As an EB-5 investor, you and your family could receive U.S. Green Cards in a matter of months. This level of fast processing is rare among U.S. immigration programs. In a short time, you could enjoy the benefits of living and working in the United States as a permanent resident.
However, your chances of a successful EB-5 application rely largely on the EB-5 project you invest in. Your EB-5 project should be fully compliant with the requirements of the EB-5 program. Otherwise, USCIS may deny your application, thus disqualifying you from a U.S. Green Card.
You will need to carefully evaluate an EB-5 project’s compliance before investing.
A project’s history of requests for evidence (RFEs) is one of the most important indicators of its compliance with USCIS policies—or lack thereof.
If an EB-5 project has pending RFEs, the project has failed to comply with USCIS requirements. Should you invest in this project, your EB-5 petitions would likely experience delays—or be denied outright.
USCIS has established clear rules governing EB-5 projects’ business structure, fund oversight, job creation, and similar factors. An RFE can be a major red flag that your immigration goals and funds will be at a high risk.
In this post, we examine the role of RFEs and why these can indicate a serious problem in an EB-5 project. We then review the questions you need to ask before investing in order to protect your immigration goals and promptly receive your U.S. Green Card.
Form I-956F: Proving Compliance with EB-5 Policies
Pending RFEs: A Major Risk Factor for EB-5 Investors
Lack of Transparency: The Most Dangerous Red Flag?
Before Investing, Ask These Questions
Further Reading
Form I-956F: Proving Compliance with EB-5 Policies
The EB-5 Reform and Integrity Act of 2022 (the RIA) was signed into law in March 2022. This legislation established the current compliance policies for EB-5 projects nationwide, with a stricter level of oversight and transparency.
Following the RIA, USCIS introduced Form I-956F, Application for Approval of an Investment in a Commercial Enterprise. The USCIS website explains that “a designated regional center uses this form to request approval of each particular investment offering through an associated new commercial enterprise.”
The goal of Form I-956F is to provide USCIS with the information it needs to develop a thorough understanding of the EB-5 project. Each EB-5 project is required to file Form I-956F to prove its compliance.
Only after filing the I-956F petition can an EB-5 project accept investments from EB-5 applicants.
This wide-ranging petition requires regional center operators to submit copies of all offering documents. These documents include, but are not limited to, the following:
- the confidential offering memorandum
- the limited partnership agreement
- loan or equity agreements
- a comprehensive business plan
- an economic impact analysis
These key documents are used to describe the EB-5 investment structure, the project developer entity, and the project’s estimated economic impacts.
As part of Form I-956F, EB-5 regional centers must also submit background information on certain individuals. This information must be submitted for each person “in a substantial position of authority” in the regional center’s investment fund and the project entity.
Form I-956F must also disclose any conflicts of interest between the entities involved with the EB-5 project and any pending litigation. Additionally, the regional center must provide USCIS with its policies for monitoring the sale of securities to EB-5 investors. Form I-956F must certify that all material risks have been disclosed to the project’s investors.
When you file Form I-526E, your initial petition for an EB-5 Green Card, your approval depends largely on your EB-5 project’s compliance. An I-956F approval indicates that USCIS has already reviewed your EB-5 project and found it fully compliant.
If you invest in an EB-5 project that has received I-956F approval—and has no pending RFES—your immigration goals and funds will be more secure.
You will be one step closer to a U.S. Green Card.
But what if USCIS determines that a project’s I-56F submission is unclear, lacking evidence, or otherwise deficient? Or what if an EB-5 project’s operations deviate from the documents provided in their I-956F submission?
Pending RFEs: A Major Risk Factor for EB-5 Investors
In this case, USCIS can issue an RFE. RFEs will ask for the EB-5 project to provide missing documentation, explain their project structure or business plan in more detail, or provide amended information.
USCIS can issue any number of RFEs before approving or denying a project’s I-956F submission. Upon issuing an RFE, USCIS halts adjudication of the I-956F, effectively pausing the timeline until the project submits the requested materials.
USCIS issues RFEs as Form I-797E, a variant of the I-797 Notice of Action.
While an RFE is not an outright denial of an I-956F submission, it does indicate that USCIS has substantial doubts about the filing.
An RFE may be issued if USCIS finds a project is uncompliant with any of the following requirements:
- Project Structure: The EB-5 project (job-creating entity) should be separate from the regional center’s investment fund (new commercial enterprise). Additionally, the business plan must clearly demonstrate that the EB-5 project is viable and how it will use the EB-5 funds to create at least 10 jobs per investor.
- Mandatory Conflict Disclosures: Any actual or potential conflict of interest between a regional center, project developer, or related parties must be explicitly disclosed in the project offering documents and in Form I-956 designation or project filings. Where certain conflicts are permissible, they must be clearly disclosed and affirmatively waived by each investor in writing.
- Background Checks (Form I-956H): Every person in a position of substantive authority over pooling, investment, release, or control of funds must submit Form I-956H, Bona Fides of Persons Involved, with a separate biometric fee alongside Form I-956 or Form I-956F filings.
Form I-956H and USCIS policy identify disqualifying offenses that bar an individual’s involvement with an EB-5 project, including the following:
- Any criminal or civil offense involving fraud or deceit within the previous 10 years.
- A civil offense involving fraud or deceit with liability over $1,000,000.
- A conviction with imprisonment for more than one year.
- Engagement in illicit activities (e.g., drug trafficking, espionage, money laundering, terrorism, human trafficking).
- Inclusion on the DOJ’s List of Currently Disciplined Practitioners or public discipline by a securities regulator for fraud/deceit USCIS.
- Additionally, a person with criminal convictions in the past 10 years cannot be associated with a Regional Center under the RIA.
- Annual Reporting (Form I-956G): Approved regional centers must file Form I-956G, Regional Center Annual Statement, by December 29 each year to report all EB-5 capital across all of their projects.
An EB-5 project might receive an RFE if, for example, it fails to disclose pending litigation or conflicts of interest with the regional center. An individual involved with the EB-5 project may have submitted incomplete or misleading background information on Form I-956H. Or there may be issues with the regional center’s oversight of the EB-5 funds.
The EB-5 project may not show the potential to create enough jobs for its investors, or there may be issues with the way the entities are structured.
In any of these scenarios, your prospects of receiving a U.S. Green Card would be at a great risk. If the EB-5 project fails to respond to the RFE promptly, the project may be disqualified by USCIS. The investors in this project would be forced to reinvest in a new project and potentially lose all of their invested funds.
Lack of Transparency: The Most Dangerous Red Flag?
USICIS might issue an RFE if an EB-5 project has any of the issues described above. As risky as these are, a lack of transparency is one of the most dangerous red flags to watch out for.
A transparent EB-5 project will be willing to disclose any issues and how it plans to mitigate risk for EB-5 investors. But an EB-5 project that fails to provide important information is very unlikely to repay its investors and help them receive their Green Cards.
If you ask an EB-5 project whether it has a pending RFE, it should answer promptly and identify the issue. If they are not willing to answer, this is a significant red flag.
If an EB-5 project is unwilling to disclose basic information, how seriously will it take its fiduciary responsibility toward investors? What level of fund oversight and project quality could you expect from this EB-5 offering?
Before Investing, Ask These Questions
Given the risks involved, we advise you to ask in writing whether an EB-5 project has any pending RFEs. A written response from the EB-5 project will carry more legal weight than a verbal answer.
Additionally, you should demand a full copy of the RFE and a full copy of their response. The EB-5 project should have responded promptly—within a few days—of receiving the RFE notice.
Any EB-5 project that honors its fiduciary responsibility will gladly answer your questions in writing and provide this information.
“RFEs can signal a serious problem with an EB-5 project,” explains Sam Silverman, managing partner of EB5AN. “We encourage all EB-5 investors to find out whether an EB-5 project has a pending RFE.”
“Even more importantly, EB-5 projects should be willing to disclose basic information, such as any RFEs,” concludes Silverman. “A project that hides this information from investors or avoids their questions shows a disturbing lack of transparency.”
