may send a request for evidence (RFE).
While the requirements for an EB-5 investment are undoubtedly complex, it is possible to navigate them successfully with the help of an immigration attorney experienced in the EB-5 industry. Foreign nationals interested in pursuing an EB-5 visa should familiarize themselves with USCIS regulations and stay informed of changes in the EB-5 industry.
