2020 has been a rocky year for just about everyone, individuals and organizations alike, and United States Citizenship and Immigration Services (USCIS) has suffered significantly due to the lull in immigration spurred on by the COVID-19 pandemic. Family-based visa processing has been largely suspended, President Trump’s immigration ban on most types of employment-based immigrants has slowed down immigration to the United States, and fear, travel restrictions, and scarcely available flights have curbed tourism. Against this background, it’s no wonder that USCIS, which largely funds its operations through filing fees, has been struggling to stay afloat.

In August 2020, fears of a massive USCIS furlough, which would see 70% of its staff let go, were rampant among U.S. immigration professionals and prospective immigrants. With only 30% of its workforce left, the immigration body would hardly have had the resources to continue adjudicating EB-5 petitions, such as Form I-526. Fortunately, to the relief of EB-5 investors everywhere, USCIS managed to narrowly avoid the scheduled furlough by cutting expenses and upping revenue and receipts. How long the agency can continue to avoid such dramatic measures is unknown.

To address its financial woes, in August 2020, USCIS announced the August 2020 Final Rule, which included plans to increase the filing fees of certain petitions, set to go into effect on October 2, 2020. Fees for forms I-526 and I-829, filed by those who make an EB-5 investment, were set to increase by $335 and $150, respectively, and fees for Form I-924, filed by those who wish to launch an EB-5 regional center, were supposed to jump up by a whopping $1,430.

August 2020 Final Rule Enjoined

On September 29, 2020, a district court enjoined the August 2020 Final Rule, preventing it from being implemented. Thus, USCIS filing fees did not increase as planned on October 2, 2020. While this may initially come as a relief to those planning to make an EB5 investment, it could spell a disastrous future for the immigration body.

USCIS Deputy Director of Policy Joseph Edlow warned the enjoinment could have grave consequences for USCIS and the future of U.S. immigration. Each day the fee hike is enjoined, USCIS loses millions of dollars, which may trigger a furlough like the one averted in August 2020. USCIS funds itself primarily through filing fees, and every two years, the organization conducts a fee review to determine whether the fees need to be adjusted and by how much. Thus, Edlow stressed, the fee increase is completely normal. In fact, USCIS is behind in its biennial fee reviews, and the proposed fee increases are smaller than they have been in previous years. Blocking the fee hike from taking place could harm USCIS’s long-term endeavors and is overall bad for the United States and its development.

In lieu of the proposed fee hike, USCIS is now obligated, under the new Continuing Appropriations Act, 2021 and Other Extensions Act (H.R. 8337), to increase premium processing fees. The legislation was signed into law on September 30, 2020, and covered the extension and funding of various government programs, including the EB-5 Regional Center Program. USCIS also has the option of adding more premium fees, but whether the organization will do so is as of October 6, 2020, unknown. Either way, EB-5 investors are not included in any of the listed case types for premium fees, so any changes to premium fees are not likely to affect EB-5 investors.

The Department of Homeland Security (DHS) has announced a new proposed rule change that would negatively affect the over one million international students currently in the United States. The Notice of Proposed Rulemaking; Establishing a Fixed Time Period of Admission and an Extension of Stay Procedure for Nonimmigrant Academic Students, Exchange Visitors, and Representatives of Foreign Information Media would replace a proven, flexible policy that brought millions of international students to the United States along with billions of dollars to the economy.

Studying in the United States has always been a dream of foreign nationals worldwide because of the exceptional post-secondary academic institutions, cutting-edge technology, and the freedom to share thoughts and ideas.

The current policy which has been in effect for decades, states that student visas are good for “duration of status,” which means students can stay in the U.S. indefinitely if they remain enrolled in school and comply with the terms and conditions of their immigration status.

Under the proposed rule, the DHS would set fixed terms of up to four years for student visas and all international students who wished to continue their studies beyond their authorized term would be required to file for an extension directly with U.S. Citizenship and Immigration Services (USCIS) or depart the country and reapply for admission with U.S. Customs and Border Protection (CBP). Students from countries with high visa overstay rates (greater than 10% for student and exchange visitors) and those who were born in or have citizenship from countries on the State Sponsors of Terrorism list will be limited to an initial two-year fixed period of stay in order to enhance monitoring, deter immigration violations, and encourage timely departure, the official statement said. Applications for extensions of stay could be approved “if the additional time needed is due to a compelling academic reason, documented medical illness or medical condition, or circumstance that was beyond the student’s control,” but the grounds for an extension are very limited.

According to the Trump administration, “this proposal would provide the DHS with additional protections and mechanisms to exercise the oversight necessary to vigorously enforce our nation’s immigration laws, protect the integrity of these nonimmigrant programs, and promptly detect national security concerns.”

Instead of worrying if or when this proposed rule goes into effect, there is currently a better and more flexible option—The EB-5 Immigrant Investor Program. The EB-5 Program offers foreign investors with the required capital a simple path to a U.S. Green Card and permanent residency. One of the many benefits of obtaining a green card is that permanent residents have a greater chance of being accepted to U.S. colleges and universities. With competition for international student spots at U.S. universities increasing, applying as a domestic applicant increases a student’s chance of admission by 350%. Additionally, green card holders can significantly lower tuition costs by qualifying for in-state college tuition, financial aid, and scholarships. Permanent residents also don’t have to worry about completing their studies in four years or less before being sent back home—because they are home.

By using gifted funds from family, an international student interested in pursuing an undergraduate or graduate degree can invest in his or her dream of a first-class education in the best university system in the world through the EB-5 Program. The program is open to anyone who can meet its requirements—investing $900,000 or $1.8 million in a new commercial enterprise, with the investment creating 10 full-time, permanent jobs for U.S. workers. Applicants don’t need to be sponsored by a U.S. employer, and they don’t need any specific knowledge, skills, or experience.

The value of a U.S. post-secondary education is multifaceted and cannot be overstated. It can be a life-changing experience for students from all over the world and will put them on the right path to professional success. An investment in the EB-5 Immigrant Investor Program is an investment in the future.

EB-5 investors who conduct proper due diligence are generally successful. Indeed, most EB-5 investors end their EB-5 journey by obtaining U.S. green cards for themselves and their immediate family members. That being said, each year, some EB-5 investors face denial, halting their dreams of a better life in the United States.

The reasons an EB-5 petition may be denied are manifold, but some are more common than others. Below are a few of the most common reasons EB-5 investors have their petitions rejected.

Investing less than required or investing in an ineligible project

The minimum required EB5 investment amount is $1.8 million, although this drops to $900,000 if the project is in a targeted employment area (TEA). If an EB-5 investor fails to invest the minimum required amount, their I-526 petition will be denied.

It’s also crucial to invest in a project that qualifies for the EB-5 program and, if you’re investing through an EB-5 regional center, to conduct thorough due diligence to ensure you work with a highly reputable developer and regional center. In 2019 and 2020, regional center terminations have skyrocketed, putting investors who fail to carefully vet regional centers before diving into an investment at risk.

Willfully misrepresenting information in an EB-5 application

Even if an EB-5 investor feels inclined to skew the facts to produce a better-looking application, they must resist the urge. If they intentionally misrepresent any material facts or otherwise submit a fraudulent EB-5 application, they may be permanently prohibited from obtaining a U.S. green card and may even be barred from entering the United States.

Not providing accurate or consistent information

It’s crucial to ensure the information an investor includes on their I-526 petition is as accurate as possible. Investors should collaborate with an experienced EB-5 immigration lawyer to gather all the necessary documentation and compile a suitable I-526 petition. Investors are also advised to double- and even triple-check all the information in their petition before filing it. While inconsistent information may lead to a request for evidence (RFE) rather than a denial, it’s best to prepare well in advance to avoid any delays.

One aspect of the I-526 petition that’s particularly tricky is the source-of-funds requirement. All EB-5 investors must demonstrate that their investment capital derives from lawful sources, but depending on the source of their funds, this can be a difficult and time-consuming endeavor. On the I-829 petition, filed later in the EB-5 process to remove the conditions of the investor’s permanent resident status, an investor must provide evidence that their EB-5 investment has remained “at risk” for the duration of the investment period, which is another area where meticulous care is warranted.

Children aging out or getting married

With an EB5 investment, a foreign national can secure a U.S. green card not only for themselves but also for their spouse and children. However, the ability to add children to one’s EB-5 application is contingent on the child being younger than 21 and unmarried, and the long wait times associated with the EB-5 program, especially for investors from backlogged countries, can complicate familial immigration matters.

For the purposes of immigration, the ages of dependent children of EB-5 investors are frozen until I-526 approval is granted, which means a child aged 21 or older may still be eligible for an EB-5 green card as long as they were younger than 21 when the I-526 petition was filed. However, in the case of delays in receiving a visa appointment—such as the closure of U.S. embassies and consulates due to a global pandemic—children are not protected from aging out. Similarly, the longer investors must wait for EB-5 approval, the higher the likelihood that a child will marry and become ineligible.

The ineligibility of a child won’t cause USCIS to deny the investor’s EB-5 petition for the entire family, but the child in question will not be qualified to receive permanent resident status in the United States, so it’s important for families to make careful considerations regarding their children.

Other reasons for denials

EB-5 investors may face denial for any number of other reasons as well, including health reasons, previous criminal convictions, or security-related concerns. EB-5 investors can get a more comprehensive idea of the reasons for potential denial on the U.S. Department of State – Bureau of Consular Affairs website.

What do you if you receive a denial?

Having your EB-5 petition denied is disheartening, but depending on the reason, it doesn’t necessarily mean your EB-5 dreams are over. USCIS should specify the reasons for denial, giving the investor a clear picture of the situation and what they did wrong (if anything). EB-5 investors still have various options, including filing an appeal or seeking alternative immigration pathways, if their EB-5 petition is denied. Consult an experienced immigration attorney to determine the best solution for you.

The U.S. Second Circuit Court of Appeals published its decision allowing the Department of Human Services (DHS) to recommence the implementation of the Public Charge Ground of Inadmissibility final rule on September 11, 2020. According to an alert from United States Citizenship and Immigration Services (USCIS), the decision stays the injunction, which was issued in late July 2020, that prevented the public charge final rule from being enforced during a national health crisis (the COVID-19 pandemic).

The final rule is legislation that outlines requirements pertaining to grounds of immigrant inadmissibility based on current or projected status as a public charge. Because the EB-5 program is designed as a path into the United States for qualified immigrant investors – some of whom do have an opportunity to use public services – it is imperative to understand how this decision can affect them.

In this article, you will learn what the U.S. government deems a public charge, which government benefits are included in the public charge final rule, how it can impact their form I-485 adjudication, and ultimately what it means for their EB-5 investment processing.

Determining Whether an Immigrant Will Be a Public Charge

The Immigration and Nationality Act (INA) says that when an immigrant seeks admission into the United States (or to adjust their status to lawful permanent residence), they may be deemed inadmissible if “at the time of application for admission or adjustment of status, [they are] likely at any time to become a public charge.” This translates to a denial of admission or of their petition for adjustment in status. So who, then, is considered a public charge according to the final rule?

Public Benefits Outlined by the INA

When an immigrant is evaluated as someone who is more likely than not to receive one or more of a specifically outlined set of public benefits at any time in the future for more than 12 months in a three-year period, they would be classified as inadmissible. Generally speaking, the public benefits included under this rule are as follows:

• Income maintenance from federal, state, local, or tribal programs issuing cash benefits
• Public housing
• Medicaid benefits
• Section 8 housing or rental benefits
• SNAP benefits (the Supplemental Nutrition Assistance Program)
• Supplemental security income
• Temporary assistance for needy families

There are two types of applicants most often included: those seeking admission or adjustment of status to lawful permanent residence and non-immigrants who would like to either extend their non-immigrant stay or change their nonimmigrant status in some way.

None of the above-outlined considerations alone will make any immigrant inadmissible other than not providing a sufficient affidavit of support. If you have questions regarding whether a particular set of government benefits are considered applicable to the new legislation, reach out to an experienced EB5 attorney for answers. In the meantime, read on for other considerations adjudicators make when determining whether an immigrant may or may not need to access these benefits in a significant way.

Factors in Determining the Likelihood of Becoming a Public Charge

The factors considered during the adjudication process run the gamut of an immigrant’s circumstances. Here are the most common:

• An applicant’s age and general health
• Their family status
• The assets, financial situation, and access to resources they have
• Their educational background and skillsets
• What their prospective immigration status is and the expected period of admission
• A sufficient affidavit of support

Foreign investors in the EB-5 program (and their qualified family members) who are nearing the end of their investment term sometimes fall under the category of those seeking to adjust their immigration status. Form I-485 and Form I-829 are the specific petitions most likely to be affected by the 2nd Circuit decision, as they are an EB-5 investor’s applications to a) adjust their status from non-immigrant to conditional immigrant status and then b) remove those conditions.

The following is a quick refresher on EB5 program basics, an explanation on when Form I-485 comes into play, and how delays in I-485 processing affect I-829 petitions.

EB-5 Investor Basics and When Form I-485 Comes into Play

The EB-5 Immigrant Investor Program is a pathway to an employment-based visa in the United States. It was created by Congress, was enacted in the 1990s, and is still administered today by USCIS. It was developed as an effort to stimulate the U.S. economy and designed to provide green cards and a path to citizenship to qualified foreign investors. Immigrant investors who are able to infuse lawfully obtained foreign capital into EB-5 program-approved projects around the country in a way that meets all program requirements, especially job creation, can obtain green cards for themselves and their immediate family members.

To gain U.S. permanent resident status through the EB5 program, foreign nationals must meet the following minimum requirements:

• Invest a minimum of $1.8M in a new commercial enterprise, or a reduced amount of $900K if the project is in a designated TEA (targeted employment area).
• This capital must prove it has effectively created a minimum of 10 new and sustainable full-time jobs for U.S. workers.
• All project funding must have been lawfully sourced (and proven as such), and the capital is required to remain “at risk” throughout the investment period.

Although this path to a U.S. green card is straightforward and quicker than most other available options, each part of the investment process has its own set of requirements and can be quite complex. Putting together an I-526 petition—the first petition an EB5 investor files—can be complicated and time-consuming, especially in regard to the source-of-funds requirement. In a later-stage example, when an investment period is extended beyond an investor’s funding terms, often it is most beneficial for them to redeploy their capital in order to maintain the required at-risk status.

Partnering with an experienced EB-5 attorney and using available resources, like the EB5AN TEA map or the EB-5 Project Risk Assessment Questionnaire, can greatly improve an investor’s experience and help them manage the expectations of qualifying family members along the way.

Regarding the recent court decision, there are seven basic steps in the EB-5 process, and the 2nd Circuit Court’s stay is most likely to affect foreign investors in the later stages of EB-5 processing. Specifically, investors who have met all of their investment requirements and have sought to update their status through USCIS form I-485 may have experienced a denial between July 2020 and now. Learn more below.

USCIS Form I-485: An Overview

Via Form I-485, EB-5 participants who are already in the United States can petition USCIS to update their immigration status to a conditional permanent resident. Only after an applicant’s I-526 petition is approved may they file an I-485 petition for this adjustment in status. Questions on the application pertain to biographical information USCIS will use to determine whether an applicant is eligible for permanent residency, and it is typically filed by the applicant’s EB-5 attorney.

Information Included in the I-485 Petition

Information requested can include but is not limited to:

• All biographic details as required by Form G-325A
• Biometric service documents like fingerprints, photograph, and signature
• Copies of passport pages and all documents showing U.S. status has been maintained
• Criminal history
• Evidence of the approval received for their I-526 petition (Form I-797C)
• Familial certificates including birth, marriage, and divorce certificates
• Medical exams and vaccination records

Fees to Accompany Form I-485

An investor must also include application and biometric requirements fees with their Form I-485 submission. Note that when an applicant is age 78 or older, the biometric fee is waived. Additionally, USCIS application fees were set to change in early October 2020. As of this writing, a judge has imposed a temporary delay on the fee change, but that could change at any time. The current application fee for I-485 petitions is $1,140 per submission, but under the new rules, that fee would be reduced by $10. Depending upon an EB-5 participant’s current address, the application will be mailed to the lockbox facility for USCIS in either Texas or Arizona.

Estimated Processing Times on I-485 Petitions

Adjusting your residency status in the United States is a big step, and not just philosophically. The wait can be long (and difficult), as well. Form I-485 processing times vary significantly based on factors such as proper filing and documentation and USCIS’s caseload in a given area. That said, here is a brief outline of the typical waiting period for each step after filing a Form I-485:

• 2 TO 3 WEEKS: Notice from USCIS confirming the receipt of an application
• 3 TO 5 WEEKS: USCIS notice assigning the biometrics appointment
• 5 TO 8 WEEKS: The biometrics screening appointment (not the interview)
• 12 TO 16 WEEKS: Petitioner receives their EAD card, if applicable
• 4 TO 10 MONTHS: Notice from USCIS to attend an adjustment-of-status interview
• 6 TO 12 MONTHS: The adjustment-of-status interview

During an EB5 investor’s adjustment-of-status interview, one of the considerations made is whether there is any likelihood that they will become a public charge. If there is a concern, the I-485 petition may be denied.

Otherwise, between 8 and 12 months, when USCIS determines an applicant eligible, they are granted permanent residence. In the case of EB-5 investors, two years after securing conditional permanent resident status (if they have met all pertinent program requirements), they must file an I-829 petition to have those conditions removed.

If you are an EB-5 investor who has been impacted by this recent legislation and has ultimately had an I-485 petition denied, here’s how an attorney can help.

Foreign investors interested in relocating to the United States and obtaining U.S. permanent resident status are fortunate that the EB-5 Immigrant Investor Program, one of the easiest and quickest pathways to U.S. immigration, remains in full swing even after 30 years. The program offers foreign investors U.S. green cards in exchange for an investment in a qualifying EB-5 project, as long as the EB-5 investor can prove their investment resulted in the creation of a minimum of 10 new full-time jobs for U.S. citizens or residents.

To qualify for the EB-5 program, an investor must commit a certain minimum amount of capital to their chosen EB-5 project. In general, the minimum required investment amount is $1.8 million, but if the project is in a targeted employment area (TEA), the required amount drops to $900,000. Most EB-5 investors prefer this lower amount, but United States Citizenship and Immigration Services (UCSIS) does not automatically designate areas as TEAs. Rather, USCIS provides a set of criteria and methodologies, and EB-5 investors must demonstrate TEA eligibility on their I-526 petition.

EB5AN, a leading EB-5 consulting firm and regional center operator, has launched an interactive EB-5 TEA map to assist prospective EB-5 investors with locating qualifying TEA EB-5 projects. TEAs are divided into two variants—high-unemployment TEAs and rural TEAs—and EB5AN’s TEA map constitutes an easy-to-use tool that helps investors locate both types of TEA projects.

High-Unemployment TEAs

High-unemployment TEAs are areas that have an unemployment rate at least 50% higher than the national U.S. average. Only urban areas may qualify as high-unemployment TEAs—otherwise, the area may qualify as a rural TEA.

USCIS allows EB-5 investors to choose between four different methodologies to calculate whether an area qualifies as a high-unemployment TEA. The first is the American Community Survey (ACS) method, which examines five-year ACS data by census tract. The second is the census-share method, which combines the five-year ACS census tract data with county-specific data from the Bureau of Labor Statistics (BLS). Finally, the third is the county-level method, which applies BLS data to calculate unemployment in a single county.

Fortunately for EB-5 investors, USCIS is flexible about TEA designation, so even if a particular census tract doesn’t qualify, investors can group together directly adjacent tracts to form a high-unemployment TEA. EB5AN’s TEA map automatically combines adjacent census tracts to create qualifying TEAs, drastically facilitating the investor’s job.

Rural TEAs

Rural TEAs are more straightforward than high-unemployment TEAs. To ascertain rural TEA eligibility, EB-5 investors should use U.S. Office of Management and Budget data to determine geographical boundaries and population data from the most recent 10-year census to determine population levels. To qualify as a rural TEA, a region must be located outside a metropolitan statistical area (MSA) and have a population of less than 20,000. If the population of the area grows beyond 20,000 after the investor submits their I-526 petition, USCIS will still consider the area a valid rural TEA.

Using the EB5AN TEA Map

One of the most significant features of EB5AN’s TEA map is the ability to generate an I-526-ready formal TEA qualification report. If an EB-5 investor is pursuing the lower investment amount of $900,000, they are required to demonstrate in their I-526 that their EB-5 project is in a qualifying TEA, and putting together the documentation and report to prove this is time consuming and complex. Thus, EB5AN’s ready-made formal TEA qualification report is a major time and effort saver for EB-5 investors.

Determining TEA eligibility is a tedious and complicated process, but EB5AN’s TEA map makes it easy for EB-5 investors to see whether their EB-5 project qualifies for TEA status. By highlighting qualifying TEA regions, the map allows EB-5 investors to locate qualifying TEAs all across the United States. By automatically combining adjacent census tracts to create custom TEAs, EB5AN’s map takes most of the guesswork out of TEA calculations.

The EB5AN map also displays whether a given TEA is covered by one of EB5AN’s 14 regional centers. Regional center investment is popular because it frees EB-5 investors from the requirement of participating in the day-to-day management of the new commercial enterprise (NCE) and relaxes the job-creation requirements, making it easier to obtain a U.S. green card. For project developers, this feature also indicates whether affiliation with an EB5AN regional center is possible.

The EB-5 program is a relatively quick and simple pathway to U.S. immigration for foreign nationals around the world, and EB5AN’s TEA map makes the process that much easier. Prospective EB-5 investors and project developers can use the innovative tool to help them plan their EB-5 investments and projects.

When applying for an EB-5 visa, the first step in the process is submitting Form I-526, Immigrant Petition by Alien Investor, to U.S. Citizenship and Immigration Services (USCIS). By submitting this petition, the investor proves to USCIS that they meet all the criteria of the EB-5 program—specifically that they have invested the required amount in a new commercial enterprise (NCE) and that their investment will create 10 full-time, permanent jobs for U.S. workers.

While this process sounds simple based on the explanation above, providing relevant supporting documents complicates matters. To support projections related to job creation, the applicant should include a comprehensive business plan and a credible economic report. In addition to providing evidence such as bank statements and loan certificates to show that their capital is irrevocably committed to the investment, the investor must also prove that the investment capital was obtained legally.

The most common source of investor capital in the EB-5 program is asset-based loans. Loans are perfectly acceptable sources of funds, but investors must provide evidence that all assets and loans were obtained legally. If an investor borrows from an individual rather than an institution like a bank, the investor must also prove that the lender’s funds were obtained legally.

We’ve developed a case study that shows a strategy for proving that funds were legally obtained in a case involving a loan secured against an ownership stake in a hotel, with the loan funds derived from the payments an individual received from a company. We also provide a downloadable EB-5 source of funds example that shows how to present supporting documents to USCIS.

EB-5 Source of Funds Case Study: Funding an EB-5 Investment with a Loan Secured against an Asset

An investor—let’s call her Jane Smith—owns a 40% share in a hotel. Jane’s father had owned the hotel, and when he died, he left a 60% share to Jane’s mother and 20% each to Jane and her sister. In March 2020, Jane’s mother gifted Jane 20% of her ownership stake, leaving Jane with a 40% stake. In March 2020, the hotel was valued at $2,500,000. This implies that Jane’s 40% share is worth $1,000,000.

In April 2020, using her stake in the hotel as collateral, Jane received a loan of $900,000 from John Doe. The loan is secured by a mortgage deed on Jane’s collateral in the hotel and on a personal guaranty granted by Jane in favor of John, the lender. Jane then uses this $900,000 loan to invest in an EB-5 project in a targeted employment area (TEA).

Supporting Documents Needed to Prove the Loan Derived from Legal Sources of Funds

• 1. Proving ownership of the collateral

In Jane’s case, her I-526 petition should be accompanied by documents proving that she owns a share of a hotel that she partly inherited from her father and partly received as a gift from her mother. She also needs to provide proof that her share provides enough collateral to act as security for the loan.

To clearly explain the source of her collateral to USCIS, Jane should include the following exhibits in her cover letter:

• Certificates of title for the hotel
• Selection of online booking pages for the hotel (as proof that it exists and is in operation)
• Death certificate for her father
• Her father’s will
• Deed of donation showing that Jane’s mother gifted her shares in the hotel
• Hotel valuation letter

• 2. Proving the loan agreement is legal

Jane needs to prove that the loan funds were legally acquired. In other words, she needs to prove to USCIS that she entered into a legal loan agreement, with the loan secured against her collateral in the hotel. To prove the legality of the loan, Jane can provide the following documents:

• Loan agreement
• Note
• Personal guaranty
• Deed of mortgage
• Monthly documentary stamp tax declaration return for the recording of the deed of mortgage

• 3. Proving the funds used for the loan were obtained legally

Finally, Jane needs to provide evidence of the source of John Doe’s funds. Let’s say John is a managing member in a consulting business called XYZ Consulting, which was established with zero start-up capital. The funds he used to provide the loan derived from dividends disbursed by the company.

Jane should confirm John’s identity by providing copies of his passport and most recent tax returns. Next, she should provide a brief overview of John’s involvement in the business and of the business itself. To show that the company started with no start-up funding, Jane can include the company’s bank statement for its first year of operation.

To prove the company exists and is in good standing, Jane can provide the following supporting documents:

• Certificate of Formation of XYZ Consulting
• FEIN letter from IRS for XYZ Consulting
• Operating agreement for XYZ Consulting

Jane can then provide a brief overview of the services provided by XYZ Consulting, relying on the operating agreement as documentary evidence. To show that the company’s income—and thus the dividends disbursed—derives from legal operations and that taxes have been paid on all earnings, Jane can include the following:

• A selection of client invoices for 2018 (the previous fiscal year)
• XYZ Consulting’s 2018 bank statements, with the payments relating to the invoices included highlighted for ease of reference
• XYZ Consulting’s audited financial statements for 2018
• XYZ Consulting’s tax return for 2018

The documents listed above will include information about the dividends the company paid to its members. However, Jane would still need to show the amounts of the dividends to prove that John had the funds available to provide the loan. Jane should include

• All tax-related documents for XYZ Consulting
• John’s personal tax documents showing income received from XYZ Consulting
• John’s personal bank statements covering the period in which the dividends were paid
• Letter from the company’s auditor explaining the dividends

Explaining the Source of Funds as Part of an EB-5 I-526 Petition

The I-526 petition is accompanied by a cover letter that explains the significance of the evidence presented to USCIS that the petitioner’s investment complies with the regulations set out in the EB-5 program. It also lists the exhibits included as evidence of the petitioner’s claims.

To develop a clearer picture of how to present source of funds information and exhibits to USCIS, download our example I-526 cover letter section. This sample source of funds section describes how an investor can demonstrate the source of their EB-5 investment funds for funds obtained through a loan secured against real estate, with the loan funds derived from company profits or dividends.

What makes proving the sources of EB-5 investment capital so challenging is that each investor has unique circumstances. Working with an EB-5 professional like EB5AN can greatly simplify the I-526 application process. Contact EB5AN today to learn how we can help you.

2020 has been an awful year for almost everybody, and EB-5 visa program participants are no exception. The pandemic-induced temporary suspension of routine visa services at U.S. embassies and consulates has prevented thousands of EB-5 investors and their families from receiving their U.S. green cards and starting their new lives in the United States.

But investors aren’t the only ones in the EB-5 world who’ve been suffering in 2020—EB-5 regional center owners are experiencing their own crisis. Since 2019, United States Citizenship and Immigration Services (USCIS) has been cracking down on regional centers, quick to hand out termination notices to those it deems not up to standard. In fact, between February 7, 2020, and September 17, 2020, USCIS terminated 184 EB-5 regional centers.

Trends in Regional Center Terminations and Approvals

The percentage of terminated EB-5 regional centers is significant. From 1,212 approved regional centers on February 7, 2020, the figure has dropped to 1,027 as of September 17, 2020, representing 15% of all approved regional centers. This loss is not offset by new regional center approvals, either—quite the contrary. The last new regional center approvals came in August 2019, meaning USCIS has not approved any new EB-5 regional centers in more than a year. Processing statistics up to FY2019 also indicate that new I-924 petition receipts have been low.

Why have so many regional centers been terminated in 2019 and 2020? Various factors can lead to regional center termination, but the overwhelming majority of regional centers have been terminated due to lack of investor activity. In other words, these regional centers offered EB-5 projects, but investors weren’t signing up to invest in them, and thus they were unable to fulfill their duty of stimulating the U.S. economy.

Why Choosing the Right Regional Center Is So Important

The dismal situation of EB-5 regional centers in 2019 and 2020 highlights the importance of conducting careful due diligence and selecting a reputable regional center you can rely on. If an EB-5 investor’s regional center is terminated, that doesn’t necessarily mean their I-526 petition will be denied, but it does significantly complicate their EB-5 process and necessitates significant amendments to their petition. The easiest, fastest, and least stressful EB-5 journey is with a highly reputable EB-5 regional center with a proven track record of successful projects.

The regional centers run by EB5AN are a good example. EB5AN is a leading EB-5 consultancy business and service provider that operates 14 regional centers across the United States, covering more than 20 states and Washington, D.C. EB5AN has also partnered with other high-quality regional centers around the country to cover the remaining 30 states, offering prospective EB-5 investors a comprehensive network of trustworthy EB-5 regional centers that span the entire United States.

The news of rampant regional center terminations and lack of approvals is concerning to many participants in the EB-5 industry, including investors, but the truth is that investors need not worry so long as they work with a reputable EB-5 regional center with a proven record of success. Regional centers such as the ones managed by EB5AN stay up to date on any changes in USCIS regional center regulations and strictly follow the guidelines to always maintain compliance, providing a seamless EB-5 experience to their investors.