During a USCIS Stakeholders Meeting in 2018 Colin Behring received confirmation from IPO Deputy Director Ricky Murray that partial capital contributions can be made in compliance with the program requirements. Many people know of Behring for unmatched EB-5 products and successful litigation, but this moment changed the landscape for the entire investor class.
What was the EB-5 landscape like in 2018?
In 2018 the majority of Regional Center filings were from overseas, placed by agents with full capital contributions. Direct, or “standalone” investors were typically already in the United States operating and financing their own project, spreading out their capital contributions.
For investors in the United States already, adverse to the risks of the standalone format, a properly crafted partial payment plan with a Regional Center allows investors to file without sourcing the full amount.
Colin got a response from IPO? What was the question and what was the answer?
Colin Behring: “On the Form I-526 it does mention that the $500,000 investment needs to be in the process of being made. Can we get clarity on if investors are making partial capital contributions and when the full investment needs to be completed?”
Deputy Director Ricky Murray: “You are correct it does need to be in the process of investing. I will say the vast majority of our cases have a full investment at the time of filing. It is not something that is very common to have in the process of investing, generally when we see that it would be in the standalone context, but I don’t have any examples, it would be too case specific to show what that looks like but the regulation does specifically say that you can be in the process of investing, so that is the standard we use to adjudicate those cases.”
(Credit to Suzanne Lazicki for keeping records of previous USCIS EB-5 Stakeholder calls such as this one.)
What happened next?
Since 2018, Behring has been able to craft compliant agreements with investors to demonstrate their commitment to the fund and has achieved a 100% success rate in USCIS approvals. Thanks to the visionary Nima Korpivaara and his partners Phuong Le and Niral Patel at KLD LLP, this strategy is now templatic within the actual I-526E Form and clearly presented on the USCIS.gov website.
“Petitioners must show actual commitment of the required amount of capital at the time of filing but do not need to have fully contributed their capital investment to the new commercial enterprise…instead, they may be actively in the process of investing the minimum investment.”
What is the typical payment arrangement?
Investors first need to select law firms and Regional Centers with approval history, because simply wiring money with a letter of intent is different from evidence of the commitment to the fund.
Investors also need to be aware that if USCIS picks up the I-526E application before all the capital is provided, a Request for Additional Evidence is a certainty.
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