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On July 24, 2020, USCIS finally issued policy guidance to clarify redeployment of EB-5 capital.
Redeployment of EB-5 capital is relevant for many investors whose country of origin is currently facing visa retrogression. It’s a tool to keep their investment at-risk, maintain EB-5 program eligibility, and ultimately obtain U.S. green cards.
In 2017, USCIS issued an update to their Policy Manuel to address EB-5 redeployment of capital to maintain an investor’s “at-risk” program requirement. Now they’re adding “guidance on maintaining EB-5 eligibility through further redeployment.” From the policy:
- Policy Highlights
Clarifies requirements for deployment of capital generally, including providing new language regarding the deployment of capital through any financial instrument that meets applicable requirements as well as explaining how the purchase of financial instruments on the secondary market will generally not satisfy such requirements.- Clarifies that capital may be further deployed into any commercial activity that is consistent with the purpose of the new commercial enterprise to engage in the ongoing conduct of lawful business. This clarification is meant to address potential confusion among stakeholders regarding prior language about the “scope” of the new commercial enterprise while remaining consistent with applicable eligibility requirements.
- Provides that further deployment must be through the same new commercial enterprise.
- Provides that further deployment must be within the geographic area of the same regional center, including any amendments to the regional center’s geographic area approved before the further deployment.
- Explains that, based on an internal review and analysis of typical EB-5 capital deployment structures, USCIS generally considers 12 months as a reasonable amount of time to further deploy capital, but will consider evidence showing that a longer period was reasonable.
Conclusion:
USCIS’s policy is essentially, an EB-5 investor generally has up to one year to redeploy funds into an at-risk in-commerce lawful business. Additionally, it must be deployed within the same geographical area of the same regional center, which may be problematic if the policy is retroactive and investors who redeployed funds years ago did not redeploy into the same regional center geographical area.
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