On August 29, 2016, the U.S. Citizenship and Immigration Services (“USCIS”) hosted a “make-up” teleconference engagement with members from the Immigrant Investor Program Office (“IPO”) due to the poor technical audio issues at the July 28, 2016 engagement. USCIS did not repeat remarks previously made by IPO Chief Nick Colucci or by IPO Division Chief Lori Mackenzie.
Here are some interesting issues raised during the recent EB-5 stakeholder engagement:
- Update on Minors as Investors. IPO stated there is no age restriction in EB-5 regulations but also indicated that a minor normally lacks legal capacity to enter into certain types of contracts that are necessary to demonstrate the qualifying investment. The discussion indicated that an investor has the burden of proof to alleviate any concerns related to a minor’s capacity to contract and the possible voidability of contracts signed by a minor. Unfortunately, the IPO did not provide guidance on what documents could be used to prove that the investment contracts were binding, and the funds irrevocably committed and they indicated that each case would be analyzed on a case-by-case basis. Additionally, the IPO stated for the first time, that funds gifted by a minor investor’s parents can be wired directly into the projects escrow from a parent’s bank account, as long as child principal applicant can demonstrate his or her ownership of those funds (i.e. that the parents are transferring funds on the child’s behalf). For more information about minors as primary EB-5 applicants, click here and here.
- Customer Support Information for Chinese EB-5 Investors. The IPO has published a Chinese-language version of the EB-5 customer support page. This has been done in recognition of the fact that the vast majority of investors are Chinese and will assist Chinese EB-5 investors with inquiries. IPO Director Nick Colucci mentioned that duplicate inquiry requests will be ignored and he advised all to wait at least 15 days before submitting another inquiry.
- Sustained Investment at I-829 Stage. IPO Deputy Chief Julia Harrison mentioned during the Q&A session that an investor “must sustain an investment during the two-year conditional residence period.” This is consistent with applicable regulations at 8 CFR 216.6. The draft policy memorandum provided in August 2015 created confusion regarding this requirement due to the use of the term “throughout the sustainment period.” Because there is an average processing time of 21.3 months for Form I-829s, as of June 30, 2016, any other interpretation of the regulation would pose a considerable additional burden on EB-5 projects and investors, especially Chinese nationals subject to the extended quota-based wait line. We look forward to clarifying guidance from USCIS on the issue but do not expect any until 2017.
- Incorrect Factual Information in RFEs and NOIDs. In the event there is incorrect factual information in a Request for Evidence or Notice of Intent to Deny (like the name of certain entities), the IPO recommends using the email inquiry system (ImmigrantInvestorProgram@uscis.dhs.gov) to notify USCIS of the factual error, and if correct, USCIS may issue a replacement notice but only if the error impacts the ability to respond. Whether or not USCIS will do so within the strict 30-day period to respond to a NOID is not clear, so investors and their attorneys should still be prepared to respond to the NOID and in the process point out the incorrect factual information that USCIS based its analysis on.
- Use of Loans as EB-5 Investment Funds. The IPO confirmed that proceeds from a loan may qualify as capital used for EB-5 investments, as long as the indebtedness is secured by assets owned by the alien entrepreneur and the alien entrepreneur is personally and primarily liable for the indebtedness. Click here for more information on how the USCIS Administrative Appeals Office has recently ruled on this critical issue.
- Unanswered Questions. There were also many questions left unanswered by IPO, for example: (a) the status of pending I-526 petitions associated with a Regional Center that has been terminated; (b) the transfer of funds from an investor’s “friends and family” directly into project escrow; (c) the need to sustain job creation throughout the adjudication of a Form I-829; and (d) the future use of Chart B – Date for Filing for Adjustment of Status in order to “freeze a derivative beneficiaries age” under the Child Status Protection Act.
We are hopeful USCIS will provide answers to these critical issues as soon as possible and thank the IPO for providing meaningful guidance to immigrant investors and attorneys.
If you would like to schedule a professional consultation to ask questions about IPO’s recent remarks or to discuss your immigration case, please contact a Wolfsdorf Rosenthal LLP attorney.
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