Deepa Ramchandran

How are EB-5 funds usually returned after I-829 approval?


Fredrick  Voigtmann
May 26, 2015 11:38 AM  Fredrick Voigtmann

The return of funds (the principal invested) typically can occur in one of two ways, depending on the type of EB-5 investment. In a loan model (which is really an equity investment in an NCE and a loan from the NCE to the JCE), the return of principal is "funded" when the JCE repays the loan to the NCE and the NCE "cashes out" its investors. In an equity model, the investor must find a willing buyer (sometimes the NCE or developer, sometimes an unrelated entity) to purchase his or her equity interest in the NCE at fair market value. Hopefully, the FMV is equal to or greater than the investor's initial capital contribution. As you noted in your question, the return of funds cannot be contemplated or activated before I-829 approval.

Philip Cohen
December 06, 2015 10:14 AM  Philip Cohen

Remember that if funds are returned to the NCE early, that they must be kept at risk, so make sure that your subscription agreement includes terms for redeployment of capital to an 'at risk' investment for this circumstance.

Mark Ivener
December 10, 2015 06:04 PM  Mark Ivener

It depends on your contract with the regional center.

A. Olusanjo Omoniyi
June 24, 2016 05:04 PM  A. Olusanjo Omoniyi

The terms of agreement you have with the regional center should typically spell out the exit strategies.

Gerald  Cipolla
February 08, 2017 10:52 AM  Gerald Cipolla

It depends on whether the EB-5 investment invested or loaned the EB-5 funds to the job creating enterprise. If the funds were loaned, then the loan agreement should provide the term of the loan and repayment of the loan to the EB-5 new commercial enterprise, which will then return the funds to the EB-5 investor. If the EB-5 funds were invested as an equity stake in the job creating enterprise, it becomes a little more complex. In either a loan or equity investment into the job creating enterprise, or into the new commercial enterprise, there should not be any language to guarantee the return of the funds (ie. a redemption agreement). The investors right to demand return of the capital or have an option to call the investment often leads to the interpretation that there is a redemption agreement, which generally leads to a denied I-526 petition.

February 22, 2017 03:22 AM  

All depends on the regional center. Make sure you work with one that will and can return your funds.

Sally Amirghahari
June 27, 2017 08:32 PM  Sally Amirghahari

You should refer to the terms of the Partnership Agreement since Regional Centers have different terms with respect to return of the fund. As such it is crucial for you to do your due diligent regarding return of capital before entering into an agreement.

Marko Issever
October 01, 2017 10:20 PM  Marko Issever

It really differs from transaction to transaction. We advise our clients to read the Private Placement Memorandum very carefully or work with an EB-5 professional to explain to them how the EB-5 funds are returned after I-829 approval in their specific situation. You might want to review this link published by the USCIS:

Scroll down and read Footnote 4. It says See 8 CFR 216.6(c)(1)(iii). The sustainment period is the investor’s 2 years of conditional permanent resident status. USCIS reviews the investor’s evidence to ensure sustainment of the investment for 2 years from the date the investor obtained conditional permanent residence. An investor does not need to maintain his or her investment beyond the sustainment period.

Gregory Finkelson
June 27, 2018 03:06 PM  Gregory Finkelson

It depends on the project, and some projects’ funds return after 6 months or later. Some projects may not be returned at all.


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