According to Charles Oppenheim, chief of the U.S. State Department Visa Control and Reporting Division, India is expected to hit its EB-5 annual cap from June or July 2019 and its applicants will face visa retrogression going forward.
This means an Indian applicant receiving I-526 approval ahead will have to wait for the USCIS to announce a cut-off date earlier than the I-526 filing date/priority date to apply for the conditional green card.
This is very significant because the EB-5 program requires investors to maintain ‘at risk’ status of capital through I-526 petition approval till the end of the two-year period of conditional permanent residence.
With those filing after May/June 2019 facing an eight-year waiting period, Indian investors must be prepared for the eventuality of redeployment or further deployment of the capital.
Read more about EB-5 Investor Visa for India.
What Necessitates Redeployment of Capital?
A typical EB-5 Regional Center investment consists of a Regional Center-sponsored New Commercial Enterprise (NCE) and an independent Job Creating Enterprise (JCE). The NCE receives the EB-5 investments and loans the same to the JCE for execution of the project and creation of jobs.
Since these loans are normally made for a tenure of five years, visa retrogression may lead to a situation where repayment becomes due before the investor obtains conditional permanent residence.
Since the money remaining idle with the NCE does not fulfill the ‘at-risk’ requirement, the same must be redeployed to maintain the investor’s eligibility for the EB-5 visa.
Scope of NCE’s Business and At-Risk Status
Matter of Izummi defines ‘at risk’ status in terms of absence of guaranteed returns of or on the invested capital. In its June 2017 amendment to the Policy Manual, USCIS requires the investor to fulfill the at-risk requirement in a manner related to engagement of commerce and within the scope of the NCE’s business.
This means the NCE’s scope of operations must be assessed with a view on original deployment as well as potential redeployment of capital in the future.
Job Creation Requirement
Whether the NCE has fulfilled the job creation requirement or not has a significant impact on redeployment of capital.
If the requisite jobs have not been created and conditional permanent residence is pending, then the at-risk and scope of NCE’s business will be interpreted very rigidly.
If the jobs have been created, then redeployment is unlikely to impact the investor negatively as long as the at-risk requirement is met at all times.
Redeployment Delay
Redeploying capital is as important and vital to the investor as the original deployment. Hence, a certain amount of delay between repayment of the loan by the NCE and redeployment to the same or a different NCE is inevitable.
USCIS does not define this time period but requires redeployment to take place within a commercially reasonable time. Of course, the ideal strategy would be to anticipate the need for redeployment and to finalize the same at the earliest.
With Indian demand for EB-5 set to rise further in the future, investors should opt for professional advice and assistance incorporating redeployment into the preliminary EB-5 investment strategy itself.
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