When Must EB-5 Funds Be Deployed to an EB-5 Project to Create the Required 10 Jobs?

Obtaining U.S. Green Cards by investing in an EB-5 project can be a multi-year process.

To get permanent Green Cards, EB-5 investors are required to submit several petitions to the United States Citizenship and Immigration Services (USCIS). Two important ones are Form I-526E and Form I-829.

Form I-526E is filed immediately after an EB-5 applicant makes their investment. Once Form I-526E is approved, the EB-5 investor and their family are eligible to receive temporary U.S. Green Cards that are valid for two years. Close to the end of this two-year period, the investor files Form I-829 to remove the conditions on their Green Cards.

Throughout this process, the movement of the EB-5 capital from the investor to the EB-5 project must comply with USCIS policies for the EB-5 program. Otherwise, USCIS may deny an EB-5 investor’s Form I-526E or Form I-829.

EB-5 applicants often ask the following about their invested funds: “At what point does USCIS require my funds to be deployed to the EB-5 project job creating entity (JCE) and be used to create EB-5-eligible jobs?”

A common misconception is that the EB-5 project must use the EB-5 funds to create jobs at the time an investor submits Form I-526E, or perhaps earlier. However, USCIS only requires the EB-5 funds to be deployed to the EB-5 project before Form I-829 is reviewed. This happens several years after an investor submits Form I-526E and after they have held their temporary Green Card for at least 21 months.

In this post, we summarize USCIS’s requirements for the flow of EB-5 funds from investor to EB-5 project.

This information will help EB-5 investors choose USCIS-compliant projects and qualify for permanent U.S. Green Cards.

The Flow of EB-5 Funds: Investor, Escrow Account, NCE, and JCE

The movement of EB-5 funds from investor to EB-5 project typically occurs in the following order:

1. The EB-5 investor transfers the funds to the EB-5 investment fund or new commercial enterprise (NCE) escrow account.
2. The funds are released from the escrow account to the NCE’s operating account.
3. The NCE advances funds from its operating account to the JCE.
4. Eventually, the JCE repays the NCE according to the project’s exit strategy.

Let’s examine this process in more detail.

EB-5 projects are typically sponsored by a regional center. Regional centers are USCIS-designated entities that oversee the flow of EB-5 funding into EB-5 projects.

In almost all EB-5 projects today, an EB-5 investor’s funds first go into an escrow account set up by the NCE.

Following USCIS’s issuance of the Form I-526E receipt notice, EB-5 investor funds leave the NCE escrow account and move to the NCE operating account.

When the EB-5 project’s JCE requires EB-5 funding for eligible project costs, investor funds move from the NCE’s escrow account to the JCE.

The JCE is then required to spend these funds on creating EB-5-eligible jobs—at least 10 jobs per EB-5 investor—and eventually repay the EB-5 funds to the NCE at the end of the loan term.

Complying With USCIS Requirements for the Flow of EB-5 Funds

EB-5 investors need to ask three key questions about the movement of their funds:

1. Where must the EB-5 funds be when I submit Form I-526E?
2. Where must the EB-5 funds be when I submit Form I-829?
3. When must the EB-5 funds be spent by the JCE on creating new jobs?

Let’s now answer each of these questions by examining USCIS policies for the movement of EB-5 funds.

EB-5 Funds at the Form I-526E Stage

The USCIS Instructions for Immigrant Petition by Regional Center Investor (Form I-526E) outlines the following requirement under the section “Who May File Form I-526E?”:

“You may file this petition for yourself if you have invested or are actively in the process of investing the required investment amount in a new commercial enterprise (NCE) in a USCIS-designated regional center.”

Notice that when an EB-5 investor files Form I-526E, the JCE does not need to have received the EB-5 funds. Instead, an EB-5 investor must have invested or be “actively in the process of investing” in the NCE.

The EB-5 funds will usually still be in escrow at the time Form I-526E is filed—instead of going to the JCE.

In fact, many EB-5 projects previously held the EB-5 funds in escrow until the EB-5 investor’s Form I-526E was approved. Only after I-526E approval would the funds be released from escrow and deployed to the JCE.

This approach was very common in the early to mid-2010s, when the USCIS processing times for EB-5 petitions were relatively short.

Additionally, the instructions for Form I-526E allow EB-5 investors to be “actively in the process of investing.” In compliance with this rule, many EB-5 projects allow investors to make partial investments and then file Form I-526E.

Partial investments allow EB-5 investors to contribute only a portion of the required investment amount of $800,000 and then file Form I-526E. The EB-5 investor commits to providing the remaining amount within a specific timeframe, often by securing the remaining amount with collateral.

The above shows that the EB-5 funds do not need to be transferred to the JCE and used for job creation at the time an investor files Form I-526E or prior to the approval of Form I-526E.

The “At-Risk” Requirement

Chapter 2 of the USCIS Policy Manual describes what is known as the “at-risk” requirement as follows:

“To qualify as an investment, the immigrant investor must actually place his or her capital at risk. The mere intent to invest is not sufficient.”

In other words, EB-5 investors must prove to USCIS that their funds are irrevocably committed to making an EB-5 investment.

EB-5 investors can fulfill the at-risk requirement by transferring the full amount to the NCE’s escrow account. Or, as noted above, they can make a partial investment into the NCE’s escrow account.

Notice that the “at-risk” requirement does not mean that the EB-5 funds need to be spent by the JCE on job creation—or even be in the possession of the JCE.

EB-5 Funds at the Form I-829 Stage

This raises another question: “At what point must the EB-5 funds go to the JCE?”

As mentioned above, Form I-829 is typically filed several years after Form I-526E, during the last 90 days of the EB-5 investor’s two-year conditional Green Card period.

The USCIS Instructions for Petition by Investor to Remove Conditions on Permanent Resident Status requires I-829 applicants to submit “evidence that the investor’s investment created or can be expected to create, within a reasonable time, 10 full-time jobs for qualifying employees.”

Therefore, by the time USCIS reviews an investor’s I-829 petition, the JCE should already have obtained the EB-5 funds and created at least 10 jobs.

In some cases, EB-5 investors can also be granted an extended window for job creation. At the time Form I-829 is reviewed, the EB-5 funding can be “expected to create, within a reasonable time,” the 10 required jobs.

The extended window for job creation is usually one additional year. This new policy was introduced by the EB-5 Reform and Integrity Act of 2022 (RIA).

What This Means for EB-5 Investors

Let’s summarize the USCIS requirements we’ve examined so far.

When they file Form I-526E, EB-5 investors do not have to worry about their funds being deployed to the JCE and used to create jobs. In fact, the “at-risk” requirement even allows investors to make partial investments in the NCE and then file the I-526E petition.

The JCE does not have to obtain the EB-5 funds or create the jobs until Form I-829 is reviewed—several years after an EB-5 investor submits Form I-526E. In some cases, investors can have an additional year to prove the jobs were created.

What do these USCIS policies mean for EB-5 investors?

The JCE in an EB-5 project may take several months, a year, or longer to draw the EB-5 funds from the NCE.

When the EB-5 investors receive the approval of their Form I-526E petitions, their funds may still be in the NCE operating account and not yet deployed to the JCE.

Still, the EB-5 investors in this project will enjoy a two-year conditional residency period in the United States, and may eventually get approved for permanent U.S. Green Cards so long as their funds are deployed to the JCE by the end of their two-year conditional residency period.

Learn More About EB-5 Immigration

A good understanding of USCIS policies for the EB-5 program will increase your chances of fast approvals for both Form I-526E and Form I-829.

We invite you to schedule a free consultation with the EB5AN team to learn more about EB-5 immigration requirements.